Showing posts with label Chinese Communist Party. Show all posts
Showing posts with label Chinese Communist Party. Show all posts

3.20.2011

China’s 12th Five-Year-Plan – Will It Help With the Global Trade Imbalance?

Amongst all the political upheaval in the Middle East and North Africa, with people rising against dictatorial regimes in Tunisia, Egypt, Libya, Yemen and elsewhere, this week China embarked on its annual legislative session.  The legislative session of the National People’s Congress, which officially enacts legislation, will rubber-stamp the government’s 12th Five-Year-Plan (2011-2015), which was decided at the Communist Party meeting in October, 2010.

Details won’t be made public until the conclusion of the legislative session (which usually lasts 10-14 days), but some elements of China’s next five-year economic plan have been made public.  The three elements worth highlighting are a lower growth rate and a more balanced/sustainable economic model, meaningful reductions of pollution through better energy conservation, and a more aggressive fight against inflation.

A New Growth Model:

  • Set a GDP growth target of 7% (down from the current actual GDP growth rate of 10%).  To do that, the government will have to divert money away from construction and corporate subsidies, and instead use public funds to increase household incomes.
  • Cut import tariffs to reduce input-costs, while boosting consumer demand and reducing China’s reliance for growth on exports which generates trade surpluses and contributes to the global trade imbalance.
  • Improve the income of farmers and migrant workers, who have benefited the least from China’s phenomenal economic growth, by increasing minimum wages.  In particular, provinces across China have announced a string of double-digit wage increases this year as part of the government desire to increase incomes among the rural regions and migrant workers in the cities.
  • Increase spending on health-care and full nationwide social welfare insurance to reduce the need for “precautionary savings” and encourage more Chinese consumer spending.
  • Raise the minimum threshold for personal income tax.  This could exempt hundreds of millions of people from having to pay taxes, and boost household spending.

New Energy Priorities:

  • Introduce targets for energy efficiency and consumption that will push China’s energy consumption from non-fossil fuel sources to 12% by 2015.  Key sectors expected to benefit include: hydro and nuclear power, power grid technology.
  • In particular, there will be significant growth in nuclear power (from 10 GW to 40 GW), 63 GW of new hydroelectric power, 48 GW of wind capacity and 5 GW of solar power.  Unfortunately, coal generation will continue to provide 260 GW, although its share of China’s energy mix is expected to fall from 72% to 63%.
  • Double the share of natural gas in Chinese energy consumption to 8% by 2015, up from 4% that it was last year.  This will make China a natural buyer of large quantities of Russian gas, and an inevitable competitor to Europe, which already relies heavily on gas from Russia.
  • Introduce taxes of up to $820 (up from just $100) on vehicles with larger than 2 liters (energy inefficient) engines.
  • Introduce a tax linked to carbon emissions, first via pilot programs in special regions and industries.

Fighting Inflation:

  • The most important short-term priority for the government is to address increases in food price, which Beijing intends to do through price controls.
  • In order to control inflation, the government intends to keep using the tools and methods that it has been employing thus far: manage liquidity, use price controls, curb real-estate speculation, and “adjust and improve” property tax policies.  Furthermore, the budget for this year shows a 35% increase in spending on low-income housing.
  • However, no specific lending targets for banks have been outlined by the government yet.  New loans topped a 7.5 trillion RMB ($1.1 trillion) ceiling last year and excessive bank lending is considered by some to be a contributing factor to China’s inflation.

Analyst are already predicting that this Five-Year-Plan will be the most significant in China’s modern history, marking the moment that China finally decided to abandon its fast export-led growth strategy in favor for a more sustainable growth model.  However, this new effort by China to rebalance its economy in not addressing the root cause of its monetary problem (inflation), and will not facilitate the rebalancing of global trade, which has been so critical to the overall world recovery.

The root cause of China’s inflation is its weak-currency policy, which is feeding an artificially large trade surplus.  This policy hurts both China by producing an overheated, inflation-prone economy, and the rest of the world by increasing unemployment in many other countries.

Theoretically, inflation is the market’s way of undoing currency manipulation.  According to Paul Krugman, China has been using a weak currency to keep its wages and prices low in dollar terms; market forces have responded by pushing those wages and prices up, eroding that artificial competitive advantage.

