By Chris Buckley
BEIJING, April 2 (Reuters) – China’s ruling Communist Party
is grappling with a leadership transition while also trying to
deal with economic uncertainty and outbursts of unrest, but for
now economic growth and firm controls are likely to avert
serious ructions.
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SUCCESSION POLITICS
Chinese President Hu Jintao and Premier Wen Jiabao are due
to give up their main Communist Party posts in late 2012 and
their state posts in early 2013, making way for a new leadership
generation likely to be led by current the Vice President Xi
Jinping, who is virtually certain to replace Hu.
Most other members of the nine-member Standing Committee —
the Party’s decision-making core — are likely to retire in late
2012 as well.
The politics of determining who will fill those vacancies is
increasingly preoccupying decision-makers, slowing policy-making
and deterring the government from taking contentious decisions.
Chinese elite politics has been largely bound by the norms
of conformity and unity around a leader, and competition among
these contenders is unlikely to break out into open feuding or
trigger major policy shifts.
Those norms have been strained recently by the ousting of Bo
Xilai, a possible contender for a place in the Standing
Committee until his dismissal from party secretaryship of
Chongqing in southwest China.
Bo’s downfall was triggered by a mysterious incident in early
February, when Wang Lijun, formerly a long-time police chief
under Bo, spent a night in a U.S. consulate and then left, taken
away for an investigation by central officials.
The details of what happened remain unclear. But Bo’s
prospects for surviving in power look bleak, and his departure
has been accompanied by signs of friction within the party
leadership.
Bo’s case and the potential for further dispute over his
fate could unsettle preparations for the 18th Party Congress
later this year, when the leadership succession will take place.
However, the growing public prominence of Vice President Xi
and Vice Premier Li Keqiang indicates they are increasingly sure
of succeeding President Hu and Premier Wen respectively.
Xi visited the White House in February, enhancing his
credentials for the top job.
One key issue will be whether Hu will remain chairman of the
Central Military Commission, which controls the People’s
Liberation Army. Staying on would give him more sway over his
successors.
What to watch:
– Which emerging leaders make substantive policy statements
and announcements. That can be a signal of their prospects and
likely areas of authority.
– Signs of political and ideological rivalry among aspiring
leaders, and especially developments around Bo Xilai. Rivalry is
likely to remain constrained, but serious economic problems,
political scandals or external shocks could heat up the
competition.
SOCIAL UNREST – INFLATION, ETHNIC UNREST
The Chinese government fears that social unrest could
escalate into broader protests and threaten its authority.
That was exacerbated in 2011 by the worry of contagion from
uprisings across the Middle East and North Africa, and the
general security tightening is likely to persist.
The most widespread sources of rancour are land
confiscations and home demolitions for development, persistent
prices rises and corruption.
Inflation and the slowing pace of economic expansion are
also concerns. Some analysts think growth in the first quarter
of 2012 will be under the 8 percent seen as sufficient for job
creation.
Annual inflation rebounded to 4.5 percent in January,
breaking a five-month softening trend and forcing a market
rethink of policy easing expectations.
Most outbursts of unrest are small and the chances of mass
unrest challenging Party rule soon are scant. But a protest in
Wukan Village in southern China in late 2011 showed that even
these local outbursts can attract widespread attention and test
the ability of officials to defuse discontent.
The far western regions of Tibet and Xinjiang also remain
tense. In Tibet, there has been a string of self-immolations and
protests challenging Chinese religious controls.
The Tibetan unrest is most unlikely to trigger sympathy
protests in Han Chinese areas of the country, but government
forces could face persistent defiance that spills over into
international tensions.
Such pressures encourage a mixture of tough security and
aversion to policy gambles.
What to watch:
– Protests and strikes that, while local, put the government
on edge.
– Flare-ups of ethnic discontent.
– Chinese government efforts to contain sources of protest,
which could also affect companies, especially Internet and
telecoms ones.
DIPLOMACY IN THE MIDDLE EAST
In early February, China joined Russia in vetoing a draft
U.N. resolution aimed at urging Syrian President Bashar al-Assad
to give up power in the wake of deadly attacks on opposition
groups by his troops.
That veto magnified tensions with Western powers and with
major Arab states, including Saudi Arabia, over how to deal with
the bloodshed in Syria. China also faces pressure from the
United States and other Western governments to back stiffer
sanctions against Iran over its disputed nuclear program.
Russia and China have opposed international interference in
Syria and argued that a domestic solution to the bloodshed there
is possible, but Beijing has repeatedly stressed that it wants
to work with the Arab League to find a solution.
Since its vetoes of proposed U.N. resolutions on the crisis,
China has sought to regain influence by forwarding its own plan
to end the bloodshed, and by backing a U.N. Security Council
statement on March 21 voicing support for U.N.-Arab League envoy
Kofi Annan’s bid to end the violence.
The tensions with Arab states are most unlikely to hurt
China’s access to Middle Eastern oil, but Beijing could find its
diplomatic credit in the region weakened.
What to watch:
– What steps China takes to press the Syrian government to
implement a peace place promoted by Annan.
– Whether the United States government decides to use
unilateral sanctions against Chinese companies buying oil from
Iran, or decides that Beijing has done enough to escape
sanctions.
(Editing by Daniel Magnowski)
