Saturday, September 26, 2009

Excellent new York times piece in wu jinglian. Lao Wu is right, the rent seeking interests are getting powerful!


China’s Wu Jinglian Keeps Talking

Published: September 26, 2009
AT 79, Wu Jinglian is considered China’s most famous economist.

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Gilles Sabrie for The New York Times
Wu Jinglian helped to create China's market economy, and now he is defending it against conservative hardliners in the Communist Party.

A Life Woven Into Modern China’s History
In the 1980s and ’90s, he was an adviser to China’s leaders, includingDeng Xiaoping. He helped push through some of this country’s earliest market reforms, paving the way for China’s spectacular rise and earning him the nickname “Market Wu.”

Last year, China’s state-controlled media slapped him with a new moniker: spy.

Mr. Wu has not been interrogated, charged or imprisoned. But the fact that a state newspaper, The People’s Daily, among others, was allowed to publish Internet rumors alleging that he had been detained on suspicions of being a spy for the United States hints that he is annoying some very important people in the government.

He denied the allegations, and soon after they were published, China’s cabinet denied that an investigation was under way.

But in a country that often jails critics, Mr. Wu seems to be testing the limits of what Beijing deems permissible. While many economists argue that China’s growth model is flawed, rarely does a prominent Chinese figure, in the government or out, speak with such candor about flaws he sees in China’s leadership.

Mr. Wu — who still holds a research post at an institute affiliated with the State Council, China’s cabinet — has white hair and an amiable face, and he appears frail. But his assessments are often harsh. In books, speeches, interviews and television appearances, he warns that conservative hardliners in the Communist Party have gained influence in the government and are trying to dismantle the market reforms he helped formulate.

He complains that business tycoons and corrupt officials have hijacked the economy and manipulated it for their own ends, a system he calls crony capitalism. He has even called on Beijing to establish a British-style democracy, arguing that political reform is inevitable.

Provocative statements have made him a kind of dissident economist here, and revealed the sharp debates behind the scenes, at the highest levels of the Communist Party, about the direction of China’s half-market, half-socialist economy.

In many ways, it is a continuation of the debate that has been raging for three decades: What role should the government play in China’s hybrid economy?

Mr. Wu says the spy rumors were “dirty tricks” employed by his critics to discredit him.

“I have two enemies,” he said in a recent interview. “The crony capitalists and the Maoists. They will use any means to attack me.”

Nevertheless, some analysts believe that Mr. Wu’s critiques are aiding one government faction in a power struggle with another, and that he is protected.

His pro-market ideas have influenced a generation of younger economists who now hold senior government posts, including Zhou Xiaochuan, the leader of China’s central bank, and Lou Jiwei, chairman of the country’s huge sovereign wealth fund.

“He is like the father of economics here,” says Laurence Brahm, who wrote several books about China’s reform period. “What he said was the blueprint for reform.”

Critics say Mr. Wu’s influence on government is waning. (They note that he is not invited to weekly economics seminars held for top leaders, including Prime Minister Wen Jiabao.)

Given this, some people say, Mr. Wu is courting danger by speaking out.

“You have to remember, China is a dictatorship,” says Victor Shih, a professor of political science at Northwestern University. “If they want to shut him up, they can.”

GIVEN the risks, it’s hard not to wonder why one of the architects of China’s reforms has turned so negative, so angry and so defiant.

Mr. Wu’s personality and tumultuous life story provide some clues.Even his supporters acknowledge that he has a combative streak and describe him as a stubborn idealist whose verbal jousting skills were honed during years of hardship and political warfare.

“He always expressed his ideas in the sharpest way,” says Zhang Chunlin, who was a student of Mr. Wu. “He’s not diplomatic. Even at close to 80 years old, he argues with journalists.”

