The coming 18th National Congress of the Communist Party of China (CPC) and the expected election of a new general secretary of the CPC Central Committee by the end of this year offer an opportunity to look at the changes and developments that have occurred in Chinese society and its international face over the last decade since the 16th CPC National Congress in 2002, when Hu Jintao took up his current position of general secretary. Where have the major achievements been? What are the major challenges that China now faces? How does it stand differently now to the way it was as a country 10 years ago?

In November 2001, China successfully completed the long negotiation process for entry to the World Trade Organization (WTO). For over 14 years, first as the General Agreement on Tariffs and Trade, and then as the WTO, China had been negotiating deals with all the other members of the organization about the terms of its entry. Its final accession, less than a year before President Hu became general secretary of the CPC Central Committee, was a major moment in the globalization and integration of China into the world economy.

Initial assessment by economists within and outside China immediately after the deal was completed in 2001 was that fulfilling the WTO commitments for China would be challenging, and there were plenty of potential pitfalls. Some asked whether the Chinese agricultural sector would be able to deal with increased competition from abroad. Others asked whether Chinese state-owned and private companies would be able to compete in their own market with multinationals, which theoretically had greater powers under the WTO and greater incentives to enter China. In fact, China fulfilled the commitments it made under the WTO on time.

More remarkably, we can see that from 2001 China entered an era of great productivity. Raw GDP growth data show strong growth, even during the year when the global economic crisis struck hardest, in 2009, and China's exports fell because of the drying up of global markets. Almost every year since 2002, China has posted an impressive new statistic—replacing Japan as the world's largest holder of foreign exchange reserves in 2005, becoming the world's largest exporter in 2009, and the world's second largest economy in 2010. The greatest success of the government in the last 10 years therefore has been to maintain high growth levels, even though the international economic environment has deteriorated.

Economic takeoff

This growth has been central to the CPC and the government's task. Hu stated at the CPC National Congress in 2007 that the key benchmark would be the delivery of economic growth and lifting people out of poverty. In many ways, however, the extent and speed of this growth have now become a challenge. The Chinese economy is much larger than most outsiders expected in such a short period of time. Sometimes success can be as much a challenge as failing to succeed. The issues that face the current and future leaders are spelled out in the 12th Five-Year Plan that runs from 2011 to 2015. Broadly, they concern the issue of how, now that China is well on the way to becoming a middle-income country, it can deal with some of the imbalances that have grown over the last decade.

The first of these concerns sustainability. High growth rates have also involved an increased need for energy, and for new sources of energy. China still remains behind the United States in terms of its oil needs, but for all other sources of energy, from solar to nuclear to wind, it is number one. Its reliance, like most other Asian countries, on fossil fuels is a huge challenge. How does China move to energy forms that are less polluting and more efficient, especially now that there is more caution over the likely future role of nuclear power since the Fukushima tragedy last year in Japan?

There is also the issue of balanced growth. In the census of 2010, it became clear that China was, for the first time ever in its history, becoming a country where as many live in cities or towns as in rural areas. The urbanization of China has also created challenges over housing, over the best way to construct cities, and over the unequal levels of development between cities and the countryside. In 2006, the long-standing agricultural tax was lifted on farmers. There have been a number of policies to make their lives easier, and to bridge this gap. But the urban-rural divide is still a large one. In the areas of social welfare, too, there are big differences in the provisions of healthcare, education and other public goods in urban areas compared to most of the countryside. These inequalities have become a major target for central and provincial government policy. They will continue to be so for many years to come.