Rumour has it that Chinese President and Communist Party chief Jiang Zemin has already picked out the location for his retirement home in Shanghai, the city where he spent much of his career. But analysts say it is too soon to dismiss Mr Jiang and his powerful 'Shanghai Gang' from the political arena despite an upcoming leadership change. With the news this week that Shanghai party chief Huang Ju and Zeng Qinghong, head of the party's organisation department, had stepped down and were likely to take higher posts, analysts said the Shanghai faction would play a strong role in the future leadership. Both men are said to be under consideration for the Politburo's powerful seven-person Standing Committee. Mr Zeng, considered Mr Jiang's right-hand man, was a deputy party chief in Shanghai from 1986 to 1989. Minister of Education Chen Zhili, another ally of Mr Jiang, is in line for a top government post, possibly that of vice-premier, according to analysts. Ms Chen, one of the few women in the upper levels of government, was also a Shanghai deputy party chief. Although Mr Jiang is expected to step down from his government post next year and his party post next month, he might cling to his job as head of the Central Military Commission. Even without a formal title, he could still pull strings from behind the scenes much like paramount leader Deng Xiaoping did after he retired. 'With Jiang there and some of the other notables from the Shanghai faction who are clearly going to be loaded on to the standing committee of the Politburo, I think it is premature to say they're done and dusted,' a foreign diplomat said. The Politburo's Standing Committee was likely to have at least one member with ties to Shanghai after the party leadership shuffle early next month, analysts said. Mr Huang is the latest in a long line of former Shanghai officials - including Mr Jiang and Premier Zhu Rongji - to vault to the central government. Vice-Premier Wu Bangguo also came up through Shanghai, serving as the city's party secretary after Mr Zhu. But the party shuffle next month will bring in some leaders without strong Shanghai ties, including Hu Jintao - Jiang's heir-apparent for the presidency. If Vice-Premier Wen Jiabao and Li Ruihuan, head of an advisory body, won Standing Committee seats that could also contribute to the weakening of the Shanghai faction, analysts said. 'As the new leadership tries to establish itself, maybe in the course of years rather than months, inevitably non-Shanghai faction people will accede to very senior leadership posts at the expense of the Shanghai faction,' the foreign diplomat said. The rise of the Shanghai faction, which began when Mr Jiang took power in 1989, has caused resentment among political opponents. Also, less-developed provinces envy Beijing's favouritism towards Shanghai. Opposition from both of these fronts could contribute to the weakening of the faction. As the mainland's most developed city, Shanghai is a natural training ground for capable officials, which would explain the number of leaders hailing from the metropolis. But factional fighting in Chinese politics was still a factor in the rise of the Shanghai Gang, analysts said. 'I don't think this sort of factionalism in Chinese politics is gone, even though they clearly do like to talk about unity within the party,' one academic said. Certainly, Shanghai has benefited from having a line to the top by receiving state investment and the rights to become an international financial centre and a regional aviation hub with government approval. But the tie to central authorities has a downside: tight control which had stifled initiative and independent decision-making. 'Shanghai has been given carte blanche on economics, which has benefited the city. The price has been that they've had to keep their noses clean on politics,' another foreign diplomat said. City mayor Chen Liangyu, who has just been appointed as the new party secretary, has said provinces near Shanghai have raced ahead in privatising state firms and allowing entrepreneurs to flourish. China has given approval to develop the once-shunned private businesses but provinces like Zhejiang had already moved ahead without waiting for formal permission, like Shanghai did. Shanghai will continue to have its unique tie to the top for now. As the city's outgoing party secretary Mr Huang said: 'I will continue to support Shanghai's work. Having lived and worked in Shanghai for 40 years, I have deep feelings for the city.'