Power games

Bo Bo Black Sheep

The dismissal of a powerful chief sends tremors across
China’s political landscape

The Economist, March 17th, 2012

Beijing.- Official reports were as terse as usual: Bo Xilai, the party chief of the south-western region of Chongqing, had been replaced by a deputy prime minister, Zhang Dejiang. Until recently Mr Bo appeared destined for a job at the pinnacle of power in Beijing. The news, issued without explanation on March 15th, was a stark indication of strife at the highest level of Chinese politics.

It was far from unexpected. Mr Bo’s political prospects had slumped on February 6th, when a deputy mayor and former police chief of Chongqing, Wang Lijun, Mr Bo’s right-hand man in a very public campaign against organised crime, fled to an American consulate and spent a day there. Both American and Chinese officials have kept mum about what happened inside. Mr Wang walked out of the consulate into custody after Chongqing’s mayor, Huang Qifan, had gone in to talk to him. Since then it has been widely thought the real point of the investigation into Mr Wang was to undermine Mr Bo himself.

Since the Tiananmen Square protests in 1989, the Communist Party has been at pains to keep its power struggles under wraps. It was partly the awareness of high-level infighting that emboldened citizens to join the protests that year. The drama in Chongqing suggests the facade of unity may crack, as younger leaders less involved in the struggles of the 1980s compete for top positions. Late this year the party is due to hold its five-yearly congress, at which seven out of the nine members of the ruling Politburo’s standing committee are expected to be replaced. Mr Bo was long reckoned to be a contender for one of those slots.

No longer. A day before his sacking, Wen Jiabao, the prime minister, had rebuked Mr Bo publicly in a way not heard between Politburo members since the 1980s. At a news conference at the end of a ten-day annual session of China’s parliament, the National People’s Congress (NPC), Mr Wen said Chongqing’s leaders should “reflect” on the Wang Lijun case. In China’s guarded political language, that was a stinger.

Mr Wen also gave an unusual hint of his own doubts about political stability. He said that without political reform a “tragedy like the Cultural Revolution” could happen again. This was remarkable: very few of even the most bearish observers of Chinese politics believe that the bloody internecine strife of the 1960s and 1970s is likely in the foreseeable future. Perhaps Mr Wen intended another swipe at Mr Bo, who is much loved by diehard Maoists. They particularly admire his love of state enterprises and of “red songs”.

What Mr Wen means by political reform, however, may be no more than a gradual extension of elections of sorts (no opposition parties allowed), from the village level up to higher tiers of authority. At every level of China, power is almost always in the hands of party secretaries rather than elected leaders. The party has all but abandoned plans, favoured by reformist leaders in the 1980s, to introduce greater democracy within its own senior ranks.

Before dismissing him, the party did allow Mr Bo one last chance to meet the press at the NPC. The charismatic son of one of the party’s early “immortal” revolutionary stalwarts could be trusted, it seemed, to toe the party line even under extreme pressure. Mr Bo said that the Wang Lijun case reflected “negligent supervision” on his part. But he denied having offered to resign or that he was under investigation. Speculation to the contrary will now intensify.

Two other Politburo members have been humiliated and purged since Tiananmen. In 1995 Chen Xitong, who was then Beijing’s party chief, was forced from office and later jailed for corruption. A similar fate befell Chen Liangyu, who was then Shanghai’s party chief, in 2006. The two (unrelated) Chens were also widely thought to have been casualties of power struggles. But neither enjoyed Mr Bo’s near-untouchable status as a “princeling”, nor his national celebrity. Many ordinary Chinese see him as a hero for his campaign against criminal gangs.

Mr Bo is less liked by China’s economic reformers. In interviews with the foreign press this month, a rich Chongqing businessman, now in hiding abroad, accused Mr Bo of using his anti-mafia campaign as a “red terror” tactic to force wealthy private entrepreneurs into ceding their assets to the government. Mr Bo’s successor, Mr Zhang, will need to work hard to reassure private businesses. The good news is that Mr Zhang boasts a degree in economics. The bad news is that it was bestowed by Kim Il Sung University in Pyongyang.