That he has lived such a long life would have surprised his parents, wealthy intellectuals who ran one of the country’s largest independent newspapers, in Nanjing. A sickly child with tuberculosis, he was not expected to live past the age of 1. He spent much of his youth confined to bed, reading Russian novels and the works of Lu Xun, an influential Chinese writer from the 1920s.

One of his earliest memories is arriving in the wartime capital, Chongqing, in 1937, at the age of 7, as his family fled Nanjing and the invading Japanese. The emaciated rickshaw driver stopped for opium; the destitute were everywhere.

“In Shanghai or Nanjing, beggars would help you and then ask for money,” he recalls. “But in Chongqing, they’d grab food from your mouth.”

Such experiences helped mold him into an idealistic socialist, as many Chinese were during that era. He studied Marxist economics in college and graduated with honors in 1954 from Fudan University in Shanghai. That won him a position at the country’s elite research institute, the Chinese Academy of Sciences in Beijing.

Soon after he arrived, however, China was engulfed by political campaigns, like the Great Leap Forward, that required little research. The cruelest was the Cultural Revolution, from 1966 to 1976, when intellectuals and the descendants of landlords were identified as “counterrevolutionaries.” In Beijing, Mr. Wu says, Red Guards shaved half the head of his wife, Zhou Nan, and ransacked his mother’s home.

Mao Zedong wanted intellectuals sent to the countryside to be “re-educated.” So in 1969, virtually the entire Academy was sent to Henan Province to learn to farm and to build houses in remote villages.

Ms. Zhou was ordered to work as a peasant in Shanxi Province; their two children, ages 4 and 6, were left with relatives in Beijing.

“When I left, I was prepared never to return home again,” Mr. Wu says solemnly. “We were told we’d farm for the rest of our lives.”

Mr. Wu says the hardships included sessions in which he was denounced as an anti-Maoist. When pressed to confess, or to denounce others, he says he refused, and then was beaten and placed in solitary confinement.

“They sent me to the stage to confess, then they started beating me,” he says. “Of course I felt extreme anger. But I realized it wouldn’t last for long; it was too absurd.”

This didn’t shake his faith in socialism, but he began to distrust the people around Mao who were calling believers like him enemies of the people.

His only solace, he later said, was the friendship he developed with a scholar named Gu Zhun, who was an early critic of central planning, and an advocate of market reform. Mr. Gu encouraged him to learn English and to explore the outside world, which Mr. Gu said was the only hope for China to develop.

When Mr. Wu returned home three years later, in 1972, his daughter said he was still “under the spell of Communism,” partly because of the guilt he felt for having grown up in a wealthy home.

“He said a person should have just one shirt,” recalls his daughter, Shelley, 46. “And he didn’t like my sister and I to write our names on our personal property.”

AFTER the Cultural Revolution ended with Mao’s death in 1976, Mr. Wu says he began to see that Mao’s economic policies had brought the country to the brink of collapse.

In 1978, when Deng Xiaoping began to press ahead with bold reforms aimed at opening up the country, Mr. Wu was heavily influenced by the thought and advice of his colleague Mr. Gu, who had died in 1974. He learned English, and in 1983 went to Yale as a visiting scholar. Much of his time there was spent studying modern economic theory.

Mr. Wu returned to Beijing in 1984, just as China’s economic reforms were gathering momentum under Zhao Ziyang, the party leader and chief economic planner.

That year, Mr. Wu says he helped Ma Hong, a top government adviser, draft a paper that defined the country’s shift from a planned to a market economy. “This was a very important turning point for China’s economy,” he says.

Once the proposal was accepted, Mr. Wu was elevated to the Development Research Center, the institute affiliated with the powerful State Council. Soon, he was visiting Zhongnanhai, Beijing’s leadership compound, to offer advice and debate economic policy.

Several research institutes advised Mr. Zhao and Mr. Deng on how to remake the old socialist system with elements of free enterprise. Some who sat in on those meetings say that Mr. Wu was argumentative and prickly when debating economic policy, even with Mr. Zhao.

