Oct. 15 (Bloomberg) -- China's Communist Party will allow more local officials to be elected as it ``expands socialist democracy,'' President Hu Jintao said today at the opening of China's most important political event in five years.

``We need to deepen institutional reform at the township level to strengthen government authorities there and improve the systems for transparency in government and village affairs,'' he told delegates at the party's 17th Congress, convened to set political priorities and reshuffle the party's leadership.

Hu, expected to be re-elected as party chief at the week- long meeting, will try to anoint a successor as the party grapples with policies to avoid social unrest caused by corruption and pollution.

``This is Hu's view of how to deal with social instability - - to get people more involved,'' said David Zweig, director of the Center on China's Transnational Relations at the Hong Kong University of Science & Technology. ``The problem is, any time we see people getting more involved, the party gets scared and backs off.''

The congress, held every five years and attended by the more than 2,200 delegates, appoints the Communist Party's political bureau and its standing committee, the most powerful body in China. The Communist Party sits atop China's two-tier government system, overseeing the functions of the Cabinet and the civil service.

Cost of Corruption

Corruption costs China as much as $86 billion a year and poses one of the most serious threats to the nation's economic and political stability, the Carnegie Endowment for International Peace said in a report released Oct. 9.

Last year, China had about 72,000 cases of protests over problems ranging from corruption to mining disasters and pollution, according to the party's Central Committee for Public Security.

Hu has fired several top officials, including Shanghai Party Chief Chen Liangyu, as part of an anti-corruption drive and has set up an agency to tackle graft.

``This is a critical party congress,'' said Steve Tsang, a fellow of St. Antony's College, Oxford University. ``Hu is not as dominant as previous leaders but he will be able to consolidate his power and try to improve governance and minimize social instability.''

Consolidating Power

Hu's success in consolidating his power will depend on whether he can put his own proteges on the standing committee and retire or block loyalists of his predecessor, Jiang Zemin, whom he succeeded at the 2002 congress, said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong.

Delegates will also debate amending the country's constitution to include Hu's ``Harmonious Society'' doctrine, said Guo Yezhou, a congress delegate and spokesman of the party's International Liaison Department.

Hu today addressed ``scientific development'' of a Harmonious Society in his opening speech to the Communist Party delegates, adding his doctrine to those of Mao Zedong, Deng Xiaoping and Jiang as a guiding principle for the ruling party.

Restoring Legitimacy

The Harmonious Society doctrine is Hu's attempt to restore the Communist Party's legitimacy through a social, political and environmental reform agenda to reduce corruption, improve governance and narrow the gap between the rich and poor and win public confidence among China's 1.3 billion people.

More than 318 million Chinese live in poverty, on less than $2 of income a day, according to the World Bank in an April study. At the same time, the nation has 100 U.S.-dollar billionaires and 320,000 U.S.-dollar millionaires, according to Shanghai-based Hurun Report and Merrill Lynch Cap Gemini, respectively.

Hu will also say that China is ready to talk to ``any political party in Taiwan ahead of the island's March presidential election, according to a draft of his speech.

``We are ready to conduct exchanges, dialogue, consultations and negotiations with any political party in Taiwan as long as it recognizes that both sides of the straits belong to one and the same China,'' the draft says.

To contact the reporter on this story: Allen T. Cheng in Beijing at acheng13@bloomberg.net

Last Updated: October 14, 2007 23:06 EDT