China Communists Near Soviet Tenure as Leader Pick Looms

China’s Communist Party will approach its defunct Soviet counterpart in longevity in power after it navigates the leadership succession clouded by concern over Xi Jinping’s status, a Bloomberg News survey indicates.

The party that took control of the mainland in 1949 will still be in office a decade from now, according to 21 of 22 Chinese political analysts across seven nations who were surveyed in the past two weeks. Ten respondents cited the likelihood of some degree of evolution, such as embracing greater democracy within the party, and one predicted a split.

With China poised to record its weakest growth in two decades this year, most in the survey said tackling the economy was the top challenge for the so-called fifth generation of leaders. The party first must secure the transition to a new Politburo Standing Committee, after a public absence of presumptive incoming General Secretary Xi, 59, spurred speculation about his health.

“Without political reform, the party is doomed because all these strange events only happen because the party is still a Leninist Party -- still basically a party run on very old, obsolete institutions from the days of the Soviet Union,” said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong. Failure to adapt “will affect everything, even economic development,” he said.

The party’s challenge is to introduce change while avoiding a Soviet Union-like scenario of rushed political and economic opening in the late 1980s that culminated in the Communists’ downfall in 1991, ending 74 years in power.

Smaller Team

The party of Mao Zedong will work to retain its leading role with a smaller team at the very top, with the Standing Committee shrinking to seven members from a current nine, according to 15 of 22 respondents who answered the question.

Twenty-six people answered all or part of the survey, which spanned academics and researchers at think tanks who specialize in the analysis of Chinese politics, including seven based in Greater China.

“It won’t be the same Chinese Communist Party,” said Francois Godement, a professor of political science at Sciences Po in Paris who advises the French foreign ministry on Asian affairs and has contributed to studies on China including “A Power Audit of EU-China Relations.” He predicted “a stepped up process of political reform from inside, with more room for elections, up to a point and more debates, with limits.”

Village Democracy

Outgoing Premier Wen Jiabao talked about a greater role for democracy at the village level. He and President Hu Jintao, who also serves as general secretary of the party, are forecast to begin transitioning out of office at a congress in the coming weeks. China has yet to announce the dates of the gathering, or whether it may be affected by any issues stemming from the status of Xi, who is currently vice president.

State-run media reported on the activities of Xi for the first time since Sept. 1 yesterday, signaling that the leadership was seeking to counter speculation his absence would disrupt the once-in-a-decade transfer of power.

“I’m happy to know that you have noticed relevant news,” Foreign Ministry spokesman Hong Lei said at a briefing today when he was asked about the media report.

The official Guangxi Daily reported that Xi, who had canceled meetings last week with U.S. Secretary of State Hillary Clinton and Singaporean Prime Minister Lee Hsien Loong, joined other top officials in sending condolences to the family of a party member who died on Sept. 6. The story was also posted on the Communist Party’s website.

‘All Speculating’

Gary Locke, the U.S. ambassador to China, said in Washington yesterday that he doesn’t know why Xi canceled his meeting with Clinton, and that “we’re all speculating” as to why Xi hasn’t been seen in recent days. Citing unidentified people from China, the Hong Kong Economic Times reported that he has only a minor injury and said speculation that he has cancer or was in a car accident are fictitious.

Other reports have said he may have suffered a heart attack or sustained a back injury, either while playing soccer or swimming.

Xi could make a public appearance as early as tomorrow as he recovers from a bad back, Reuters reported today, citing unidentified people. Xi has been receiving treatment for a back injury while preparing for the leadership transition later this year, the news agency said.

Bo Ouster

The party is seeking to bolster its legitimacy after being rocked by its biggest political scandal in a generation with the ouster of Bo Xilai from the ruling Politburo and the suspended death sentence his wife Gu Kailai received last month for murdering a British businessman.

“Ceding more space to political opposition” may help the 82 million-strong party maintain control of the world’s second- largest economy, according to Kerry Brown, a professor at the University of Sydney and former diplomat with the British Embassy in Beijing.

A majority of respondents, questioned before speculation over Xi’s status escalated in the past week, saw him succeeding Hu. Son of a former vice premier, Xi ran coastal Zhejiang province from 2002 to 2007, and was party secretary in Shanghai in 2007 before being appointed to the Politburo Standing Committee at the 17th party congress that fall. On a trip to the U.S. in February, he met with President Barack Obama in Washington and toured rural Muscatine, Iowa, which he had visited as an agricultural official 27 years before.