The reforms, though, fueled strong growth and are widely credited with changing the course of the nation.

But by the late 1980s the reforms also opened the doors to corruption and soaring inflation, feeding public anger that contributed to the 1989 student demonstrations in Tiananmen Square.

Mr. Zhao was removed from office just ahead of the bloody assault on the students and the campaign against dissent and “liberalization.” The reforms stalled.

Not long after, Mr. Wu and other reformers were attacked for favoring a Western-style market system.

Bao Tong, a former aide to Mr. Zhao, said the reformers faced strong opposition from Soviet-trained economists who were wedded to the ideas of central planning.

“For the first guys who advocated a market system, it was pretty dangerous,” Mr. Wu said in a recent telephone interview.

He was among them, and so he was derisively branded “Market Wu.” For a time, publishers refused to sell his books.

“That’s when the conservatives came in and said the reforms had messed everything up,” says Barry J. Naughton, a professor at the University of California, San Diego, and author of “The Chinese Economy.”

Mr. Naughton says: “Wu Jinglian fought against the backlash. He said, ‘We need more market reform, not less.’ ”

The reform camp became stronger after Mr. Deng’s famous 1992 “southern tour” — in which he called for bolder reforms and encouraged people to get rich.

Soon, Mr. Wu’s influence in government grew. In the 1990s, he served as an adviser toZhu Rongji and Jiang Zemin, the country’s top leaders, helping them speed up reforms and restructure badly run state-owned companies.

Every step of the way, he fought off opposition, and debated, often publicly, the shape and pace of the reforms.

“This debate about the market economy is the most important discussion throughout the 30 years of reform,” says Liang Guiquan, an economist at the Guangdong Academy of Social Sciences. “And it’s still going on now. Wu Jinglian has always been at the center of that debate.”

BY most measures, China’s economic transformation has been a resounding success. Anyone who travels here can see it: the change in people’s living standards, the makeover of big cities — what has come to be called China’s economic miracle.

But Mr. Wu sees the defects: a government prone to “meddling” in the marketplace; a widening income gap; inefficient monopolies; and crony capitalism.

His critique sharpened considerably after Jiang Zemin stepped down as president in 2003, and Mr. Wu’s role was diminished.

In interviews, Mr. Wu says he feels compelled to speak out because conservatives and “old-style Maoists” have been gaining influence in the government since 2004. These groups, he said, are pressing for a return to central planning and placing blame for corruption and social inequality on the very market reforms he championed.

At the same time, Mr. Wu says, corrupt bureaucrats are pushing for the state to take a larger economic role so they can cash in on their positions through payoffs and bribes, as well as by steering business to allies.

“I’m not optimistic about the future,” Mr. Wu said. “The Maoists want to go back to central planning and the cronies want to get richer.”

They are getting powerful? They are already so entrenched that there does not seem to be a way out to me other than a bureaucratic war that replaces factional control with effective and objective mechanisms for making policy. Look at the failures of implementing the labor law, anti-monopoly law (which excludes most of the monopolies), bankruptcy etc, etc. I see a bad moon rising.
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Tuesday, September 22, 2009

Hu used agenda power to freeze out Xi

A colleague posted an interesting article in which Wang Changjiang, a cadre at the Central Party School, revealed that Hu Jintao used his agenda setting power to freeze Xi from entering the CMC. It is of course significant that Wang revealed this information, likely on behalf of Xi, which suggest some degree of dissatisfaction on the part of Xi Jinping on Hu's action. The relevant passage is:

"At the plenum, there was no reflection of personnel changes related
to the party's leadership of the military, because this was not
included in the agenda for discussion," Wang Changjiang,...

Although the party secretary general's power may be waning, it still includes agenda setting power at Politburo and PSC meetings, which in turn set the agenda for CC plenums. This power, I believe, is (somewhat) enshrined in the party constitution. If what he says is true, then it seems clear that Hu used his agenda setting power to delay Xi's entrance into the CMC. And Wang's revelation further suggests that Xi is dissatisfied with this, perhaps a lot.

