BEIJING (Reuters) - China's president-in-waiting Xi Jinping won a strong mandate on Thursday to lead the world's second-biggest economy and deal with problems ranging from corruption to economic uncertainty.
Xi was appointed head of both the ruling Communist Party and its top military body as the ruling Communist Party unveiled a new leadership line-up consisting of conservatives and respected financial reformers.
In an address at the end of the party's once-in-five years congress, Xi said he understood the people's desire for a better life but warned of severe challenges going forward.
"Our party is dedicated to serving the people," he said after introducing the other six members of the standing committee at the Great Hall of the People in a carefully choreographed ceremony carried live on state television.
"It has led the people in making world-renowned achievements, and we have every reason to take pride in these achievements," he added, speaking in perfect Mandarin.
"But we are not complacent, and we will never rest on our laurels. Under the new conditions, our party faces many severe challenges, and there are also many pressing problems within the party that need to be resolved, particularly corruption, being divorced from the people, going through formalities and bureaucratism caused by some party officials."
The run-up to the handover has been overshadowed by the party's biggest scandal in decades, with former high-flyer Bo Xilai sacked as party boss of the southwestern Chongqing city after his wife was accused of murdering a British businessman.
Xi will be steering China for at least the next five years with a mixed team, including the urbane, English-speaking anointed next premier Li Keqiang, and North Korea-trained economist Zhang Dejiang.
That could make undertaking the kind of reforms China so desperately needs, whether financial or social, much harder. Two senior leaders with strong reform credentials -- Guangdong party boss Wang Yang and party organization head Li Yuanchao -- did not make it to the standing committee, the party's premier body.
And Wang Qishan, 64, currently the vice-premier in charge of economic affairs, will take over the graft-fighting role, rather than having anything to do with financial affairs.
"The leadership is divided," said Jean-Pierre Cabestan, a Chinese politics expert at Hong Kong Baptist University.
"It's easier for them to move to a new growth model. I think they agree upon that and that won't be the hardest task. But I see a lot of political paralysis in terms of changing the political system."
CUT TO SEVEN
Still, the standing committee - the innermost circle of power in China's authoritarian government - has as expected been cut to seven members from nine, which should ease consensus building and decision making.
Zhang is expected to head the largely rubber-stamp parliament, while Shanghai party boss Yu Zhengsheng is likely to head parliament's advisory body, according to the order in which their names were announced.
Tianjin party chief Zhang Gaoli and Liu Yunshan, a conservative who has kept domestic media on a tight leash, make up the rest of the group.
Xi will take over Hu's state position in March at the annual meeting of parliament, when Li will succeed Premier Wen Jiabao.
Despite the problems ahead, Xi will at least not have to worry about Hu looking too much over his shoulder.
Hu has not followed his predecessor Jiang Zemin in staying on as head of the military commission after stepping down as party chief. Xi has instead directly taken over that post, strengthening his position.
Advocates of reform are pressing Xi to cut back the privileges of state-owned firms, make it easier for rural migrants to settle in cities, fix a fiscal system that encourages local governments to live off land expropriations and, above all, tether the powers of a state that they say risks suffocating growth and fanning discontent.
With growing public anger and unrest over everything from corruption to environmental degradation, there may also be cautious efforts to answer calls for more political reform, though nobody seriously expects a move towards full democracy.
The party could introduce experimental measures to broaden inner-party democracy - in other words, encouraging greater debate within the party - but stability remains a top concern and one-party rule will be safeguarded.
"We're not going to see any political reform because too many people in the system see it as a slippery slope to extinction," said David Shambaugh, director of the China Policy Program at George Washington University's Elliott School of International Affairs.
"They see it entirely through the prism of the Soviet Union, the Arab Spring and the Colour Revolutions in Central Asia, so they're not going to go there."
(Additional reporting by Benjamin Kang Lim; Writing by Ben Blanchard; Editing by Nick Macfie and Raju Gopalakrishnan)
China's new party chief Xi gets strong mandate for action
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China's new party chief Xi gets strong mandate for action