China’s leaders are trying to prevent this outcome, to protect exporters’ interest, and because inflation is even more unpopular in China than it is elsewhere.  Don’t forget that it was inflation that fueled public discontent with the government, bore the 1989 protests in Tiananmen Square.

China is already hurting its citizens through financial controls.  For example, interest rates on bank deposits are limited to just 2.75 percent, which is below the official inflation rate of 4.9%.  Rapidly rising prices, even if matched by wage increases, are making the situation much worse for Chinese consumers.

Unfortunately, Beijing is not willing to deal with the root cause and let the RMB rise.  Instead, they are trying to control inflation by raising interest rates and restricting credit.  This is destructive for China, because credit limits are proving hard to enforce and are being further undermined by inflows of hot money from abroad.  With efforts to cool the economy falling short, China has been trying to limit inflation with price controls, which also rarely work.

Furthermore, this is destructive from a global point of view as well: with much of the world economy still depressed, the last thing the world needs is major players pursuing tight-money policies.  The solution to China’s monetary problem (and to the global recovery) is to let the currency rise!

But, any rebalancing efforts will face serious opposition from special interests domestically, primarily the State Owned Enterprises and regional and local officials.  The SOE’s benefit from lax environmental regulations, cheep energy and government subsidies, and an overall export led growth strategy.  On the other hand, local officials are not always willing to change, have old ideas about growth and tend to favor pet projects that need massive investments.  Couple that with China’s one-party state that refuses to do anything that looks like giving in to U.S. demands, and you have a recipe for certain continuation of the status-quo.

The focus of the new Five-Year-Plan is promising, but its success is questionable.

Very interesting...

Posted via email from China Wakes || Posterous

3.05.2011

FT.com || FT Magazine - Who will be China’s next leaders?

China's Politburo Standing Committee in 2007
Vice-premier Li Keqiang (second from left) and vice-president Xi Jinping (second from right) on their accession to the Politburo Standing Committee in 2007, a key step in their rise to the top. Other members include current premier Wen Jiabao and current president Hu Jintao (fourth and fifth from left respectively)

The streets at the centre of Beijing are eerily quiet over the week-long Chinese New Year holiday, which fell in early February this year, but outside one old house a few blocks from the Forbidden City, a steady stream of cars pulled up.

The holiday is a time to pay respects to family elders and mentors. I know people in their forties and fifties who still visit their -favourite school teacher over the break and among the upper -echelons of the Chinese Communist party, respected older comrades are given their due. The flurry of activity was outside the family home of Hu Yaobang, the former leader of the Chinese -Communist party who died in 1989. Among the dutiful visitors were Xi Jinping, the man slated to be the next president of China, and Li Keqiang, the likely next premier.

Calling on the widow of a former leader might seem run-of-the-mill, but Hu Yaobang is far from a run-of-the-mill figure in Communist party history. During the 1980s, the party split over whether its economic reforms should be combined with political opening. After pushing a liberal line, Hu was dramatically ousted from office in 1987 by more conservative members of the leadership. It was news of his death in April 1989, by then a broken man, that sparked the Tiananmen Square protests. In official celebrations of the party’s history, his name is never mentioned. Along with Zhao Ziyang, the leader who succeeded him and who was then purged after Tiananmen, Hu was China’s Gorbachev.

Next year, China will start a leadership transition, which will give the country a new president in place of Hu Jintao, who is also the head of the party and the military, and a new premier to replace Wen Jiabao, who runs the day-to-day business of the government. In 2007, a key party meeting in effect chose the next leadership team, when Xi -Jinping (pronounced Shee Jin-ping) and Li Keqiang (pronounced Lee Ke-chiang) were both promoted to the country’s top body, the nine-man Politburo Standing Committee. Xi, now aged 57, became vice--president and 55-year-old Li one of four vice-premiers (the most senior, with responsibility for the economy, climate change, health and the environment), giving both five years to play understudy to their bosses.

