The leadership around Deng Xiaoping in the early 1980s attempted to pin down the responsibilities of the government and those of the ruling party, and these were loosely addressed in the new constitution issued in 1982. But over 30 years later, the ways in which the Communist Party of China is able to assert control over the government machinery are manifold. Put in the starkest terms, Xi Jinping is the most powerful man in China now, at least on paper — he heads the party and sits as number one on the Standing Committee. Li Keqiang, the premier and head of government, comes in at number two. This hierarchy tells us where the final power still really lies.

Defining the space where the party legitimately operates and where the government works is not an issue that will go away any time soon. There is a stark contrast in the ways the two bodies operate. The government, through its ministries and central and local bureaucracies, tries to perform its functions transparently, with fiscal accountability and to defined outcomes. But the party exists in a more nebulous space, and its lack of openness, the secrecy around how it governs itself and the ways in which it functions are increasingly problematic for effective governance of the Chinese state.

In the leadership transition over the last two years, this conflict between party and government can be seen more vividly in the figures of former leaders Hu Jintao and Wen Jiabao. Wen’s language from 2010 supporting more legal structures and greater democracy were taken as signs of latent support for a reform agenda at the highest level. But a more political reading of this would be to take heed of the immense wealth that Wen’s family has accrued (the New York Times expertly exposed this late in 2012, though it was widely known in China long before). Wen’s wife, children and even his mother have amassed a multi-billion dollar fortune. In the light of Wen’s financial position, there was some truth in the manifesto produced by over 1600 academics and intellectuals in China in 2011 attacking him for being venal, a closet Western lackey and a political hypocrite. Their most stinging phrase was simply to note that, in a decade as premier, not once had Wen mentioned Mao Zedong in a public speech.

For Wen, the political territory he covered was the State Council, the government organisation that contains all the central ministries and key administrative entities. Ensuring that the right patron was in charge of the council once he retired was crucial. In that sense, Li Keqiang, who had strong links with Wen, seemed a highly desirable successor. In the past few years there was growing support for Li from both Hu Jintao, his original patron, and Wen, a new admirer. Ironically, a man whose family is probably the wealthiest clan in modern China advocated attractive reforms. But Wen probably acted more from a sense of self-protection — supporting the government machinery in which he had his key patronage links — than from a real conviction that there needed to be a separation of party and state powers.

The issue of the separation of powers, however, no matter how it has been abused and avoided, is a persistent problem. Xi Jinping may make nice-sounding attacks on corruption and vested interest, but there is a wide acceptance that the only possible cure is to establish a balance of powers, greater scrutiny, and the placing of law and the implementation of rule of law above all institutions and power groups. And that, for all its complexity, boils down to constitutionalism. If there is one part of the system, as it has evolved in contemporary China, that needs to be fixed, this is it. Legal scholars in Beijing joke that the current Chinese constitution, largely unchanged since 1982, is a sleeping beauty — a wonderful, aspirational document that offers the weakest possible legal safeguards when it is actually invoked.

It is in the constitution, finally, that the frontier between government and party will need to be spelt out. And Li Keqiang, a lawyer by academic training, will be the person who must try to engage in this immense negotiation of a new social contract for China. It is significant that Li occupies a dual role as member of the leading group of the Party, the Standing Committee, and head of the State Council, the highest government body. Thus, the elevation of premier from the third-ranking position in the last Standing Committee to the second this time round may well prove to be truly meaningful. The National People’s Congress, and its gesture towards public participation in decision-making, was once seen as a potential route to reform, so maybe in the next few years we will see much greater effort going into strengthening government. At the end of this process the parameters of party activity and power should finally be set out. Li’s elevation means that distant day may well have just got closer.

Rising to this challenge in the reform of governance, perhaps more than most things, will determine for how long the world can continue to rely on China as an anchor of the Asian century.

Kerry Brown is Executive Director of the China Studies Centre and Professor of Chinese Politics at the University of Sydney.

This article appeared in the most recent edition of the East Asia Forum Quarterly, ‘Coming to terms with Asia’.