China's new leader Hu Jintao vowed to push ahead with market reforms which have fuelled a booming economy, but gave no clues to how he would tackle problems from joblessness to an ailing banking system.

As he formally succeeded Jiang Zemin as chief of the ruling Communist Party, Hu inherited an economy expected to grow by eight per cent this year - an eye-catching performance at a time when a global malaise has struck most major economies.

But analysts said a plethora of problems from joblessness to ailing banks means Hu and his team have their work cut out.

"The whole party and people from all ethnic groups will unite more closely and concentrate on construction and development so as to continue pushing forward China's reform, opening up and modernisation drive," Hu said.

Hu's brief speech gave no hints as to how he planned to solve the serious woes that threaten to gum up the high-revving Chinese economic engine.

The problems are legion. State firms - the money-losing legacy of socialist planning - are shedding millions of workers in a drive to modernise and turn a profit.

China's banks, forced for decades to inject fresh cash into those state firms, are staggering under hundreds of billions of dollars worth of bad loans.

And the farmers who brought the Communist Party to power in 1949 on promises of social and economic equality are finding themselves falling farther behind the wealthy cities.

In spite of those sobering realities, the Chinese economy has been the envy of much of the world.

Gross domestic product grew 7.9 per cent in the first three quarters, exports soared more than 20 per cent and foreign investment is on track to top $50 billion this year.

So Hu and his eight new colleagues on the all-powerful Politburo Standing Committee are not likely to risk tipping the economic boat by deviating from the slow-and-steady reform pace set by their predecessors.

"In the short term, they are going to be conservative because it's a new bunch of people and they have to get the measure of one another working together," a Western diplomat said.

Reform will still be a priority, as a glance at the rest of the new party line-up indicates.

The number two behind Hu is Wu Bangguo, who has been the point man for overhauling the sickly state sector.

Number three is Wen Jiabao, a protege of Premier Zhu Rongji likely to take over the economic protfolio from his hard-nosed boss in March when the old guard give up their government posts.

However, some question whether Wen's consensus-building style is suited to pushing painful reforms against entrenched interests like state monopolies and protective local governments.

"It's a task that calls for breaking a lot of eggs and you need someone to take the tough steps," said Michael Kurtz, regional economist with Bear Stearns Asia in Hong Kong.

"Too much of a compromise-driven approach effectively means that critical reform tasks will be attacked a less vigorous fashion," Kurtz said.

One priority will be to nurse the banking system back to health. Up to half of bank loans will never be repaid, but the banks still prefer to lend to inefficient state firms rather than private firms with no credit history or government backing.

"Financial problems, such as the liquidity trap problem of the banking system, are already threatening sustainability of China's rapid growth," Salomon Smith Barney economist Yiping Huang said in a research note.

China has avoided a "big bang" approach that would deal with the bad loan problem painfully but swiftly. It is seen moving ahead with a go-slow plan that relies on steady economic growth to avoid a financial meltdown.

Private business is also expected to get more support from the new leadership, thanks in part to Jiang Zemin's "Three Represents" formulation allowing private entrepreneurs into the party, and thus into the chambers of power.

Analysts expect measures soon to protect private property and help small and medium-sized business get the cash they need to thrive.

"I believe that to be the critical reform task in China, if not the one single most important policy issue for the global economy: how to keep private sector growth and job creation moving forward in China," Kurtz said.