Crowds gather at a shrine to Hu Yaobang at Tiananmen Square in 1989
Tiananmen Square, 1989: shrine to reformer Hu Yaobang, whose death sparked the protests

The names of the next leaders may already be pencilled in, but the easiest way for them to sabotage their promotion would be to start ­discussing bold ideas now. Instead, they have to spend five years in a form of political purdah, going out of their way to avoid controversial topics. As a result, little is known of their views about many of the big issues that China faces – how to keep the economic boom going, how to manage ties with the US and, perhaps most important of all, whether the Communist party should maintain its iron grip on the country’s political system. Politics in China is often expressed through coded gestures, rather than bold statements, which makes their visits to the family home of Hu Yaobang so symbolic. Were China’s next leaders behaving as dutiful party members, paying respect to a senior comrade in a system that values displays of loyalty, or are they secret liberal sympathisers who are waiting for the right moment to restart the debate about political reform that died in Tiananmen?

There is always an element of wishful thinking to such discussions. For the past two decades, -western observers and governments have projected these questions on to leadership changes, in the hope of finding the new Chinese Gorbachev figure, one who has yet to appear. Yet this is not just a change in leadership but a shift in generations. The stolid engineers who dominate senior positions in China today will be replaced by a group who -studied law, economics and, in a few cases, journalism, and who came of age during the 1980s, a time when China was assailed by western ideas and influences after the intellectual deep freeze of the Mao years. It will be a new era.

. . .

Xi Jinping
Xi Jinping Age: 57, current position: vice-president

At 6ft 1in and barrel-chested, Xi towers over most of his fellow Chinese. He has an avuncular manner and is good at the sort of glad-handing that is important for political networking, the Communist party version of a good bloke. Among senior party members this makes him more personally popular than Hu Jintao, a dour figure who has cultivated an almost anti-cult of personality. “He is comfortable in his own skin,” as one western politician who has spent a lot of time with him puts it.

A self-confessed fan of American movies with a daughter enrolled at Harvard, Xi is married to a popular folk singer, which will bring a touch of glamour to the post. Peng Liyuan, who also holds the rank of major-general in the army’s song and dance troupe, used to be a regular on the huge television spectacle that airs every year on the eve of the New Year holiday. Her most famous song, “Mount Everest”, has lines such as: “You are warming the Motherland with fresh breezes.”

Ever since he was a young official in the provinces in the mid-1980s, when he created a theme park based on the Chinese fable, Journey to the West, Xi has energetically supported reforms to open up the economy. But it is his family history that brings Xi to the house of Hu Yaobang every year – a -history that raises a lot of questions about his real political beliefs. Xi is one of the nearest things there is to aristocracy in China. His father, Xi Zhongxun, was a communist guerrilla leader in the 1930s and played an important role in the later stages of the Long March, the central event in the civil war. In the 1950s he became a powerful figure in Mao’s China as the youngest vice-premier.

Yet the Xi family soon confronted the worst aspects of Mao’s capriciousness. Xi’s father was purged in the early 1960s, the victim of one of the endless power struggles, and suffered even more during the Cultural Revolution, which started later in the decade, when he was tortured and imprisoned. Xi Jinping was sent at the age of 15 to work as a farmer in a village in the north of the country and remained there for six years, according to his official biography.

When Deng Xiaoping took control after the death of Mao, Xi Zhongxun was rehabilitated, along with tens of thousands of other comrades. (The official who organised the rehabilitation drive was Hu Yaobang, then the head of the party’s organisation department.) From there, Xi became one of the key members of the pro-reform faction during the fierce political debates of the 1980s. As party secretary in Guangdong province in the south, he was one of the fathers of the special economic zone in Shenzhen, the city near Hong Kong that became the symbol of China’s economic take-off. He sided with Hu Yaobang when the leader was forced out in 1987, and after he publicly opposed the military crackdown in Tiananmen Square in 1989, he was pushed into semi-retirement.

“The tantalising thing about Xi Jinping is that here is a guy who really suffered during the Cultural Revolution, much more than most, and whose father actually condemned the killings in Tiananmen,” says a professor at a university in ­Beijing who knows the family. “That, to say the least, is an interesting biography.”

