Premier Zhu Rongji is due to retire shortly

In the coming months, China must decide on its next generation of leaders, and the horse-trading is already under way.

Next year, President Jiang Zemin must step down as Communist Party chief.

Soon after that, all of China's other senior leaders are also due to retire, including the Premier, Zhu Rongji and the Chairman of China's Parliament, Li Peng.

In recent weeks, rumours have begun to circulate in Beijing that some, in particular the hard-line parliament chief Li Peng, are reluctant to leave.

If such rumours are true, it will make the succession even more fraught.

Jiang criticised

On top of this, President Jiang has had to fend off a barrage of criticism from Communist Party hard-liners, furious over his decision last month to allow private entrepreneurs to join the party.

The party itself remains besieged by an epidemic of corruption.

A three-year campaign to try and stamp it out has only served to show how bad the situation really is.

Li Peng: Reluctant to leave?

But it is not all doom and gloom.

As they soak up the sea air, China's communist leaders can reflect on their success last month in winning the right to host the 2008 Olympic games.

And they can also take credit for China's entry into the World Trade Organisation (WTO), which looks like it will finally happen, after 14 years of trying.

But WTO membership also brings risks.

If, as some are predicting, it hits China's economy hard, bringing even greater unemployment, then the moderates in China's leadership who have pushed for WTO membership will be left even further exposed.