Wednesday, March 21, 2012

Ides of March Duel Over Red Princeling Bo Xilai Will Send Ripples Around World

The image of unified leadership carefully projected by Beijing came crashing last Thursday when Bo Xilai, the flamboyant Party secretary for the Chongqing metropolis and aspiring candidate to the Standing Committee of the Politburo, was summarily dismissed.

That reverberations from the fall of this high-profile leader, a red princeling, are felt inside China is normal. But given the power struggle and policy debates that lie behind the dismissal, the impact is likely to be felt by foreign investors and China’s international partners.

Bo Xilai stirred immense emotions, rekindling an ideological bitterness buried since 1978. He was a Janus-faced politician, propelled by his blood lineage, as son of Mao’s associate Bo Yibo. He had a knack for modern communication techniques and a readiness for confrontation that can only have come from his days as a youthful Red Guard.

The event has several ramifications. On the surface, this concludes the Wang Lijun saga. In mid-February, the Chongqing police chief and Bo’s hatchet man was escorted back from the American consulate in Chengdu where he appeared to be seeking asylum. Wang had spearheaded Bo Xilai’s so-called “strike black” campaign against the local mafia, worrying advocates of rule by law in China. Bo had also encouraged campaigns against major backers of corruption and crime elsewhere in China, making him a hero to some, but a threat to his opponents.

Since October 2010, part of the leadership — China’s security czar Zhou Yongkang, propaganda chief Li Changchun and expected successor Xi Jinping — had given their blessing to Bo in Chongqing. It’s no less clear that President Hu Jintao and Prime Minister Wen Jiabao held back support: in fact, during his last public appearance on March 9, Bo pointedly invited Hu to visit Chongqing, something Hu had not done.

Bo compounded his offensive with an ideological campaign for Maoist-era “Red songs,” which spread across China in late 2010, amounting to a rallying cry for nationalist, anti-liberal and “mass line” advocates. There are indications that critics detained in secrecy between December 2010 and July 2011, including cultural activist Ai Weiwei, were threatened with being “buried alive” or with the fate of former President Liu Shaoqi, who died “with the Constitution in his hands,” as reported by Ai Weiwei.

This concretely pits the partisans of a return to political terror against the advocates of a legal path for China.

The conjunction of brutal anti-crime campaigns and a eulogy of Mao’s rule therefore take the Bo case to a political level. He was in charge of an experimental policy in Chongqing — one aimed at attracting capital inland, financing large public investments and resolving one of China’s worst social problems: land grabs and housing shortages for countryside migrants. Most of that was already in place before Bo arrived in Chongqing, although he knew how to wage an intense public relations campaign that mixed leftist advocacy of social policies against China’s inequitable development with invitations to luminaries like Henry Kissinger, who marveled at Chongqing’s hyper-growth.

What irked his colleagues was not the Chongqing model but the blackmail implicit in his anti-crime methods, the bridge between conservatives and populists of all ilks that he provided and, quite simply, the permanent campaign for power at the center.

The sequence of events that triggered his fall is unknown. His onetime lieutenant taking refuge in the Chengdu US consulate chose to surrender himself to Beijing-led security, not Chongqing colleagues. Publicly described as a “traitor” by Hu Jintao, Wang may have tried incriminating Bo Xilai. Or, it’s possible that Bo was hatching a compromise some leaders and proceeding to dump his unsavory lieutenant as a peace offering.

China’s top politics are a balancing act, not a win-win game, played among 25 Politburo members, including nine supreme rulers in the Standing Committee. Bo’s fall and the public echo may have triggered a political landslide.

In recent days, populist and nationalist Web sites appear to have been shut down or impeded. At the other end of the spectrum, the official press has pushed for political reforms, denounced obstacles and the perils inherent in a refusal to reform. Liberal views are heard in more explicit forms, none more so than from Hu Deping, son of deposed liberal leader Hu Yaobang, who champions a turn towards democracy. Prime Minister Wen, in his last speech at the yearly People’s Congress, issued a dark warning against a return to the Cultural Revolution and presented detailed advocacy of reforms.

Bo’s expected departure from the Politburo after his removal from Chongqing is a major move on the chessboard. Although hated by some, he clearly had strong ties to other red princes. In coming months, with an expected succession coinciding with an economic slowdown, China’s collective leadership will worry about destabilization and political infighting. Can reform advocates, not a majority at the top, steer a path that reassures their colleagues against regime change while still ensuring significant political change? This is far from certain.

China’s international partners must wait to see if China is again led by reformers or if a deeper authoritarian strain appears in reaction to this challenge. China’s conservatives represent a mixture of statists and so-called leftists who wish to preserve the vested interests of state-owned enterprises and rent-seeking monopolies addicted to the low-wage, high-subsidy export economy. That requires a repressed national currency and means leaving monetary management to the dollar, which provides an anchor and discipline without need for efficient regulation in China.

Chongqing, the darling of populists and conservatives, relies on public subsidies and wages that remain 50 percent lower than those on the coast. It’s a strategy to extend China’s export machine into the future along with the huge international imbalances.

Reformers represent the rising demands of an urban class with high education, the bevy of internationalized or smaller private firms with high-tech ambitions and the push by consumers to get a better share of the resources. By nature, these reformers want to stop the hemorrhage of resources to foreign currency reserves. They need to create safety nets for the Chinese population, which in turn would end insane levels of savings, reorienting a share toward international investments. Reformers have tried to retool China, with wage bargaining, local elections, energy-saving urbanization and a blossoming of civil society that put popular demands ahead of vested interests.

Ironically Bo and his neoconservative peers were happy to gun the export engine and increase global imbalances year after year, juggling their fatal attraction to joining the global super-class with geopolitical competition. Not all Chinese reformers may be devotees of peace, but they do seek policies that will ultimately reduce international imbalances, enhance international norms and promote a Chinese society where people are equal to bureaucrats.

In the short term, life is easier for indebted Western societies with a Chinese state capitalism that employs cheap labor and export savings abroad. But in the long term, a reformed Chinese state and market represent progress for mankind.

The Bo-Wang Ides of March duel is not enough of a signal about which path will be taken. But it’s in the global interest to follow these developments closely.


By Francois Godement, policy fellow of the European Council on Foreign Relations, is co-author of “The Scramble for Europe.”

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