China party scholar hints at Xi Jinping promotion
Tuesday, September 22, 2009 5:52 AM
BEIJING (Reuters) - A Chinese Communist official on Tuesday held out
the possibility that Vice President Xi Jinping could still be promoted
to a military position, in a step toward ultimately taking over the
nation's top leadership post.
Some media had speculated that Xi, who is expected to succeed
President Hu Jintao in 2013, would be anointed vice chairman of the
Central Military Commission at a party plenum last week, reinforcing
his succession claim. However, the plenum closed last Friday with no
word of any personnel changes.
If Xi rises through the ranks according to schedule, it could reduce
worries about instability among the secretive inner circles of the
Communist Party, which has no transparent mechanism for choosing its
"At the plenum, there was no reflection of personnel changes related
to the party's leadership of the military, because this was not
included in the agenda for discussion," Wang Changjiang, director
general of the Central Party School's department of education and
research on party building, told reporters.
"But there will be personnel changes at some point," he told a news
conference designed to explain the decisions of the just-concluded
plenum when asked about Xi's possible promotion.
Wang refused to be drawn any further on possible mechanisms for such a
promotion, or the timing of future meetings at which it might be
The promotion could be announced at an expanded meeting of the
Military Commission after the October 1 National Day celebration, Hong
Kong media have reported, without giving an exact date.
When Hu took over the top party, military and government positions
from his predecessor Jiang Zemin, it marked the first smooth
transition of power since the Communist Party began ruling China in
The lack of any announcement of Xi getting the No. 2 job in the
military commission suggested that Hu, who still has three years left
in his term as party chief, would wait to begin ceding positions, and
influence, to his likely successors.

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Saturday, September 19, 2009

PLA Resistance to Xi Jinping?

A colleague sent me the piece below on Central Party School Professor Du Guang's comment on Xi's exclusion from the CMC at the 4th plenum. There is a rather jarring passage in the piece in which Du Guang said "Jiang Zemin panders to powerful figures in the military and promote them at will. Relatively speaking, Hu Jintao does this less. This is perhaps why his arrangements in military personnel are meeting resistance." Although Du is an "old liberal" at the Party School, it still seems rather out of bound to comment on the party secretary general's relations
with the army, and even compare it with the loose promotion practice of his predecessor (which I also find to be unfair as Hu just promoted three princelings to full general).

Reluctance in the PLA against Xi Jinping is plausible. I have always thought that Xi Zhongxun's revolutionary stature and Jinping's wife's connections in the military would make him a popular figure in the military. It turns out this may not be the case. I was doing some research on the Fourth Front Army recently and looked through a list of all officers who were made generals in 1955. Of the over 1000 generals promoted at the time, only ten or so came from the Shaanbei revolutionary area where Xi Zhongxun had been active before 1935. Thus, Xi Zhongxun did not have
any base in the army; This may explain why Xi was a compromise candidate because his influence in the army was limited, thus making him vulnerable to whoever still retained influence in the army.

Hong Kong Economic Times

四中全會閉幕 不提軍委副主席安排


2009 年09 月19 日






10 年前的接班模式,中共政治局常委習近平或會出任軍委第一副主席,以便在

2012 年中共十八大上順利接班,出任中共總書記兼軍委主席。但昨日公佈的全會


1999 年 9 月 19 日中共十五屆四中全會閉幕時,當局發佈會議公報專門提及人事安



泛關注。港台媒體、美聯社、英國廣播公司( BBC)等,專門就此事報道。美聯


權會順利交接。 BBC 引述境外報道指,當局有可能在稍後的軍委擴大會,才公佈













56 歲的習近平是中太子黨成員之一,父親是中共元老習仲勛,習仲勛在 20








Surely Xi was plucked from relative obscurity by Zheng Qinghong as part of the latters' retirement deal? It is difficult to believe that it is PLA resistance that thwarted Xi's move onto the CMC. Far more plausible that it is CYL resistance...
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Friday, September 18, 2009

More ambiguity about Xi Jinping

Now the Hong Kong press reports that Xi was voted into the CMC, but they won't announce it until after the national day parade. Well, why? Hu's induction into the CC was announced at the 4th plenum of the 15th CC, so why break the tradition now? Just to give Hu some face? I don't understand at all, if this rumor is true.

