Crisis might be too strong a word, but it is not an exaggeration to say that China is going through its most uncertain and most tense period since the Tiananmen crisis of June 1989. The Bo Xilai episode continues to feed the rumour mill in Beijing and is keeping China watchers busy on analyses that mix the most tantalising ingredients of roman noir with the most intriguing aspects of the best political fiction novels. Above all, this episode comes at a critical moment in China, and it highlights three major new issues or challenges that the leadership is struggling to confront.
Whatever the solidity of the accusations against Bo Xilai and his wife, the campaign against – and the elimination of – the former Communist Party chief of Chongqing, who was slated to become one of the nine members of China’s Politburo standing committee, illustrates the serious tensions and divisions among the core leadership group coming to the fore in Beijing as it enters the acute phase before the once-in-a-decade leadership change due next fall. With his advocacy of a return to some sort of Maoist-era “purity”, his well-publicised campaign against criminals, and his populist streak, Bo Xilai had made too many enemies. He overplayed his hand in what was supposed to be a smooth political transition, highlighting the unity and cohesion of the power structure. Although the nominations of Xi Jinping as the successor to Hu Jintao, as head of state and of the party, and of Li Keqiang as the successor to Premier Wen Jiabao are assured, the picture is more fluid when it comes to a number of major appointments to be made at the top of the leadership structure.
The second issue the Bo Xilai episode has brought to the fore is that it confirms to the Chinese people their worst assumptions about the inextricable collusion between power and money at all the levels of the power apparatus. It is this collusion, the abuses of power and position, the endless examples of corruption – small and big – and the perception of inequity that feed the growing public resentment and frustration. The Chinese leadership is fully aware that this growing resentment, along with the deep erosion of public trust in it, might be the most important threat to its hold on power. At the same time, whatever the official admonition and warning about corruption and abuses of power and the occasional harsh sanctions against mid-level officials, the regime does not know how to deal with this issue. This is because these practices are now deeply embedded in the power structure. The official line has tried to turn the tables by presenting the Bo Xilai episode as an example of the party striking hard against corrupt practices and abuses of power. The problem is that this episode is all over the blogosphere in China — and nobody believes the official version. The public perception of the whole thing is one of settling of scores among top leaders fighting for turf.
Which leads to the third major issue the Bo Xilai affair highlights. This is the first time since the creation of the People’s Republic that a purge inside the party is developing under the glare of the internet and new media, with hundreds of thousands of people expressing their views — quite often sceptical of the official version. Despite the very sophisticated system in place to monitor and censor the traffic among China’s 500 million internet users, the Bo Xilai affair is developing “online”, with Chinese netizens using all kinds of tricks to defeat the vigilance of the censors. This is one of the government’s worst nightmares coming true as it challenges its monopoly on the message; and the response cannot simply be to clamp down on the internet, which is a key driver in China’s quest for knowledge-based, IT-driven sustainable growth.
What makes the Bo Xilai affair even more tricky for Beijing is the fact that the present Chinese leadership – and the one that will succeed it before the end of the year – is confronted with the do-or-die challenge of transforming the country’s growth model. What has been so successful in achieving the spectacular metamorphosis of China from a backward country into the fastest-growing, and the second-largest, economy of the world is coming to an end. The leaders in Beijing have realised that it is no longer possible to sustain the over-reliance on investment, capital and resources-intensive activities, export-led growth, the depletion of natural resources as well as the deterioration of the environment. However, while they know what needs to be done to move towards a more domestic consumption-led growth, higher value-added, and lower-carbon economy, they also realise the tremendous difficulties involved. The drastic policy changes required pitting many vested interests against the government in Beijing. This long-haul transformation of China’s economy is fraught with difficulties and will devour the energies of the leadership over the next decade — as it must be achieved while maintaining growth high enough to meet people’s expectations and maintain social stability.
These elements of uncertainty and flux have converged to create something unprecedented in China’s recent history — nervousness and tension. The last ten years, the Hu Jintao era, were synonymous with political immobility. The new leadership will presumably not be able to seek stability through continuing such immobility. The question is: what will this more uncertain China mean for the rest of the world?
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The author is President of Smadja & Smadja, a strategic advisory firm