China prepares for the 18th party Congress

Events of the past four months, especially those leading to the ouster of ‘princeling’ Politburo (PB) member and Chongqing Party Secretary Bo Xilai, stunned the Chinese Communist Party (CCP) leadership. The widely publicised attempt by the Chongqing Public Security Bureau chief to seek asylum in the US Consulate in Chengdu, followed within weeks by the dramatic escape of a blind dissident activist from under house arrest to the US Embassy in Beijing, deeply embarrassed the Party. With inner-Party factional in-fighting unabated and popular resentment growing, the months before the 18th Party Congress convenes in Beijing late this October could prove to be rather rocky. The CCP is now badly bruised and weakened.

Matters are complicated by the slowdown in the economy, though an annual growth rate of 8% is quite likely. However, the 7.3% rise in food prices by May 2012, and increase in inflation in the past couple of months is a complication that has accentuated the widening urban-rural income gap. The largely urban-based fresh graduates are finding it difficult to get ‘white collar’ jobs or assignments of their choice, causing worry to China’s leaders who have hastened to assure that adequate ‘blue collar’ jobs are available. The situation has added to popular disenchantment. Official estimates are that at least 500 protests and demonstrations occur across China each day.

Reports critical of nepotism and corruption by cadres slip through into China’s cyber space, despite the Party Propaganda Department’s censorship.  While profligate spending by Party cadres and the extravagant life-style of the taize, or ‘princelings’ who are children of senior and veteran cadres, has attracted adverse public attention, there is talk in Beijing of a flight of capital.

Early this June, China’s central bank, the People’s Bank of China (PBoC), posted on its website that Chinese officials had secreted around Yuan 800 billion (US$ 120 billion) abroad between 1990-2005. While this posting was removed within hours, Gan Yisheng, deputy secretary of the Party’s watchdog outfit, the Central Discipline Inspection Commission (CDIC), indirectly confirmed the disclosure by announcing that a ‘flight prevention coordination mechanism’ will be established in each province together with enhanced ‘passport management’ measures.

Meanwhile, the Chinese magazine ‘Hurun’ released the results of a poll of high net-worth Chinese parents with assets valued at US $ 1 million or more. This revealed that 85% of those polled planned to send their children to high schools or colleges abroad, preferably in the US, for completing studies. 157,558 Chinese students are already in the US and another 90,000 students, or 22.4% of the total studying abroad, are in Australia. The trends are being interpreted as suggestive of future political uncertainty.

These factors together with economic reforms have contributed to a revival of neo-Maoist sentiment in recent years. Popularly called ‘Red Revival’, portions of its agenda -- a dominant role for State owned Enterprises, curbs on profligate spending by senior Party cadres, rooting out corruption, and need to reduce widening income gaps -- have elicited the tacit support of many ‘princelings’ and influential senior cadres. Chinese president Hu Jintao’s speech at the Party’s 90th founding anniversary acknowledged the strength of these sentiments and influence of the over thirty million members who joined the Party during the Cultural Revolution and those born between 1960 and 1970. Ousted PB member Bo Xilai represented this thinking, though his ouster does not imply a setback to neo-Maoist sentiments. Growth of this sentiment has been fostered by a strong sense that the Party ‘has lost its way’ and been weakened.

The easing of inflation since early 2012, steady rise in per capita incomes since 1980 and the peoples’ fear of chaos have, however, enabled the CCP to retain the peoples’ confidence.

Chinese president Hu Jintao and premier Wen Jiabao took bold initiatives in the Twelfth Five Year Plan this March to convert China from the world’s major manufacturing nation into a major global consumer and innovative nation. China’s National Bureau of Statistics released data in June 2012, projecting a successful first year of implementation of the Plan.

Despite political setbacks, the CCP leadership is intent on demonstrating its unity and strength and reports confirm that preparations are on track for the 18th Party Congress to be held in Beijing this October. The number of delegates to the 18th Party Congress will total 2,270. The 50 additional delegates will represent ‘industry’ while the others will represent the other 40 sectors. The PLA has selected its representatives. At least 15 provinces have also completed selection of delegates. The inclusion of PBSC member and Security Czar, Zhou Yongkang -- who rumours claimed had been divested of his security portfolio -- among delegates from Xinjiang, confirms that the leadership is united.