Li Datong, a liberal journalist, says there may have been other indications of possible liberal sympathies. On the death in 2005 of Zhao Ziyang, the pro-reform leader purged after Tiananmen and who spent the rest of his life under house arrest, the Xi family sent a wreath to the funeral. “That could be a hint that Xi has some respect for Zhao,” says Li. “But we cannot be sure. There are no documents connecting him to Hu Yaobang or Zhao Ziyang, no substantial evidence of a political inheritance. In this system, everyone is acting, everyone is fake, so we cannot really tell.”

Xi Zhongxun
China’s likely next president is the son of Xi Zhongxun, a key member of the pro-reform faction of the 1980s

Indeed, there is also another reading of Xi’s climb up the ranks that marks him as a very conservative figure, a careerist who has hugged close to the party’s orthodoxies. In the words of a vividly written US diplomatic cable released by WikiLeaks and based on conversations with a close family friend, Xi decided at an early age to get on by “becoming redder than red”. As the cable points out, Xi actually joined the Communist party while his father was still in prison for falling foul of Mao.

Again, it is his background that holds the key. In the 1950s China of Xi’s birth Mao was trying to forge a classless society, but in the Beijing compounds where the families of senior officials lived, there was a highly stratified sense of status – the schools you went to, the shops you could visit and the car your family drove all depended on your exact -position in the bureaucratic hierarchy.

It is an environment that appears to have inculcated in Xi a sense of being a member of a narrow elite whose duty and right it is to rule the country. After the trauma of the Cultural Revolution when, as the WikiLeaks cable describes, many of his peers found relief in drink, sex and debates about the west, Xi started plotting a path to the top of the political system. Using his father’s contacts, he became the mishu, or personal assistant, to defence minister Geng Biao and wore army uniform to the office every day. Sensing that resentment of his connections might block his career if he stayed in Beijing, he took the unusual step of opting to work in the provinces, starting first as an official in a rural backwater in central China, and ending up as the party boss of the booming east coast province of Zhejiang and then briefly in Shanghai, before being promoted to his current post.

The ambition was evident from an early date. Before he married Peng Liyuan in 1987, Xi was first married to Ke Xiaoming, the daughter of China’s ambassador to the UK in the late 1970s. According to two people who know the family, their often difficult relationship came to a head when she insisted on moving to London to study. Xi is said to have replied that one day he wanted to be a member of the Politburo Standing Committee and that meant there was no way he could live in the west.

One of his university degrees is in Marxist -theories and he is still comfortable spouting the sort of ideological platitudes that remain at the heart of the party’s liturgy, but which are now alien to most Chinese. An article he published last autumn in Qiushi, the party’s main theoretical journal, was entitled: “Study the Theoretical System of Socialism with Chinese Characteristics and Master the Marxist Stand, Viewpoint and Method”.

As his succession approaches, he appears to be trying to consolidate support among the old party families and in the military – elements of the system most attached to the status quo. In the past, talk of a “princeling faction” among the children of revolutionary leaders was often exaggerated because it ignored the intense rivalries within this group. In the early 2000s, Xi’s rise was temporarily stymied by Bo Yibo, another revolutionary hero close to Deng who wanted to push the claims of his own son, Bo Xilai, now the party boss of the central Chinese city of Chongqing. But with his position now stronger, Xi has been laying to rest some of these rivalries and building a base among the princelings. At the end of last year, he visited Chongqing and offered strong support for Bo’s controversial campaign against corruption, which has won him broad popular support but appalled liberals after he had the lawyer of an alleged gangster imprisoned. Bo has also encouraged the public singing of revolutionary songs and has sent out millions of “red” text messages with Maoist slogans – a nostalgic appeal to an era many Chinese see as less corrupt. Xi applauded the propaganda drive, saying that “these activities have gone deeply into the hearts of the people and are worthy of praise”.

During his stints as an official in the provinces, Xi made a point of remaining close to senior officers and over the past few years he has been strengthening his contacts in the military. His wife is also very popular with rank-and-file soldiers, which enhances his prestige. How these close ties will impact on his leadership, however, is harder to judge. Over the past year, there has been an increase in hard-line rhetoric from sections of the military, which appears to have influenced the tougher foreign policy positions China has taken. Some analysts believe this reflects the fact that President Hu, who had little military experience before taking office, is less able than his predecessors to rein in the military. With his good personal contacts, Xi might find it easier to impose his authority on the armed forces, yet the same background could also make him more willing to channel their nationalist instincts. In one of his few unguarded moments since 2007, he ranted at a dinner in Mexico City that “there are a few foreigners, with full bellies, who have nothing better to do than try to point fingers at our country”.

