China Prepares for Party Congress and Leadership Transition Diego Azubel/European Pressphoto Agency Soldiers marched past the Great Hall of the People in Beijing on Wednesday, on the eve of the 18th Communist Party Congress. BEIJING - China's Communist Party leader, Hu Jintao, defended his decade in power on Thursday and warned that the country faced stark challenges at home and abroad. He spoke at the start of a congress that will culminate in his retirement and the appointment of a new generation of leaders after a transition marked by scandal and anxiety about the party's future. Mr. Hu told the ranks of party-picked delegates assembled in the Great Hall of the People that China faced a period of major change and "complicated domestic and international circumstances." Seated near him was his presumed successor, Xi Jinping, who is all but certain to take over as party chief after the congress ends next week and to take the reins as president in March. Mr. Xi has privately signaled that he is aware of increasingly urgent calls from economists, intellectuals and some party insiders for a new round of market liberalization and even measured political relaxation to cure what they see as a deepening economic and social malaise. Mr. Hu acknowledged the problems facing the party, including corruption, but avoided specific mention of the scandals that have blighted his final year in power. "Currently, the conditions of the world, the country and the party are continuing to undergo profound changes," he said, reading from excerpts from his report to the party congress, which convenes every five years. "We are confronting unprecedented development opportunities and challenges," he said, adding, "The gap between rich and poor is growing." While acknowledging that China's wealth remains unbalanced among regions and unequally distributed, Mr. Hu told the congress that his decade as top leader had brought robust economic growth and the makings of a "moderately prosperous society." "Over the past five years, there have been major achievements in every aspect of work," he said. Reform and opening up have gained major advances, and the people's standard of living has clearly risen. Mr. Hu's congress report is a major part of the public ceremony that accompanies China's leadership transitions. But the real decisions about who will succeed him and his cohorts have been made in secretive negotiations involving senior officials and party elders. In a show of unity, Mr. Hu earlier entered the assembly hall accompanied by the dominant party elder, former President Jiang Zemin, who shuffled gingerly to his seat. But party insiders have said Mr. Jiang, 86, played a major role in shaping the next leadership circle and voiced frustration with the record of Mr. Hu and Prime Minister Wen Jiabao. Contrary to some observers" predictions, Mr. Hu did not play down the founder of the People's Republic of China, Mao Zedong, whose revolutionary heritage sits increasingly awkwardly with urban middle-class wealth and values. Mr. Hu also repeatedly mentioned the phrases "scientific development" and a "harmonious society," which he has used to sum up his goals of a stable society under firm party control. Officially, the new leadership team is to be selected in the coming week by the 2,268 delegates to this congress, the 18th in the party's 91-year history. In fact, much of what will go on during the congress has already been decided. The delegates are voted on by lower-ranking members but based on guidance provided by higher-ups, a process known as "democratic centralism." Mr. Hu repeated vows of "political system reform" in his report to the congress. But officials have made clear that the party's notions of political change do not embrace any idea of full-fledged electoral democracy. On the contrary, at a news conference on Wednesday, the congress's spokesman and deputy head of Communist Party propaganda, Cai Mingzhao, defended China's current system. "The leading position of the Communist Party in China is a decision made by history and by the people," Mr. Cai said. Still uncertain is who will be standing next to Mr. Xi when the top leadership is presented in a week. This group, known as the Politburo's Standing Committee, essentially runs China. According to plan, it will include Mr. Xi and Li Keqiang, who is expected to take over as head of the government bureaucracy next year. Both men are current members of the Standing Committee. It is also unclear how many members the committee will have. It now has nine posts and is expected to be cut to seven. Nor has Mr. Hu indicated when he will give up his post as chairman of the Central Military Commission, which gives him continued influence over Mr. Xi's policies and personnel choices. In his report, Mr. Hu lauded China's growing military strength, promising to continue modernizing the People's Liberation Army forces, and calling them a defender of peace, a point sure to be questioned by regional neighbors, including Japan, that are embroiled in territorial disputes with Beijing. Mr. Cai, the spokesman, also said the party had learned from the scandals surrounding two high-ranking officials: Bo Xilai, the former Politburo member, and Liu Zhijun, the former railway minister. Both have been accused of corruption, and Mr. Bo is also accused of covering up the murder of a British businessman. Mr. Hu did not refer explicitly to Mr. Bo in his report, but said corrupt officials should be punished "no matter how high or low in rank." An earlier version of this article gave an incorrect number for the delegates to China's 18th Communist Party Congress. There are 2,268 delegates, not 2,280.