US and China leadership transitions equally important for Australia

Superficially this leadership transition evokes far less interest than the mania of a US presidential election, but there are further leadership transitions within the all-powerful Chinese Standing Committee that could have global implications.

One of the more intriguing rumours doing the rounds in China is that the Committee will be reduced from its current nine members to seven.

This would affect the consensus model of government long adopted by the CPC which guards against individuals accumulating too much power.

As anyone who has served on a committee can attest, the smaller the decision-making the body the more likely it is to be decisive.

There is a major reform agenda for the incoming Chinese leadership and strong and decisive action may well be required to deal with the range of internal and external issues.

One of the great challenges for leaders of China is to maintain internal social stability.

This is a massive challenge given the restive population approaching 1.4 billion with wide disparities between the incomes of people in coastal regions and those in the interior.

The challenge of dealing with inequality in a society founded on the principle of communism should not be underestimated.

China is also embroiled in increasingly acrimonious territorial disputes in the South China Sea and the East China Sea.

There is significant concern that the dispute with Japan over the Senkaku/Diaoyu islands will result in military conflict.

Rising nationalism in China and Japan has fuelled this dispute which has the potential to escalate into a broader regional crisis.

The attitude of the incoming Chinese leadership is crucial to whether it is resolved peacefully through negotiation or whether it escalates.