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Xi Jinping did NOT get into the CMC?!

Well folks, I read through the announcement of the 4th plenum twice carefully and saw no mention of anyone being promoted into any position. I suppose a late announcement is possible, but at this point, it doesn't seem like Xi Jinping has been promoted into the Central Military Commission.

My original hypothesis was that Hu would try to delay Xi's entrance in order to set himself up for serving another full term as chairman of the CMC. Through whatever maneuvering, Hu seems to be succeeding thus far. Xi, however, received further assurance that he is still the designated successor as he was the only person who made an important speech at the 4th plenum besides Hu. Thus, an emerging compromise may be that Xi would allow Hu to serve another term as CMC Chairman. In exchange, Hu would not cause trouble for Xi's ascension into the party secretary general position in 2012. We'll see if this arrangement holds.

Another mild surprise of the announcement is that despite all this talk of political reform, the 4th plenum ended with the same vague language of "strengthening inner party democracy" as in the past. I am not seeing any concrete reform. Perhaps the concrete measures will come later, but I somehow doubt that.

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Wednesday, September 16, 2009

Willy Lam says Xi will get into CMC

Well, I just can't bear it any more, and now it is possible that Wang Lequan may be removed after the plenum. Oh, the suspense!

Asia Sentinel

Written by Willy Lam
Tuesday, 15 September 2009

Hu Jintao's political woes may afford Xi an early opportunity to be inducted into the powerful Central Military Commission

While most plenary sessions of the Chinese Communist Party's Central Committee – usually held once a year – merely endorse decisions made by the supreme Politburo Standing Committee, the plenum now taking place in Beijing deserves special attention.

Party insiders say Vice-President Xi Jinping, 56, may be promoted to the vice-chairmanship of the CCP's Central Military Commission. This will not only confirm Xi's status as Hu's successor as party general secretary and state president, but also spell a bonanza to the political fortune of the "Gang of Princelings" – the offspring of party elders – that Xi heads.

Xi, the son of former vice-premier Xi Zhongxun, does not come from the Communist Youth League faction led by President Hu Jintao. And Hu, who has been military commission chairman since 2004, has maneuvered to delay Xi's induction to the policy-setting military organ. One reason is that while the princelings are heavily represented in the top echelons of the People's Liberation Army, very few youth league affiliates have attained senior ranks in the defense forces.

Within the standing committee put together at the 17th Party Congress in late 2007, Xi outranks long-time Hu protégé Li Keqiang, who as First Vice-Premier is expected to take over from Wen Jiabao as premier in 2013. It is understood, however, that Hu has hoped to delay Xi's induction to the military commission so as to allow Li, a former party boss of the Youth League, time to build up a power base at the top.

However, recent events in Xinjiang, in which more than 200 people were killed in ethnic violence since early July, have dealt a blow to the Youth League faction. The bulk of the top cadres running Xinjiang and Tibet, including their party secretaries, respectively Wang Lequan and Zhang Qingli, are veteran youth League affiliates.

At the plenum, which runs until Friday, Hu is expected to have to explain why he hasn't sacked Wang, who has worked in Xinjiang since the early 1990s, in the wake of the disastrous riots. A well-known hawk, Wang has masterminded a ruthless Sinicization policy in Xinjiang, which means weaning Uighurs from their linguistic, cultural and religious heritage. So far, supremo Hu has only fired the party secretary of Urumqi and the police chief of Xinjiang, who are regarded as scapegoats to cover up for Wang's failed policies.