A princeling’s downfall reveals the rottenness at the heart of Chinese politics

The sacking of Bo Xilai

The Economist, March 17th, 2012

Late this year, the world’s two biggest powers will each choose their leaders. The way America does it looks messy and inefficient. China’s bureaucratic method, by contrast, is designed to provide a smooth transition and a continuity of policy. It has long been signalled that this year Xi Jinping will inherit the Communist Party’s leadership from Hu Jintao. But there are many other posts to be filled. Behind closed doors, it is fair to assume that politics in China are no less vicious than in the Rome of Julius Caesar.

The sacking on March 15th of Bo Xilai as party chief of the south-western region of Chongqing provided a rare glimpse inside those doors. The son of Bo Yibo, a leader of the Party’s Long March generation, Mr Bo had seemed destined for the zenith of power in China—the nine-member standing committee of the party’s Politburo. His downfall represents the biggest public rift in China’s leadership for two decades. There are reasons to celebrate it; yet the manner of his going is a sharp reminder of what’s wrong with China’s political system.

The first reason to cheer is that some of Mr Bo’s ideas, and the style of his rule in Chongqing, were disturbing. Two policies made him famous. The first was a popular crackdown on Chongqing’s “mafia”. Many ordinary Chinese welcomed his no-holds-barred approach to going after gangsters, many of whom would have had links with corrupt officials. But there are credible allegations that Mr Bo used his campaign for his own political ends, selectively attacking his opponents. A local businessman, now in hiding abroad, has said he suffered torture and extortion at the hands of Mr Bo’s henchmen.

The other policy was to pay homage to some aspects of Maoism—favouring state enterprises, for example, and reviving “red songs”, including some popular during the Cultural Revolution. The campaign showed breathtaking hypocrisy as well as forgiveness. Mr Bo himself suffered during the Cultural Revolution. But thereafter he resumed the privileged career path of the princeling. This “leftist” sends his children to elite schools in the West. Both “red” and “anti-mafia” campaigns can be seen as part of a power struggle, designed to discredit Wang Yang, his predecessor in Chongqing, and rival for a standing-committee seat. Mr Wang, now party secretary in the southern province of Guangdong, has a reputation as something of a liberal. That he seems to have come out on top in this battle is good news.

Welcome, too, is the little window the affair opens into the corrupt, fratricidal ways of party politics. Mr Bo’s downfall was precipitated by the flight to an American consulate of Wang Lijun, his former police chief and right hand in the anti-mafia drive. Mr Wang is now under investigation in China. Mr Bo, too, may soon find himself answering awkward questions. That Chongqing’s dirty linen was aired in front of American diplomats on his watch may matter more than the dirt itself. But his sacking will not herald a new era in which party and government officials are to account for their actions. Crimes and misdemeanours, like ideology, are merely weapons in a power struggle. Winners can still get away with it.

The day before the sacking, Wen Jiabao, China’s prime minister, had foreshadowed it with a rare public ticking-off for the Chongqing leadership at a press conference. In another presumed dig at Mr Bo, however, Mr Wen said something rather remarkable: that, without political reform China might suffer another tragedy, “like the Cultural Revolution”. This seems preposterous: fast-growing, increasingly plural China is not on the brink of a similar outbreak of party- fanned mass hysteria like the one that gripped China in the late 1960s.

The party is not over

Mr Wen is right, however, to point out that the political system remains basically unaltered. It is still one in which the factional squabbles of a few men in Beijing are fought out across the whole nation. It is still one in which, as recently as 1989, a succession struggle was waged in blood on the streets of Beijing. It is still one in which the Communist Party has only managed one smooth transfer of leadership, its most recent transition in 2002. By comparison, America’s laborious process looks rather attractive.

The National People's Congress

What worries Grandpa Wen

The Economist, March 14th, 2012

Beijing.- Wen Jiabao still has a year left in his ten-year term as prime minister, in which to put the final touches on his legacy. But on Wednesday he performed for the final time one of the job’s most high-profile tasks—the protracted press conference that traditionally follows the close of the annual session of the National People’s Congress (NPC), China’s rubber-stamp parliament.

For a full three hours, Mr Wen sat before hundreds of foreign and domestic reporters gathered in Beijing’s Great Hall of the People, as well as before a live national television audience. In reply to a series of relatively provocative questions, he provided lengthy, detailed and even interesting (if unsurprising) answers, full of numbered bullet points and relevant data. Such topics included: trade friction with America, the appropriate valuation of China’s currency, targets for economic growth, local governments’ debt loads and spending on social welfare.

