Situated just to the west of the Forbidden City is China's new Forbidden City, Zhongnanhai. The name means "the central and south seas" and takes its name from the two large lakes which are enclosed in the compound. The southern entrance is via Xinhuamen (the Gate of New China) which you'll see on Changan Avenue, the entrance guarded by two PLA soldiers and fronted by a flagpole with the Red Flag flying. The gate was built in 1758 and was then known as the Tower of the Treasured Moon.
The compound of Zhongnanhai was first built between the 10th and 13th centuries as a sort of playground for the emperors and their retinue. It was expanded during the Ming but most of the present buildings only date from the Qing Dynasty. After the overthrow of the imperial government and the establishment of the republic it served as the site of the presidential palace. Since the founding of the People's Republic in 1949, Zhongnanhai has been the residence and offices of the highest ranking members of the Communist Party: the Central Committee of the Communist Party of the State Council, the Central People's Government and the Military Commission of the Party Central Committee all have their offices here. People like Mao Zedong, Zhou En-lai, Liu Shao-qi and Zhu De and others all lived and worked here.
Prior to the arrival of the new batch of tenants Zhongnanhai had been the site of the emperor's ploughing of the first symbolic furrow of the farming season and the venue for imperial banquets as well as the highest examinations in martial art. The Empress Dowager Cixi once lived here; after the failure of the 1898 reform movement she imprisoned the Emperor Guangxu in the Hall of Impregnating Vitality, where, rather ironically, he later died. Yuan Shikai used Zhongnanhai for ceremonial occasions during the few years of his presidency of the Chinese Republic and his vice-president moved into Guangxu's death-house.