. . .

Li Keqiang
Li Keqiang Age: 55, current position: vice-premier

Beijingers like political gossip as much as residents of the next capital city, yet little is known about the private lives of China’s leaders. They are literally walled off from the rest of society, operating from the large Zhongnanhai compound just west of the Forbidden City, which accommodates both government and party offices. Mao Zedong lived inside the compound in rooms next to the swimming pool and it boasts several modest flats and houses, although these days the leaders are believed to actually live elsewhere in the city, in part because of the security risk of having them all in one place. Although Wen Jiabao has gone out of his way to craft a particular political persona, the family life of the leaders is off-limits – there are no photos of Michelle-and-Barack-style date nights around town. Given the considerable fortunes that the family members of some leaders have amassed, this is more than just a tactic to maintain a little bit of mystery.

The distance that the leaders keep means that there is little concrete information about how Xi Jinping and Li Keqiang get on. But what can be said is that, within the range of the sort of people who prosper in the Communist party, it would be hard to find two men less alike in background or personality. For Li Keqiang, the speculation about his political views is rooted in his university years. The son of a low-level official from the poor, rural province of Anhui, he was also sent to work – for four years – as a farmer during the Cultural Revolution. During that time, China’s universities only admitted those with a suitable proletarian class background, but in 1977, the competitive entrance exam was restored. A total of 11.6 million people applied. Li was one of 401,000 to win a place, making him a member of the famous “Class of 1982”.

When he arrived at the law department at Peking University, the country’s most prestigious and -liberal university, the campus was becoming a hotbed of discussion about long-banned western political ideas, China’s equivalent of -glasnost. Li studied under Gong Xiangrui, a professor who had studied in the UK and who gave a popular class on constitutional democracy. Along with several other students, he helped to translate The Due Process of Law by Lord Denning, the -campaigning British jurist known as “the people’s judge”.

In this heady intellectual atmosphere, he was an active participant in the many debates with fellow classmates, some of whom became leading figures in political dissident circles. They included Wang Juntao, who was jailed for five years for his role as one of the “black hands” in the Tiananmen Square protests and now lives in exile in the US, and Yuan Zhiming, one of the main writers of the 1988 television series River Elegy, a polemical attack on the ills of Chinese civilisation, which was a big influence on the 1989 protests.

Despite strong opposition from conservative elements in the party, the Peking University campus started to experiment with elections for posts in the different student bodies. According to Cheng Li, an expert on Chinese leadership politics at the Brookings Institution, Li was heavily involved in the democracy experiments, winning election as head of the student assembly. In an article written a few years ago, Wang Juntao recalled Li’s support for the student elections and a later meeting with him during the 1989 protests. Li had lost some of his independence, he said, but “was still active and open-minded”. Wang concluded: “He said he still valued the spirit of people from our university, and if he one day became a leader, he would welcome criticisms from all his classmates.”

The perception of liberal sympathies held back Li’s career for a number of years, but he soon began to show a rare talent for moving up the system’s rigid hierarchy. He managed to win a position in the bureaucracy of the Communist Youth League of China, which has also been the power-base of Hu Jintao. As well as becoming one of Hu Jintao’s protégés, he used an interest in tennis to curry favour with other influential party elders.

Yet although he is widely praised for his sharp intellect, even temper and ability to turn potential enemies into allies, Li has not yet managed to inspire widespread confidence, either within or outside the party. Some of this is rooted in a feeling that he suffers from bad luck – a slight that is surprisingly important among superstitious -Chinese. During his time as governor of Henan province, there was a series of huge fires, including one at a shopping mall in Luoyang which killed 309 people. Shortly after moving to be party secretary of Liaoning province in the north-east, 214 miners died following a massive explosion.

