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One major cause of anxiety about China passed without serious incident Sunday. In its first orderly transfer of power in history, the ruling Communist Party officially installed Hu Jintao as de facto top leader and retired Jiang Zemin.

There will be no power struggle, no political turmoil to undermine economic growth. The authoritarian regime whose market reforms turned an impoverished socialist state into the world's workshop will continue unchecked. But so should a multitude of fears - for which the Bush administration should be prepared.

China poses problems whether stable or unstable. The former appears assured only for now. Structural economic and political weaknesses, combined with sharply conflicting domestic interests, could usher in the latter in the next few years.

Under the status quo, cheap Chinese labor will continue to drain jobs and market share from old-line U.S. industries such as textiles and furniture. Pressure will likely grow as well on technology jobs as America's research and development advantage shrinks. From Ph.D.s to patents, researchers have tracked a noticeable U.S. decline in an area vital to future economic growth.

That competition extends to vital raw materials. China became the world's second-largest energy consumer in 2003, with no slowdown in sight. It imports huge quantities of scrap steel, concrete and wood. And at $53 billion in 2003, China is one of the leading recipients of foreign investment.

Meanwhile, authoritarian rule in Beijing is a mixed blessing for the United States. Though cooperative on some issues, such as North Korea's nuclear program, China has been defiantly aggressive on others, including the future of Taiwan and U.S. influence in Asia.

Yet political and economic turmoil could be a greater problem, destabilizing financial markets and world politics. The potential is great: China's inefficient banking system holds billions of dollars' worth of bad loans. Millions of people still work for money-losing state-owned companies. Huge gaps in wealth between booming coastal cities and the impoverished interior stir resentment. Water shortages and pollution plague urban areas. The Communist Party rejects democracy but is notoriously corrupt and split between two competing factions.

Whether China implodes or not, America faces a challenge.