Jiang Zemin, party boss, indicated in his address to the opening of the Communist congress last Friday that he understood the dangers to the party of further dismantling a Stalinist-era system. But the leadership has little choice.
The region either accelerates reform and completes the transformation to a market-based system, or risks following its counterparts in the former Soviet Union and eastern Europe into the dustbin of history. It might show the tide, but it cannot hold it back.
Wang Shan, author of The Third Eye, a sceptical look at Chinas reforms, warns that dilution of state control of industry threatens one side of a triangle of party support, namely the industrial proletariat: other elements are a managment cadre and the party itself.
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Once state enterprises turn into shareholding enterprises, they will cease to be the main pillars of the Communist party, Wang says. Industrial workers who used to rely completely on the state will be thrown into the marketplace. The symbiotic relationship between the state and industrial workers will be cut off.
That process is already under way. Following the party congress, however, it is set to gather momentum which is certain to place strains on the system. Chinas leaders are in for a rocky ride, but have been attempting to prepare the party and its 58 m illion members - the worlds largest mass political organisation - for the new era.
They have played down ideology, tried to shed an image of corruptibility, promoted modern management techniques and recruited the young and better educated. The party, they tell sceptics, is enjoying something of a grassroots revival in China.
Peoples Daily, the party mouthpiece, reports that over the past five years numbers have grown by 9.925 million people or 20.7 per cent.A further 14.8 million are awaiting admission.
But the fact that the tightly controlled media has made such a fanfare of the rising membership offers an insight into one of the partys chief preoccupations: its waning popularity.
By and large young people are indifferent: Young people are interested in the economy and economic success. I dont think people hate the party or its members, they just have no interest in it.
Making money is what matters and party membership has nothing to do with that, is a typical view and one expressed in Shanghai by a longstanding member.
On the other hand, the party remains an effective avenue for advancement for Chinese interested in a public service career, either in the bureaucracy on in staterun industry.
Cui Zhicheng, president of the students union at prestigious Fudan University in Shanghai, joined the party in 1994.
For him, party membership is an expression of national pride and civic duty: China has developed only under the leadership of the Communist party. Being a member is a chance to serve the people, he says. Asked if he believes in Communism, he says: Of course. But what that means ideologically, he says, is very different from what it meant a generation ago. The massacre of pro-democracy demonstrators in Tiananmen Square in June 1989, which further alienated support, spurred efforts to draw more, particularly young, people into the fold.In Chinas largest city, Shanghai, where 9 per cent of the population are party members compared with a national average of just under 5 per cent, the party has made a point of admitting a high ratio of young adults.
But ironically for the party which has shed its doctrinaire Communist past and is embracing the free market, the leaderships main concern is not antipathy, but ambivalence, especially among a new business class which is fast becoming the most potent force in society.
Active participation in the party is increasingly irrelevant to people in private business.
Corruption continues to tarnish the partys reputation. Mr Jiang has sought to make an anti-corruption campaign a hallmark of his leadership. On the eve of the Congress, the party expelled Chen Xitong, former party secretary for Beijing and the highest ranking official to be stripped of membership in many years. But such examples will not of themselves save the regime in the end.
Its survival will depend on an ability of manage the economy effectively, put its own house in order and allow a process of genuine democratisation. Chinas leaders have entered a risky phase, and one which will be a test of nerve.
James Harding and Tony Walkern Ironically for the party which has shed its doctrinaire Communist past and is embracing the free market, the leaderships main concern is not antipathy, but ambivalence, especially among a new business class which is fast becoming the most potent force in society.