With Hu and his Youth League faction on the defensive, Xi's supporters in the Politburo and Central Committee are pushing for his appointment to the Military Commission. After all, Hu himself was first made CMC vice-chairman in 1999, three years before he succeeded ex-president Jiang Zemin as party general secretary in 2012.

There are, however, no specifications in the party charter concerning when a crown prince should be made a CMC member. And given that Hu is still the undisputed supremo of Chinese politics, the president could count on the support of the majority of Central Committee members who are loyal to him – and deny Xi his price until the next Central Committee plenum in 2010.

In the meantime, Hu has to tackle another political minefield at the on-going Central Committee plenum: the plethora of scandals involving the offspring of party leaders. After all, the major theme of the conclave is "party construction," a codeword for ridding the party of corrupt cadres and other bad apples.

It is no coincidence that former premier Zhu Rongji, who retired in 2003, published last month an anthology of the interviews he had given during his five year term as head of government. One of China's most popular politicians, Zhu is remembered as an incorruptible official who personally handled a dozen-odd major graft cases. Several of Chinese media have recently cited one of Zhu's best known sayings: "My only hope is that after retirement, the people will say ‘he is a Mr Clean' – and I'll be satisfied."

Given reports that a high-tech firm once run by Hu's son, Hu Haifeng, was implicated in a corruption incident in Namibia, Africa, senior cadres in the party have indirectly blasted the president by singing the praises of Zhu. While Hu's close aides have banned all reference to Hu Haifeng or his company in the Chinese media, the president still has a lot of explaining to do about how to effectively prevent the spouses and kids of cadres from turning their political connections into hefty profits.

Even if XJP is made vice chair of the CMC there is still going to be an ugly battle for the reform of the military. Add to that the fact that at the local level military officials are buying non-military posts (mai guan), because it is far more attractive to control economic assets directly than to try to be a professional soldier while making one's fortune. This is leading to a potentially very dangerous trend of military associated interference at the local/regional level. This is one step removed to what we are talking about with XJP and the CMC, but it speaks to the fact that eventhough XJP has strong military ties from his previous secretary posts to senior offials, the top leader will preside over an increasingly factious military structure. Don't leave out the machinations of JZM in your calculations, because afterall, the upper eschelon of the military is still under his control.
Can you provide the source for Willy Lam's article?

Prof Joseph T. Miller
Ok, just did
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Monday, September 14, 2009

It's Plenum Season Again,

Dear readers, it's plenum season again,which is a bit like election season, except there is no data, just a lot of speculations. The big question in the on-going plenum is whether Xi Jinping, Hu's likely successor, will be inducted into the Central Military Commission, as this would further seal his candidacy. We will see; I think there is a chance that Hu will find some excuse to exclude Xi from the body in order to prolong his own influence in the future. Here are a couple of excellent pieces on this issue:

http://www.nytimes.com/2009/09/15/world/asia/15china.html?_r=1&partner=rss&emc=rss&pagewanted=print [link OK]

The New York Times

September 15, 2009
China Watched for Sign of New Leader

BEIJING — China’s governing Communist Party will convene its annual policy meeting on Tuesday with a sober, if not soporific, mandate to root out government corruption and make the party adapt to changing times.

But lurking in the background is a more compelling topic: Who will become China’s next ruler in 2012?

Analysts will watch the meeting, the annual plenary session of the party’s 17th Central Committee, to see whether Vice President Xi Jinping is given the additional title of vice chairman of the Central Military Commission.

Such an appointment would be seen as a confirmation that Mr. Xi, 56, is set to succeed President Hu Jintao when Mr. Hu’s second term ends in 2012. Any Chinese leader must have experience in leading the military, which is under party control. Mr. Hu was awarded the same post in 1999, three years before he became the party’s general secretary in 2002.

