2012-03-15

Leadership succession battle in China goes public as Wen slams Bo Xilai on Wednesday; Communist party fires Bo Xilai on Thursday

If you haven't been following the unfolding leadership battle in China, you want to check out a lengthy post from February, Socionomics Watch—The battle for China. It gives background and some details to the fight between different factions within the party. Bo Xilai represents a faction that can/has been described as leftist, Maoist, conservative, Marxist. Wen Jiabao represents the reform or liberal faction, while there are also the princelings, represented by incoming president Xi Jinping. There are other groups within the party, but ideologically, these are the main players. The battle is between those who want more market forces and political reform (in a democratic direction) versus those who want to preserve Maoism and communism. In between are those focused on maintaining control of the country and the economy. I wrote:
Social mood in China is negative and even political leaders are not immune from it. From a socionomics standpoint, this story also makes sense. The leaders are itching for a fight, or rather have less tolerance for their enemies and more of a willingness to fight by other methods. Many leaders and officials in China do things that are illegal such as taking bribes. These transgressions are overlooked as long as one is competent/successful/useful. If they become a problem, they are arrested and prosecuted for their crimes. High level corruption looks bad in the press, but it achieves the objective.
The Wang Lijun scandal may well be the method used to knock out a political enemy, Bo Xilai, smoothing the way for the pro-business princelings and liberal reformers to assume greater control of the party. Here's the latest news, starting with Wen Jiabao's attack on Maoism and warning of another Cultural Revolution.

Wen attacks party conservatives
“New problems that have cropped up in Chinese society will not be fundamentally resolved and such a historical tragedy as the Cultural Revolution may happen again,” the premier added, in remarks that were broadcast live on national television. “The mistake of the Cultural Revolution and impact of feudalism are yet to be fully eliminated.”

Mr Wen, who will step down from the party’s powerful politburo standing committee later this year, directed his aim at rivals including Bo Xilai.

Premier Wen chides Chongqing
"The current party committee and government of Chongqing must seriously reflect upon and learn lessons from the Wang Lijun incident," Wen said in a raised tone while waving a pen in his hand.

His comments marked a rare departure from past practice in mainland politics. He is the only member of the highest-level Politburo Standing Committee to speak out about the scandal involving Wang, Bo's former right-hand man, who took refuge in the US consulate in Chengdu , Sichuan , on February 6.

Speaking at his last annual press conference as premier, Wen said that an investigation into Wang's case ordered by the central government had made progress, and that the case would be handled strictly in accordance with the law.

"We will give the people the results of the investigation and the handling [of the case], so that it can withstand the test of law and history," he said. The question to Wen about the scandal was raised at the end of the three-hour press event, broadcast live on television, radio and the internet. Although he appeared prepared for the sensitive nature of the issue, he presented a stern look and covered his mouth with his hand when the question was raised.

..."Given the fact that it is such a sensitive issue happening at such a sensitive moment, Wen must have spoken on behalf of the entire leadership," Zhu said. Professor Yuan Weishi , a historian at Guangzhou's Sun Yat-sen University, also noted that it would be unimaginable for Wen, known for his prudence and political tact, to make random comments without seeking consensus within the leadership.

Wen also used his last annual press conference to attack the resurgence of Maoist leftists, in a move widely interpreted by analysts as targeting Bo's ultra-conservative "red culture campaign" over the past four years in Chongqing. In response to a separate question, he specifically mentioned a historical document, the "Resolution on Certain Questions in the History of Our Party", which was adopted in 1981 and is best known for a rare admission that Mao Zedong should be held responsible for the tragedy of the Cultural Revolution.
Wen made these comments yesterday and the follow on results were swift:

Bo Xilai fired in Chinese Communist Party leadership shakeup
In a major shakeup in the Chinese Communist Party’s top ranks, Bo Xilai, the charismatic but controversial official known for promoting a “red revival” campaign, has been fired as party chief in Chongqing, Xinhua news reported Thursday.

Bo is being replaced by a vice premier, Zhang Dejiang, who will also take Bo’s position on the local Chongqing Party Communist branch and its standing committee, Xinhua said.

The report made no mention of whether Bo also lost his position on the Party central committee and Politburo in Beijing.
Bo Xilai is a populist politician who was angling for greater power. (When his anti-triad policies were criticized as abusing the law, he went before law students at a university and asked them, with television cameras rolling, if they supported his policies. They said yes and Bo said this showed the people support his policies.) This may be the story of one man's ambition coming to an end, but it likely has greater political significance.
Unlike most Chinese leaders who prefer to avoid public attention, Bo had built a loyal following and attracted media coverage in his south-central Chinese mega-city. He cultivated a modern-day personality cult among China’s so-called “new Leftists,” who supported his push for a more equitable wealth distribution and his campaign for Mao-era pageantry, including organizing mass events to sing patriotic songs.

“This is certainly very bad news for Bo Xilai, and we’ll hear more in the coming days or weeks,” said Cheng Li, a China scholar and expert on China’s elite politics with the Brookings Institution in Washington. He called the timing of the news “quite remarkable” and said, “There’s a possibility the investigation against him has already started.”

“It’s still the beginning,” Li said. “Potentially, it could lead to a domino effect — what direction, we still do not know.”
Increasingly negative social mood will lead to fallout and wider implications for the scandal and firing.

And with the close of the annual National People's Congress, here's another indicator of social mood: 'No' votes reach a five-year high. Of course the number of no votes is a small percentage of the total votes, but the rising number signals disharmony within the party. The disputes mainly deal with finances and local versus central control:
"The supervision of government expenditure is not satisfactory," Luo said. "The budget report does not give sufficient coverage to social security, and it especially does not support public livelihood projects. That's why I voted No."

Another deputy, Zong Qinghou, also the chairman of the mainland food giant Hangzhou Wahaha Group, said he rejected the budget report because it did not suggest tax concession measures to redistribute wealth.

Other deputies said that, even though they voted in favour of the report, they were concerned with the high level of debt plaguing local governments.

"I think we need to give local governments more autonomy in using their money," said deputy Pan Yixin.

The budget report said national revenue for this year is expected to reach 11.63 trillion yuan (HK$14.2 trillion), of which 5.86 trillion yuan belongs to the central government.

Local administration officials have long complained that even though the central government holds such a large amount of income, most public services are paid for by local governments.

He Keng, vice-chairman of the NPC's Finance and Economic Committee, expects more `No' votes next year if reforms of the financial have not been implemented.
Expect more dissent and more confrontations between party leaders as the October leadership succession draws near. Property prices remain weak (Wen Jiabao causes a major sell-off in property shares yesterday when he said prices are still have a long way to fall), the stock market is weak and the yuan itself is now under pressure.

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