“China must reform or risk crisis, experts warn new leader”

Via Chris Buckley, another piece describing some of the advice Xi Jinping is receiving in the last days before he ascends to power:

“China’s economic and social contradictions seem to be nearing a threshold,” prominent Chinese economist Wu Jinglian said in a recent interview with Caijing business magazine.

Advocates of reform are pressing Xi to cut back the privileges of state-owned firms, make it easier for rural migrants to settle permanently in cities, fix a fiscal system that encourages local governments to live off land expropriations and, above all, tether the powers of a state that they say risks suffocating growth and fanning discontent.

Most party-linked proponents said in interviews with Reuters that political reform must start at the grassroots and be incremental; they called outright democracy a distant or unrealistic idea.

“You can’t solve all of these problems in a decade, but you can address the reforms urgently needed by ordinary people and show that you’re heading in the right direction,” said Deng Yuwen, an editor at the Study Times, a newspaper published by the Central Party School which trains rising officials.

The party’s recent unity behind a decision to punish disgraced politician Bo Xilai has kindled hopes among some that Xi can build similar accord for bolder reforms.

Xi is aware of the calls, said experts and party insiders. But heeding them will require him to take on economic and political blocs with a powerful hold over policy.

“Does the new leadership recognize that they’re reaching a key inflection point in their economic and political path? I think the answer is yes. But the other question is: Do they have the courage to act boldly on those problems,” said Christopher Johnson, a specialist on China at the Center for Strategic and International Studies in Washington D.C.

“Before each congress, there’s always a debate, but it feels sharper this time,” said Zhang Jianjing, editor of “China Reform” magazine, which has advocated pro-market policies and using the law to curb state power.

“There’s a deeper sense of anxiety now that goes beyond specific issues. There is a widespread sense of foreboding,” said Zhang, a journalist who has followed four party congresses.

But recently, Xi hinted that he understands the calls for him to take a bolder path, even if he wants to also put to rest any expectations he will seek a radical change.

In a talk with Hu Deping, son of the late reformist leader Hu Yaobang, Xi said he favored steady reform.

Signs the party leadership wants to trim the Politburo Standing Committee – the core of party power – from nine to seven members also appear to reflect a desire for more agile policy-setting.

Yet even if Xi wins a leadership lineup sympathetic to a bolder agenda, he faces the obstacle of pushing changes past powerful state sectors and state-owned conglomerates that have enjoyed privileged access to credit and opportunities.

He might also have to accommodate two retired leaders, Hu and his predecessor Jiang Zemin, who are likely to demand a say in big policy changes. That could make for unwieldy compromises bogging down change, said some advocates of reform.

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Filed under 2012 power transfer, political reform, Xi Jinping

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