Yet Chinese politics are so opaque that no outsider can say for certain that Mr. Xi, the presumed heir, will win the position — or that there will be a mark against him should he not.

“There is no foregone conclusion these days,” said a political analyst at a Beijing institution tied to the Communist Party.

Whether that is true is a central question hanging over the meeting this week. Since the founding of the People’s Republic 60 years ago, the Communist Party has governed both the Chinese people and itself strictly from the top down, with all important actions approved by a handful of party leaders united by power and personal relationships.

Officially, at least, the 2,000 or more Central Committee members meeting this week have been given an agenda to shake up that model. The members are supposed to prepare plans to bring democracy to the party’s inner deliberations, choosing new leaders by consensus, not by the dictates of those at the top.

“A new crop of leaders who grew up after the reform and opening up started are going to step into new leadership roles” in 2012, Zhen Xiaoying, a professor at the Communist Party’s central party school, stated in a recent article in the state-run newspaper People’s Daily. He was referring to the period of economic reform that began in 1978.

“The era of relying on authority and personal charm to run the party is over,” he said.

Mr. Xi and Mr. Hu epitomize that shift. Mr. Hu, 66, joined the party in 1964, two years before Mao’s Cultural Revolution brought China a decade of social and political chaos. Mr. Xi joined in 1974, two years after President Richard M. Nixon first visited Beijing and China began to reconnect to the outside world.

Mr. Hu was the party’s designated successor to Jiang Zemin, who ruled a battened-down China after the bloody suppression of the 1989 Tiananmen Square protests.

The process of political succession in China’s one-party system is always shrouded in intrigue. The party elite elevated Mr. Xi to the ruling Politburo Standing Committee in 2007 and gave him the highest rank of any leader of his age group, signaling that he had been chosen to succeed Mr. Hu when the latter’s second five-year stint as top leader ends in 2012. But the party’s internal deliberations on such matters are in the highest order of state secret, and there has been no public confirmation of Mr. Xi’s status.

Whatever changes the plenum orders are unlikely to resemble democracy as Westerners know it. China has long shunned Western democracy, branding it anarchy, and embraced what it calls “democratic centralism” — essentially, passing carefully reviewed suggestions from lower-level party organs to leaders at the top.

Xinhua, the official Chinese news agency, recently quoted Mr. Hu as saying that democratic centralism would remain China’s guiding version of democracy. One liberal political analyst who has called for a more open Chinese society, Liu Junning, argued in a telephone interview that prospects for genuine changes this week were dim.

“I think it is important in China first to strengthen formal institutions such as the legislature and the court system, rather than informal structures such as the ruling party,” he said. “Let’s see if there are any open factions within the party — any open opposition, any open minorities.”

China’s governing elite, like any group, has factions, but they are tightly cloaked. Mr. Xi, for example, is widely believed to be the favorite of Mr. Jiang, who still has considerable sway in retirement.

After Mao wreaked havoc with the party hierarchy by designating and then toppling multiple successors, the party’s elite clawed back the power to oversee political succession. Mr. Hu was effectively designated China’s future top leader in 1992, leaving Mr. Jiang, then the new No. 1 official, little choice in the matter. Likewise, Mr. Hu’s apparent favorite, Deputy Prime Minister Li Keqiang, was not selected as his future successor, though Mr. Li is now considered likely to be the next prime minister.

The plenum will be closely watched for any signs that internal politicking has kept the succession contest alive.

The analyst at the Communist Party institution, who spoke on condition of anonymity because he was not authorized to speak to the press, said he believed that Mr. Xi might not win the military post this week. “If he doesn’t,” he said, “it would show that there’s more of a balance of power. But it would not mean that Xi lost the opportunity.”

The plenum is also scheduled to take up anticorruption measures that could include a requirement that some party officials disclose their holdings of property or financial instruments.

Jonathan Ansfield contributed reporting, and Li Bibo contributed research.

