Hu sets economic targets at Party meet

However, implementation of important new policy steps will probably have to wait until at least the third plenary session of the Central Committee, to be held about a year from now, a Barclays' research note says.

In Huang's view, investors expecting a big stimulus package after the Party congress are likely to be disappointed, although the new leaders will probably introduce some new projects.

"We expect the new government to introduce more investment projects, but also to rule out the possibility of more big stimulus measures."

The primary reasons, most analysts say, are lessons learned from the government's 4 trillion yuan ($640 billion) stimulus measures in 2008 and the fact that the economic slowdown is as much structural in nature as it is cyclical.

Many economists say China's economy probably bottomed out in the third quarter and may well achieve growth of 8 percent for the year.

"Potentially, this could imply downside risks for the economy after the congress if investors and entrepreneurs are expecting significant policies to support the economy," Huang says.

"They will probably be disappointed."

Although the economy has grown strongly for the past 10 years despite the global financial crisis, economic risks have also increased, including the state sector's continued dominance of resource allocation and growing fiscal and financial fragility.

The current growth model relies on free-market mechanisms for products, but also the government's ability to mobilize resources. However, as the economy reaches the high middle-income level, innovation and industrial upgrading are becoming key to sustainable growth.

"We think the new leaders fully understand these challenges and will take steps to alleviate them," Huang says.

However, Huang says it is possible for the new leaders to harvest some low-hanging economic fruit. Some reforms have already been extensively discussed and even experimented with, such as the household registration system, interest-rate liberalization, resource pricing and taxes. Changes in these areas could be introduced in more regions, or the whole country, relatively quickly.

"We might hear about some of these measures during the Party congress, the annual economic work conference in early December or at the National People's Congress in early March," Huang says.

For many multinational companies doing business in China, the major concerns are policy continuity and stability.

Edward Nusbaum, CEO of the accounting firm Grant Thornton International, says: "We hope the new leadership will continue to create an environment to support the business growth of foreign enterprises and promote further integration with the global economy."

Yan Xuan, president of the market research company Nielsen Greater China, says an open and transparent investment environment will help fuel China's economic growth.

"We hope the new leadership will continue to offer an open and welcoming attitude for foreign investors."

Sarah Butler, managing director of the consulting firm Booz & Company Greater China, says the company still sees short-term uncertainty in some companies in China.

"We expect with the leadership transition that there will be more certainty and confidence in the long-term fundamentals of China's economy, even though there will be challenges ahead in the next stage of China's growth and development."

huyuanyuan@chinadaily.com.cn