In response to other sorts of questions, Mr Wen was vaguer but no less interesting. He took several opportunities to highlight the importance of political reform, even warning at one point that disastrous excesses of the sort that tore China apart during the Cultural Revolution “could yet happen again”.

Many observers have become sceptical of Mr Wen’s commitment to political reform. For years he and his closest comrades have trumpeted the importance of reform at every opportunity. Their critics complain that these high-minded declarations might be more convincing if there was any progress to show for Mr Wen’s nine years as head of government. Simply citing his previous remarks doesn’t count.

There are reasons to wonder whether “Grandpa Wen”, as he is called with affection, for his avuncular manner and displays of concern for the common people, has been trying to do better than pay lip service to the cause of reform.

Late in the summer of 2010, he made a series of remarks—in an interview with a foreign journalist and in speeches to Chinese audiences—that made surprisingly bold reference not only to the importance of political reform but also to “some opposition” to reform within the ruling Communist Party. Though Grandpa Wen holds a position near the very top of China’s government, his remarks were treated as if they were so much rambling from a disaffected blogger. They were by and large scrubbed from China’s state-run media.

Politics within the elite are so opaque that it is difficult to know whether the sceptics are right about Mr Wen’s commitment to reform, or whether he is a lonely liberal struggling not to be sidelined. But during his three hours on live television, Mr Wen returned to the subject of political reform several times over, in his characteristic, slow and even diction.

A Singaporean journalist asked him directly about his interest in reform, and about the difficulties he faced in promoting it. Since January, the government’s press handlers had been hard at work polling foreign reporters on what questions they might wish to ask, tweaking their proposals and finally deciding which reporters would be called. (“Press conference” might not be the right term; certainly spontaneity is not the priority.) The Singaporean’s question should not, then, have been anything that Mr Wen did not expect or indeed welcome.

In his response, he warned that the Cultural Revolution’s mistaken thinking has not been eradicated entirely, and that in order to solve its problems China needs more than economic reform alone. “Political reform, especially reform of the Party and the state’s leadership system” is still needed. Failing that, he said, “the results we achieved may be lost”.

He returned to these themes in answers to other questions, calling for the popular elections that are now held at the village level to be pushed further up the political structure. This was once a popular talking point among Chinese leaders, but in recent years it has not been emphasised. Mr Wen however said that if the masses are able to manage their affairs at the village level, they could gradually succeed in doing so at the township level, and then the county level.

Asked about a recent episode in which a senior official in the city government of Chongqing, Wang Lijun, spent a full day at an American consulate in an apparent attempt to seek asylum, Mr Wen took a clear swipe at Mr Wang’s superior. Chongqing’s top leader, Bo Xilai, had been widely regarded as a top candidate for a post on China’s top decision making body, the Politburo’s Standing Committee. Chongqing’s leadership, Mr Wen said, needed to “reflect seriously” and “learn lessons” from the incident.

One of Mr Bo’s well-known initiatives has been a “red culture” campaign that promotes the singing of old Cultural Revolution songs, and a return to some of the ideals of that era. Mr Wen spoke further about the mistakes of the Cultural Revolution in response to the Chongqing situation, leaving little doubt that Mr Bo was one target of his remarks. But his response also veered once more towards the importance of reform generally. Mr Bo may not have been the only target.

As he prepares to leave the ruling Politburo, China’s prime minister warns
parliament of troubles ahead

Satisfy the people

The Economist, March 10th, 2012

Beijing.- China’s prime minister, Wen Jiabao, may be glad he is entering his final year in office. In a two-hour speech on March 5th at the opening of the annual session of China’s parliament, the National People’s Congress (NPC), Mr Wen spoke of “new problems” besetting China’s economy, from high prices to slowing growth. But his problem might lie in convincing citizens that his promised efforts to build a “harmonious” China have made progress.

Mr Wen’s state-of-the-nation address was his penultimate as prime minister, but his last as a member of the ruling Politburo. He and President Hu Jintao will step down after a five-yearly Communist Party congress in the autumn. At next year’s NPC (a rubber-stamp affair that usually lasts about ten days), Mr Wen is expected to hand over to his deputy, Li Keqiang. The presidency will almost certainly be passed to the current vice-president, Xi Jinping. In his speech, Mr Wen reminded almost 3,000 hand-picked delegates that this was his last year, and called for diligent work to “satisfy the people”.