He has also not managed to shake off the more substantial charge that he is a passive leader, who reacts to events rather than getting ahead of them. Li moved to Henan just as the first reports began to appear about a major outbreak of HIV/Aids, which was caused by unhygienic blood-collection practices. The government response was hugely inadequate, trying at first to block news about the epidemic and providing minimal support to victims. The result was a series of mass protests and there were even reports from Henan of Aids victims threatening to infect passers-by with needles. According to China’s New Rulers, a 2003 book allegedly drawing on leaked party personnel evaluations, “many senior leaders in Beijing blamed this desperate behaviour on the ineffectiveness of Li Keqiang”.

Indeed, this sense of indecisiveness has been the reason for some of the behind-the-scenes pressure in Beijing for Wang Qishan, the vice-premier in charge of financial issues, to get the premiership in 2013, instead of Li. However, the campaign in favour of Wang seems to have lost support, especially after Li’s successful trip to Europe in January. (If the contest between the two were decided by nicknames alone, Li would lose out. In Henan province, he became known as “Three Fires Li” after the string of disasters, while Wang’s capacity for handling major problems, such as the 2003 Sars outbreak, has led insiders to call him “The Firefighter”.)

The same negative impressions inform the scepticism of many in the reform camp about whether Li and the other new leaders will seek to push bolder ideas about politics. “We are not expecting much from this next generation of leaders,” says Ai Weiwei, the artist and persistent government critic. “Maybe the generation after. After another decade, they will be more open in their ideas.”

Shanghai flyovers and motorways at night
Shanghai, a city transformed in a generation by China’s economic reforms

Even if Xi and Li do have big plans of their own, they will be heavily constrained by the system they are taking over. The orderly leadership succession process that is bringing them to power is part of a drive initiated by Deng Xiaoping to create a more predictable political structure that could never again produce the quixotic, centralised control that Mao exercised. In its place is a collective leadership with the Politburo Standing Committee as the main focus. That means there is much less chance of China suddenly shifting direction, but it has also meant a system less able to take hard decisions, more cautious and interested in defending the status quo.

As it happens, when Hu Jintao and Wen Jiabao were assuming power nearly a decade ago, there was also widespread speculation that they were closet political reformers. Indeed, one of the clues insiders pointed to at the time was their own strong links to Hu Yaobang, who was a mentor to Hu Jintao (no relation), while Wen was one of his senior aides. Both men also visit Hu Yaobang’s widow every year over the New Year holiday.

During the Hu-Wen years, there has been a series of attempts to kickstart a discussion about political reform that has gone nowhere. A 2005 white paper on the Chinese political system concluded that democracy is “the common desire of people all over the world”. Last year, Wen published an article in the People’s Daily extolling Hu Yaobang, which many observers took as a coded appeal for political reform. In the article, Wen recalled a trip he made with Hu in 1986 to a rural area of the poor south-west province of Guizhou. “Every time I think back on this, Comrade Yaobang’s sincere, magnanimous and amiable expression keeps appearing before my eyes. Cherished feelings stored in my heart for all these years swell up like a tide, and it takes a long time for me to calm down,” Wen wrote. He followed this up with a series of speeches and interviews about the importance of “universal values” and on the need for the political system to keep up with the changes in the economy. Yet the initiatives have had little impact. Indeed, some of Wen’s comments about political reform received only cursory coverage in the state media, which is controlled by another official on the Politburo Standing Committee.

Xi and Li will have to navigate the same thicket of vested interests. One western diplomat, who has observed Chinese leaders close-up since Deng Xiaoping in the 1980s, describes how each generation has been better prepared and educated when it took office, but less able to actually exercise real power. Short-term problems are approached with ever-greater professionalism, he argues, but the bigger questions are left for another day. “It is a dictatorship without a dictator,” he says.

Geoff Dyer is the FT’s Beijing bureau chief

To comment on this article, please e-mail magazineletters@ft.com

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A hard act to follow

Wen Jiabao

Within hours of the massive earthquake in Sichuan in May 2008, current premier Wen Jiabao was on a plane to the disaster site. For the next few days, he was constantly filmed tramping around collapsed buildings in an old pair of training shoes. “This is Grandpa Wen here,” he called down to one child trapped in the rubble.

Among political and business circles, Wen has plenty of critics who see him as unwilling to take tough decisions. But among the public he is by far the most popular of the senior leaders, the result of a flair for public relations that many western politicians would envy. The son of rural teachers, he always manages to spend some time over the New Year break in poor, rural areas, cameras on hand. It is a new style of politics for China, which some fear could become a form of rabble-rousing populism. But Wen’s ability to stand out from a pack of leaders, who would all be called grey were it not for their immaculately dyed hair, makes him a hard act to follow.

