September 19, 2004 – (Beijing) Jiang Zemin has given up the top job in China's military, handing over the post to Communist Party chief Hu Jintao and completing a historic leadership transition to a younger generation.

The party's Central Committee accepted the resignation of the 78-year-old Jiang on the last day of a four-day closed-door plenum and approved Hu's rise to chairman of the Central Military Commission, the official Xinhua news agency said.

Hu, 61, who replaced Jiang as party chief in 2002 and as president in 2003, now holds the three most powerful positions in China after taking over the military portfolio, completing the first orderly succession in Chinese Communist history.

"The Hu Jintao era has started," said a Chinese political analyst who asked not to be identified.

Xinhua did not give a reason for Jiang's retirement, but a source close to his family said he was in poor health.

Jiang has had a heart problem since as early as 1989, said sources with ties to party leadership circles.

Xinhua said Xu Caihou, 61, a member of the military commission, was promoted as a vice-chairman.

However, in a sign of Jiang's waning influence, his closest political ally, Vice President Zeng Qinghong, did not join the military commission as had been speculated.

Jiang's departure was unlikely to result in any dramatic changes to domestic and foreign policy.

However, it would defuse budding tensions between Jiang and Hu and thus head off the prospect of a serious power struggle that could hamper surging growth that has transformed China into the world's seventh-largest economy, analysts said.

TEST AHEAD

Hu will now have the tricky task of keeping at bay the 2.5-million-strong People's Liberation Army, which is clamouring for a bigger budget and say over whether to attack Taiwan if the democratic island over which Beijing claims sovereignty pushes for independence.

Analysts said Jiang's power and influence would deteriorate rapidly and he lacks the political clout of his predecessor, Deng Xiaoping, to influence policy from behind the scenes.

"Jiang Zemin will become history soon," a party source who requested anonymity told Reuters.

Jiang had not been due to retire his final post until 2007 but came under pressure to follow in the footsteps of Deng, who retired from the top military job two years after quitting the party's all-powerful Politburo Standing Committee.

In a formality, Jiang is expected to pass on the chairmanship of the mirror state Central Military Commission to Hu next March.

Jiang is known to enjoy the limelight, and analysts said that unless his legacy and interests had been assured, he would have found it difficult to leave the stage.

Behind-the-scenes rivalry between Hu and his influential predecessor had emerged subtly into the open in recent weeks.

But analysts said the rivalry had not blown up into a full power struggle because both see stability as indispensable to the sustainable economic growth needed to maintain stability among China's 1.3 billion people, thus making a smooth succession at the plenum more likely.

The plenum is aimed at tightening the party's grip on power and perpetuating its rule through good governance -- transparency, accountability and fighting corruption.

The 83-year-old party has monopolised politics in China since the 1949 revolution, but in recent years has experimented with modest political change to look for checks and balances to curb corruption and official waste.

© Reuters 2004.