This will be a lot tougher than meeting the lower-than-usual target of 7.5% growth this year that Mr Wen proposed (see article). More than any other prime minister since Zhou Enlai (who held the job for 26 years until his death in 1976), Mr Wen has tried hard to cultivate a man-of-the-people image. At a press conference after his appointment in 2003, Mr Wen boasted that he had visited 1,800 of China’s 2,000-plus counties, and that this had helped him understand people’s lives. “I know what they expect…I will live up to their trust,” he said. Their expectations, however, may have exceeded his capacity.

The rest of the world has marvelled at China’s double-digit growth rates for most of the past decade, and millions of people have become richer. But many grumble that Mr Hu and Mr Wen have made less progress with their pledges to build a “harmonious society” in a way that pays more attention to people’s welfare and the natural environment. The gap between rich and poor has continued to widen. Outbreaks of unrest, many of them the result of land grabs by local-government officials, are increasingly frequent. Migrant workers from the countryside, who fill most blue-collar jobs in urban areas, are usually denied welfare benefits enjoyed by other city-dwellers.

Polls suggest that many ordinary Chinese are feeling uneasy. In January a report by the Capital University of Economics and Business in Beijing found that the city’s “happiness index” had been declining for four years. Worries about income were cited as the main reason for the drop. A survey published in the same month by the Chinese Academy of Social Sciences showed that urban residents felt less confident that they would get richer than they felt about prospects for the economy generally (see chart).

Mr Wen highlighted some achievements. Spending on health care has received a boost since efforts to provide insurance for all were stepped up in 2009. But the World Bank and the Development Research Centre (DRC), a Chinese government think-tank, in a report in February, said that government spending on health, at around 2.5% of GDP, is still lower than average among the upper-middle-income countries with which China is now categorised. In his speech Mr Wen pledged that government spending on education would reach 4% of GDP for the first time (up from around 2.5% in 2003). A budget report submitted to the NPC said that such spending by the central government had risen by 27.5% last year. Mr Wen did not remind his audience, however, that China promised in 1993 it would spend 4% of GDP on education by 2000.

By the end of this year, Mr Wen said, all of rural China would be covered by a government-funded pension scheme that officials began rolling out in 2009. Rural pensioners receive a minimum of 55 yuan ($8.70) a month, which for the poorest families is a welcome boost. Mr Wen said rural incomes last year rose faster than those of urban residents for a second year in a row. They grew by 11.4% in real terms, the fastest rate since 1985. A considerable proportion of rural income comes from migrant labour in the cities. An official plan issued last month calls for increases in the minimum wage of at least 13% a year to 2015.

Such measures could help to narrow wage differences between urban and rural areas (as will a diminishing supply of surplus rural labour). Mr Wen deviated slightly from the wording of last year’s five-year plan, which had called for a “gradual” narrowing of the income gap. He said the government would “quickly” reverse the widening trend and ensure that income distribution is governed by “proper standards”. He did not say how, although growing upward pressure on blue-collar wages will certainly help (see article).

The rich-poor gap is clearly an embarrassment to Mr Wen’s government (as it was to the preceding one). Caixin, a magazine, reported in January that this year the government would again publish no estimate of the Gini coefficient, a measurement of inequality commonly used around the world. The last time such a figure was officially released, it said, was in 2000. The coefficient then was 0.412 (on a scale of 0, where everyone has the same income, to 1, where one person receives all of it). America’s coefficient at that time was very similar at 0.408, but India’s was much lower at 0.32. Some Chinese scholars believe China’s is now higher than 0.5. The World Bank-DRC report says China is among the most unequal countries in Asia.

During the NPC Bo Xilai, the party chief of Chongqing, a region in the south-west, used the issue in an apparent attempt to revive his tarnished image (a political ally of his had fled to the American consulate in Chengdu last month, emerging a day later to be led away by Chinese security officials). Mr Bo pointedly told a group of delegates that it was possible to have fair wealth distribution and fast growth at the same time. Alone among Chinese provincial-level governments, Chongqing has set a target for reducing its Gini coefficient.

Few Chinese pay attention to the NPC’s discussions, despite efforts by official media to enliven coverage with alluring pictures (see top photo). Internet users have been more interested in examining photographs of the wealthiest delegates, some of whom have flaunted their riches by wearing expensive clothing to the meetings. Hurun Report, a company which tracks China’s wealthy, said the net worth of the 70 richest NPC delegates—many of whom are also prominent businesspeople—rose by $11.5 billion in 2011.