LOS ANGELES, CA (Catholic Online) - Utmost in the Chinese mind for the year 2012 is the change of leadership due for the Communist party, which controls the organs of government and the People's Liberation Army. The last leadership change, from 2002-2003 was the first time the communist country managed to stage a peaceful handover of power.

Complicating matters is the fact that 2012 is a politically sensitive year, which will see transfer of power over the whole of Greater China . on the mainland, Taiwan and Hong Kong. The United States will have a presidential election this year too, which could potentially alter one of China's most important relationships.

There is also widespread political superstition stemming from the Chinese people's belief that the Year of the Dragon, while auspicious, could also be calamitous. The year 1976 for instance, witnessed China's most disastrous earthquake in modern history killing over 250,000 in the city of Tangshan. That year also brought the death of China's paramount leader Mao Zedong, unlocking the potential for China's rapid economic change that followed.

There are also unrealistic expectations on the part of the global community. For much of 2011, world politicians and market watchers dreamed of China coming to the rescue of a stumbling global economy. Beijing mandarins sat on the fence fretting about high inflation and social instability inside their country.

As China prepares to greet the Year of the Dragon later this month, many fear gloom and doom. Some are expecting that the battle to stave off recession will be fought closer to home.

"It is entirely possible that 2012-2013 will see the third chapter of the world economic crisis after the U.S. sub-prime mortgage crisis in 2008 and the EU sovereign debt crisis in 2010-2011," Mei Xinyu, a well- respected adviser to the Chinese government on trade issues, said at a recent briefing in Beijing.

"The emerging economies could well become the center of it. They are vulnerable because of their inherent instability but also because in the wake of the recent crisis the economic powers of the day are attempting to contain their growth."

China itself is entering a period of slowing growth, with weakening exports (due to depressed demand in the euro area), plunging property prices, heavy debt in local government and widespread public fears over inflation.
 
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