Limited Measures

Any wrinkle with Xi’s succession may heighten focus on the other officials anticipated as incoming members of the top policy making body. Vice Premier Li Keqiang, 57, will become the next premier, and Wang Qishan, 64, will ascend to executive vice premier, according to the survey majority.

Li has been executive vice premier in charge of the economy, giving him a front-line view of the dangers stemming from non-performing loans from China’s record 2009-2010 fiscal stimulus and credit boom. Policy makers have adopted limited measures this year as growth moderated. A large-scale policy response would hurt long-term growth and the government’s hesitation in making “bold moves” is pragmatic, the official Xinhua News Agency wrote in a commentary yesterday.[bn:PRSN=1768924]

Wang [] has been one of China’s most visible officials, serving as counterpart to Clinton and U.S. Treasury Secretary Timothy F. Geithner in annual bilateral Strategic and Economic Dialogue talks. Wang participated in an interview on the “Charlie Rose” show broadcast on PBS and Bloomberg Television in May 2011, when he called for reducing reliance on exports.

December Uprising

Guangdong Party Secretary Wang Yang, 57, who runs China’s top exporting province, is also projected to make the Standing Committee, according to the survey. State-controlled media praised Wang for peacefully settling a December uprising in the fishing village of Wukan that saw residents expel local party officials. The resolution became a potential model for ending such disputes in the future.

The downfall of Bo, whose removal as Chongqing party boss precipitated the biggest political crisis in China since the Tiananmen Square tragedy of 1989, may have opened the way for Zhang Dejiang. Zhang, 65, who took the place of Bo in running the nation’s largest municipal region, will join the panel, the survey indicates.

Party organization chief Li Yuanchao, 61, and Shanghai Party Secretary Yu Zhengsheng are also seen as joining.

Should the Standing Committee keep its nine-member format, Tianjin Party Secretary Zhang Gaoli and State Councilor Liu Yandong will join their ranks, according to the survey.

More Challenging

Liu, the only female candidate in the running for a place on China’s supreme decision-making body, would become the first woman in the history of the People’s Republic of China to be named to the body. Ten analysts predicted her inclusion in a nine-person group.

Xi’s team may find its tenure at the top more challenging than that of Hu and Wen. During their nine full years of rule from 2003 through 2011, economic growth averaged 10.6 percent a year and China leapfrogged past Japan, Germany, France and the U.K. to become the world’s second-biggest economy after the U.S.

UBS AG (UBSN) and ING Groep NV on Sept. 7 cut their forecasts for economic expansion this year to 7.5 percent amid a weakening global outlook and less forceful policy support than they previously expected. That would be the slowest pace since 1990.

China will loosen its one-child policy, which already has many exceptions, the respondents said. Among the 26 people responding to a question on whether China would abandon the policy, three said the government would make no changes.

Atomized Disturbances

Of the 24 analysts who responded to a question asking whether China would experience significant social unrest over the next decade, one said no and one considered it unlikely. The number of so-called mass incidents such as strikes and riots doubled to 180,000 in the period from 2006 to 2010, Tsinghua University sociologist Sun Liping wrote last year.

Disturbances probably will continue a pattern of being “atomized, and not nationally coordinated, but certainly serious,” said Perry Link, a professor at the University of California, Riverside. He said the party’s biggest challenge over the next decade could be combating “growing popular resentment of the ruling group,” which has been stoked by rising inequality, slowing growth and corruption.

The scandal surrounding Bo highlighted how families of China’s most powerful politicians have amassed vast wealth. The extended families of Bo and Gu, for example, accumulated at least $136 million in company shares and property, according to regulatory and corporate filings.

Strengthening the rule of law and giving party members a greater say in how decisions are made may help keep the party in power, according to John James Kennedy, a professor of political science at the University of Kansas who has written studies of rural politics in China.

“In other words, the CCP must sacrifice some level of political power in order to remain in power,” Kennedy said.

To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net; Kevin Hamlin in Beijing at khamlin@bloomberg.net; Nicholas Wadhams in Beijing at nwadhams@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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