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WikiLeaks on the leaders-in-waiting

Xi Jinping:

According to a long cable based on extensive conversations with a childhood friend, after the Cultural Revolution Xi “chose to survive by becoming redder than red”. Through his father, he had a sense of entitlement as one of “the legitimate heirs” of the revolution and was a member of a generation of princelings who “deserve to rule China”.

He has a sister who lives in Canada and a brother who at one stage lived in Hong Kong.

In his early career he “was quite taken with Buddhist mysticism” and fascinated with “Buddhist martial arts, qigong and other mystical powers said to aid health”.

Li Keqiang:

When he was party secretary of a north-east province, he confessed to the US ambassador that he did not believe official figures for GDP. They were “for reference only”.

Lee Kuan Yew, Singapore’s founding father, told a US official in 2009 that Li might lose out on the premiership to Wang Qishan, also currently a vice-premier, whom he described as “an exceptional talent”.

via ft.com

Fascinating portrait of China's next generation of party leaders. Xi Jinping appears to be a much more formidable leader than his predecessor Hu Jintao, but Wen Jiabao will be a very tough act to follow and Li Keqiang has an uphill battle to wage to fill "Grandpa Wen's" shoes.

Posted via email from China Wakes

2.12.2011

China's reaction: Build a wall | The Economist

Build a wall

The Year of the Rabbit starts badly

China's reaction

Feb 3rd 2011 | BEIJING | from PRINT EDITION

THE Chinese Communist Party’s Publicity Department (or Propaganda Department, a closer rendering of the Chinese) is adept at controlling news from abroad that might inflame sentiment at home. As communism collapsed in Eastern Europe 20 years ago, it kept all but the barest news out of the domestic media, jammed foreign broadcasts and ordered vigilance over fax machines.

In response to the unrest in Egypt, the department has apparently instructed the Chinese media to use only dispatches sent by the official news agency, Xinhua, and either to bury news of events there or play up aspects that show the costs of turmoil. Reporting the travails of stranded Chinese tourists, or the government’s noble attempts to rescue them, is fine, but sympathy with the protesters is taboo. The department’s instructions to the media are, as usual, a secret, but their effect is clear.

The party has also been busy trying to control the internet. Twitter has been blocked in China since 2009, but home-grown versions are hugely popular. Anyone trying to follow postings by users with an interest in Egypt, however, might struggle. Merely searching for the word “Egypt” in Sina Weibo, one of China’s leading Twitter-like services, produces a warning that “according to the relevant laws, regulations and policies, the search results have not been displayed”. On Baidu, a big news portal, a prominent list of “hot search terms” includes “the return of compatriots stranded in Egypt”, but nothing else.

Related topics

Chinese news reports have briefly mentioned the disruption of internet and mobile-phone services in Egypt. They have not, however, discussed China’s pioneering use of such techniques to impede the mobilisation of crowds. Use of the internet and mobile phones for international calls and text-messaging was cut off for months in the far-western region of Xinjiang after ethnic clashes there in 2009.

On February 1st the party’s main mouthpiece, the People’s Daily, relegated Egyptian politics to five terse paragraphs on page three but published a full page of articles under the headline, “The Internet is Warming the Whole of Society”. The internet, one scholar was quoted as saying, is a “great promoter of social change”. The party knows that all too well.

from PRINT EDITION | Briefing

Its always interesting to watch the Chinese media react to events with significant geopolitical implications because of the overt control over the media exerted by Beijing. Revolutions rarely carry the historical significance of these past weeks events in Eygpt, and the moment has clearly not been lost on the leaders of the Chinese Communist Party.

I cannot say that I totally understand why the Chinese political leaders fear such news making it into the hands and minds of the Chinese people. Its not as if the people aren't well aware that they are in control of the status quo in China, of course they understand that if they wanted a new government it would almost certainly be theirs to take. If anything, IMHO, the party is the chosen vehicle of the people as the fast means of achieving prestige and respect as a culture/civilization on the global stage.

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