Friday, October 07, 2005

China's wealth gap reaching critical level

Reuters report with inputs from my interview.

1 comment:

simin said...

a related article on straittimes, it's unaccessible for non-members, so i will just post the whole article here.

Oct 8, 2005
A chance for Hu to stamp personal mark

Chinese leader to preside over party meeting to endorse blueprint for country
By Chua Chin Hon
China Bureau Chief

BEIJING - CHINESE President Hu Jintao will seek to put his personal stamp on the country's political and economic future when he presides over a key Communist Party meeting today.

The secretive four-day meeting in western Beijing will see the party's 354-member Central Committee endorse a new five-year economic blueprint that will champion his vision of a more equitable society and balanced economic growth.

Since coming into power in late 2002, Mr Hu, together with Premier Wen Jiabao, has been gradually shifting China's policy priorities away from the single-minded pursuit of GDP growth at the expense of the environment and social harmony.

This new thinking, encapsulated in two of the most often heard political slogans of 'adopting a scientific concept of development' and 'build a harmonious society', comes as the fissures between rich and poor, coastal and hinterland regions grow ever wider from two decades of breakneck and often uneven economic growth.

'Economic glory doesn't necessarily promise social stability,' the official Xinhua news agency said Thursday.

'This focus shift is timely as China is confronted with increasingly acute potential social unrest caused by disparity in development and distribution, inequality, injustice and corruption despite rapid economic progress.'

The new blueprint, expected to be announced at the end of the meeting next Tuesday, will not spell out policy details. Instead, it will set out broad priorities that will guide policy making on issues like taxation.

The economic policies of the Hu-Wen coalition has not always gone unchallenged among the top Chinese leadership. Mr Hu himself has no formal economic expertise.

But analysts expect little disagreement with the Chinese President's new economic vision given the growing number of warning signs, such as the rising number of protests and widening wealth gap.

What will be more contentious at the meeting - formally called the fifth plenary session of the 16th Central Committee of the Communist Party of China, or the Fifth Plenum for short - is whether Mr Hu can pull off a series of widely rumoured personnel changes at the top that would consolidate his grip on power.

It was at the Fourth Plenum last September that Mr Hu finally took over all of the top party, government, and military posts after his predecessor Jiang Zemin relinquished his last official post as the chairman of the powerful Central Military Commission.

Speculation is rife that Mr Hu will promote one of his key allies Li Keqiang, Liaoning's party boss and a prominent member of the Chinese President's power base, the Communist Youth League - effectively making him the front runner for the post of the next top Chinese leader.

Leadership succession is an issue never discussed publicly in China. But other possible candidates political watchers have routinely identified for the top leadership slot include Jiangsu party boss Li Yuanchao and Zhejiang's top leader Xi Jinping.

Political analysts and diplomats are divided on whether Mr Hu will make such a move ahead of the planned leadership reshuffle in 2007 - when several top Chinese leaders are expected to make way for a younger generation - given his reputation for being cautious.

But if he does, the move will make Mr Li 'first among equals' in the race to be the next Chinese supremo, said Professor Li Cheng of the Brookings Institution in Washington DC.

Mr Li is widely tipped to replace Mr Wang Gang as the new director of the party's General Office, which handles classified documents and manages the sensitive logistical and administrative affairs of the top Chinese leadership.

Mr Wen and Vice-President Zeng Qinghong have both served as directors of the General Office in the past as well.

Mr Wang, 63, is not due for retirement but is considered a holdover from former president Jiang's era.

'Recent turnover among Wang's subordinates in the General Office suggests that a shakeup may be in the offing,' Associate Professor Lyman Miller of the Hoover Institution at Stanford University wrote in a recent report, adding that the department may be 'the object of a slow and cautious takeover' by Mr Hu.

But even if Mr Li is successfully promoted to the central party apparatus, it is by no means a guarantee of his political future, analysts said.

Prof Li told The Straits Times: 'Li Keqiang still needs to be tested...It's way too early to say whether he can survive.

'It's precisely for this reason that he should be tested for two more years, instead of just five years.'

Media reports last month also suggested that Mr Hu planned to replace Shanghai's top leader Chen Liangyu with another of his allies. But sources said this is highly unlikely at this year's meeting.

Said one source: 'Hu can pull that off if he really wants to, but at what cost?'


Key issues

Transparency and accountability
The party has made it a priority to increase checks and balances on the power of officials and to curb corruption - one of the biggest sources of public discontent in China - as a means of strengthening its ability to rule.

Rich-poor gap
With rural incomes averaging less than a third of urban incomes, China has been paying increasing attention to the gap between rich and poor, seen as a major source of instability.

More than 74,000 protests erupted across China last year alone, sparked by perceived abuses of power, disputes over land rights and the widening gap between rich and poor.

economic growth China has been shifting economic policy away from pursuit of all-out growth in favour of a more sustainable model that aims to avoid large fluctuations in the economy while taking into account environmental protection and social services like health care.

Resource conservation
China, which is increasingly concerned about securing supplies of oil and other raw materials, is expected to emphasise conservation by adopting policies which could include new taxes on vehicles and fuel. -- REUTERS