A Party Plenum Worth Watching
China's Communist Party has some tough decisions to make.

BEIJING—The largest ruling body of the Chinese Communist Party—the Central Committee—will convene its annual meeting in Beijing today. This meeting isn't just another plenum. It will say much about how the current Chinese leadership wants to unjam a backlog of reform initiatives and what role it wants the Party to play in the years to come.

The current leadership has coped with crises of all sorts, from earthquakes to ethnic unrest, exceptionally well, all the while avoiding the soul-searching and power-sharing that many outside of China have insisted was necessary for the Party to survive and the country to prosper. Both President Hu Jintao and Premier Wen Jiabao have a right to feel pleased.

But there is also ample reason for anxiety about the Hu-Wen legacy. For all the praise heaped on China's economic performance by outsiders, many scholars and officials here know better, and they continue to express concern about structural challenges. Analysts bemoan the high cost of housing, the appalling state of health care and the stubbornly high unemployment rates of college graduates. These issues may be raised by plenum delegates. Many ordinary Chinese and some officials believe they have been shunted aside by Party elites more concerned with overseas corporate takeovers and access to oil and strategic minerals than the widening income gap.
Xi Jinping, the future Hu Jintao?

To counter this dissatisfaction, the Hu administration may restart local elections, expanding the means by which dissent can take place within the Party. The Party may also announce measures to discipline cadres who employ power for private purposes. The well-oiled state-run media machine has run stories hinting of a coming full-scale crackdown on corruption in Party ranks, as well as a requirement that cadres declare their private and family assets publicly. Even if those rumors are simply smoke, they must reflect discontent among some Party officials who feel themselves excluded from decision-making.

The other major issue on the agenda concerns the future leadership of the Party. Xi Jinping, the current Vice President, heads the shortlist to succeed Mr. Hu as party secretary in 2012, followed closely by Vice Premier Li Keqiang. Many analysts outside China expect that Messrs. Xi and Li will ascend together, sharing the same sort of arrangement that their predecessors President Hu and Premier Wen enjoyed: a division of responsibilities and a tacit agreement not to challenge the prevailing political protocol. Policy disagreements are allowed, so long as power plays are eschewed.

But the problem might turn out to be chemistry. Messrs. Hu and Wen appear to genuinely respect and even like each other. It is not at all clear whether Messrs. Xi and Li can work out the same understanding, for they are competitors whose time in the political saddle has not been especially long. They are each expanding their networks inside the Party but they are still working out whom they can trust at the apex of the political system.

There is also no clear sign that Mr. Hu is ready to name a clear successor, or if he did, that his choice would be met with acclaim across the Party. Whether the armed forces feel comfortable with Mr. Xi is also very much an unknown: A key test of his support base at this plenum will be whether he is chosen to be the vice-chairman of the Central Military Commission. Should deadlock result, there are other officials in the Party who could seek to seize the opportunity to disrupt the usual process of political succession and try to claim Party leadership for themselves.

There are plenty of examples of Chinese plenums making history. The plenum held in 1978 marked the beginning of Deng Xiaoping's effort to engineer economic transformation through modernization and moving the state away from its dominance of the market. The 1992 plenum, barely three years after the Tiananmen Square incident, stiff-armed conservatives who tried to roll back market reforms but also left no room for organized dissent. Those plenums were the beginnings of a great economic experiment that has largely worked.

This plenum might turn out to be another defining meeting for the current leadership, which has so far been interested less in transforming China than securing continued tenure for the Party. The plenum could be the takeoff point for a more confident Communist Party, one that would be willing to experiment with political alternatives like direct elections. Whatever the outcome, this week's plenum promises to make a bit of history.

Mr. Moses is dean of the Beijing Center for Chinese Studies.

Its strange that the Western media has not picked up on the strong attacks by leftists and the Shanghai gang on Wen Jiabao leading into this plenum - nothing new to be sure, but perhaps a sign of troubled waters.
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