BEIJING, Sept 4 (Reuters) - China's next leader, Xi Jinping, looks to have emerged politically stronger after ruling Communist Party elders foiled a second attempt by outgoing President Hu Jintao to stack the top echelon of the new administration with his own allies.
Hu had been manoeuvring to promote his star protege, Hu Chunhua, to the party's supreme decision-making body, the Politburo Standing Committee, as part of the current leadership transition, but other senior party figures have opposed the idea, two independent sources said.
Hu Chunhua, who is not related to Hu Jintao, is instead likely to be given one of China's biggest but also most testing political assignments as new party chief of southwestern Chongqing, the job from which disgraced politician Bo Xilai was ousted, said the sources with ties to the top party leadership.
The sideways move for Hu Chunhua, currently party boss for Inner Mongolia, follows the demotion of another of Hu Jintao's closest allies at the weekend - both taken as signs that Xi may have a relatively freer hand to forge consensus among peers.
"Hu's (Jintao) loss is Xi's gain," one of the sources with ties to the leadership told Reuters, requesting anonymity due to the sensitivity of the subject. "Xi is in a less difficult situation."
China, currently mired in an economic downturn, faces growing calls for it to step up the pace of economic and social reforms, a task that could prove trickier for Xi if the Standing Committee were to include politicians reluctant to make changes to the cautious direction set by Hu over the past decade.
But the situation remains fluid, with the make-up of the new Standing Committee, currently comprising nine members, still to be finalised in a once-in-a-decade transition to be unveiled at the party's 18th congress, expected next month at the earliest.
Wu Guoguang, a political scientist at University of Victoria in Canada and a former party insider, said Xi would be the clear beneficiary if Hu Chunhua failed to make the Standing Committee.
"Hu's influence over Xi after the 18th congress would be weak," said Wu, a former policy adviser and speech writer to purged party chief Zhao Ziyang in the late 1980s. Hu's allies in the Standing Committee could serve as a "check and balance" on Xi, he said.
Hu Jintao's first setback in the leadership transition came at the weekend when Ling Jihua, a close ally who currently fulfils a role similar to cabinet secretary, was demoted after a scandal involving Ling's son.
The son was involved in a fatal crash involving a luxury sports car in Beijing in March, source have said, an incident that caused a storm of Internet rumours and shone an embarrassing light on the lifestyles of the children of the party's elite.
Hu Chunhua, however, is seen as a possible eventual successor to Xi as president, given he is only 49 and that there is still time for his elevation to the Standing Committee before Xi eventually steps aside.
Xi himself catapulted to the Standing Committee only at the 17th congress in 2007. He is heir-apparent to succeed Hu as party chief at the 18th congress and as president next year.
One source linked to the party leadership said President Hu still held hopes for his protege, known as "Little Hu", to become party boss of the country's financial capital, Shanghai, a more prestigious and high-profile post than the Chongqing job.
But this was a more remote prospect now, the sources said.
"I believe Hu Chunhua is still (being) groomed to be future leader. I think the crucial test is actually whether he can make it to the Politburo," said Joseph Cheng, a political science professor at City University of Hong Kong.
"(It) is a horizontal transfer. It definitely shouldn't be seen as a demotion."
In taking on the Chongqing post, Hu Chunhua would take over the old power base of Bo Xilai whose career unravelled this year after his wife was accused of murder in China's biggest political scandal in two decades.
"If he's going to go to Chongqing, he will face a lot of challenges because of the legacy of Bo Xilai," said Bo Zhiyue, senior research fellow at the East Asian Institute of the National University of Singapore.
Bo Xilai was an ambitious politician who turned Chongqing into a showcase for policies that appealed to the masses and party leftists but also made him powerful enemies in Beijing.
"How is he going to manage this place to make sure there are no major problems over the next five years and accumulate performance credit to make sure he gets into a higher position later on?" said Bo Zhiyue, who is not related to the ousted party boss.
In a consolation prize for President Hu, Beijing mayor Guo Jinlong has been promoted to the capital's party boss. Guo is a Hu ally and likely to be promoted to the Politburo.