The Chinese and the Koreans celebrate their new ye­ar not according to the western calendar. They follow the lunar-so­l­ar year. This year their new ye­ar is very early, on January 23. Then the year of the dragon will start. This is the on­ly year when the animal si­gn is not a re­al member of the animal ki­ngdom. The year of the dragon will be of great importance for east Asia.

Japan, which started the New Year on January 1, will hope that the devastation ca­u­sed by the massive earthquake and tsunami on March 11 will be further reduced and that 2012 will not bring another se­ismic event of a similar ma­gnitude. On the Korean pe­ni­n­sula, people will hope that the year of the dragon will not lead to new tensions or even wo­rse. At present nobody kn­ows how the young and inexperienced leader Kim Jong-un will settle into his new tasks.

However, in the New Year, the world will mainly focus on the Middle Kingdom. The People’s Republic will witness a change in leadership in early autumn 2012. The present fourth generation leaders will see their terms come to an end. The 18th national congress of the Communist Party of China will pave the way for the fifth generation of leaders to take over the reigns of po­wer. While China has made monumental progress in economic and social modernisation, its political system is still stuck in totalitarian one-party rule. Reforms are long overdue but you cannot expect an establishment that has absolute power to give up their privileges in an act of self-denial and altruism.

Up till now in its over sixty years of existence, the People’s Republic has had only one peaceful transfer of po­wer, which happened in 2002-3, when the present leadership took over. At present it looks certain that Xi Jinping will follow Hu Jintao as the secretary general of the CPC and president of the country, the two most powerful positions. It is equally certain that Li Keqiang will succeed prime minister Wen Jiabao. While this provides some clarity, it is still uncertain how the struggle for influence in the party and in government will play out among the different fo­r­ces. A lot depends on the coming months and how the Chinese economy will develop. Experts see a major struggle between forces in the party who want to continue the co­urse of modernisation and opening up of the country, and others who plead for more cautious policies promoting more forcefully the national interests of China.

The Chinese New Year festivities, which stretch over several days, are the most important occasion in the whole year. It is the time when everybody wants to be with his or her family. Dozens of millions of migrant workers will be ma­king the often very long and arduous trek home. The wh­ole operation is one of the mo­st ambitious logistic undertakings in the world. When families unite, it is a time to exch­ange gifts. This is the occasion when ordinary Chinese measure the progress of the economy. It is not abstract growth figures, but the actual purchasing power of the hard-earned Yuan Renminbi that counts and that will decide whether people feel happy with the state of affairs or whether they are disgruntled. China has no democratic pr­ocess through which people can express their dissatisfaction with the government. Th­at is why every year tens of th­ousands of protests and localised revolts take place. In recent months, people had reason to feel upset about hi­gh prices particularly for essential foodstuffs. Festive seasons tend to bring up prices even more.

Inflation is a major worry of the government. It is expected that in the run-up to the national party conference in October 2012, there will be intensive debates about how best to tackle this problem, which is all the more pressing as China has been witnessing a rapid growth in income inequality. Of course, even in the People’s Republic a rigid Communist ideology no lo­n­ger dominates intellectual discourse and there are strong elements both within the party and society as a whole, which are dissatisfied with the distribution of income and property. Everyone knows that am­ong the new multi-millionaires there are many pr­in­celings, that is, sons and dau­ghters of high party officials.

While the going is good and living standards are increasing all around, people may be lenient towards the new ‘capitalist roaders’. However if the small man suffers from insecurity on the job market and from rapidly rising prices, anger about the rich might grow, particularly when people see that a lot of the new wealth is the result of corruption, connections or of outright economic malpractices. Those forces in the party who have never really liked the process of modernisation, liberalisation and opening-up are going to make use of this general dissatisfaction to str­engthen their influence and their bargaining power at the forthcoming party conferen­c­e. In this sense, the year of the dragon will be of crucial significance for the future co­u­r­s­e of the Chinese economy and Chinese society.

(The writer is the Far East correspondent of Swiss daily Neue Zurcher Zeitung)