This year a transition in leadership in China’s Communist Party will take place.

These are the new faces:

This transfer of power will have little impact on the Chinese economy this year:

First, because this will be a very gradual transition. Gradual both in terms of time – the process will not be completed until the March 2013 National Peoples’ Congress – and in terms of personnel. Xi Jinping, who will take over from Hu Jintao as head of the Party, has been Hu’s deputy and a member of the Politburo Standing Committee (which sets policy direction) for five years. Li Keqiang, who will take over from Wen Jiabao as Premier and senior economic policy-maker, has been Wen’s deputy and has had a vote on the Standing Committee for five years. Both Xi and Li have been part of the Party’s elite and are heavily invested in all of its recent policy decisions.
Second, because all important decisions must be made by consensus, limiting the impact of any one of the nine members of the Standing Committee. There is very little chance of Xi or Li making an abrupt change in direction.
Third, because Xi and Li were selected for the top jobs by a consensus of their peers, with whom they worked for many years. While we know little about either man’s personal convictions, it is safe to say neither has admitted to his Standing
Committee colleagues a deep-seated desire for radical reform.

We are also not concerned about the ability of a Party-in-transition to make and implement important decisions if faced with an economic crisis. In the current system, where the future leaders are already part of the current leadership team, there are no lame ducks.