MADHAV NALAPAT Shanghai | 10Th Nov 2012
Vice-president Xi Jinping (centre) at the opening of 18th Communist Party Congress at the Great Hall of the People in Beijing on 8 November. Photo: AFP
This megalopolis has been at the core of decision-making in China for two decades, thanks to the behind-the-scenes influence exerted by former President Jiang Zemin (who ruled directly during 1992-2002). Jiang put in place a system whereby economic achievers were given priority in policy, even qualifying for top positions in the Chinese Communist Party (CCP), which for the record still swears by an author whose tomes have disappeared in China, Karl Marx. Over the next two decades, those well-connected have managed to wrest control of almost all key state-owned enterprises (SOEs), making them a hugely affluent and decisive voice in state policy. Jiang, who retained his powerful base within the media and the military, ensured that SOEs continued to be given subsidies and privileges, thereby shutting the door to private entrepreneurs. As a consequence of top-down policies that are very similar to those favoured by the Republican Party in the US, income inequality has grown and so has public anger.
Although President Hu Jintao favoured policies that gave more leeway to private enterprise and to non-elite sections of the population, Jiang's power base ensured that such preferences continued to be largely ignored. However, he got his chance in the final year of his ten-year term to remove Jiang and his numerous well-heeled acolytes from their perch at the core of CCP decision-making. He used the popular revulsion against corruption to take action against those close to the Jiang faction, taking administrative action against no fewer than 660,000 officials at different levels. While initially the Chinese judiciary remained loyal to Jiang, by mid-2010 the judges had got the message that Jiang's approach was getting replaced with the more populist vision of Hu Jintao, and several shifted allegiance. Hu was helped by the fact that the Jiang faction soon turned against Heir Apparent Xi Jinping, seeking to replace him with one of their own, possibly Bo Xilai. Fed by overseas Chinese close to the Jiang faction, reports began to surface about the alleged wealth of Xi's family. This had the effect of Xi abandoning the neutrality (between Hu and Jiang) that had enabled him to become the compromise candidate for the leadership in 2007, and joining hands with President Hu.
The outgoing President of China was quick to use his newfound clout, arresting Jiang's close associate Chen Liangyu (who was party boss of Shanghai, interestingly a city that Hu has not visited throughout his ten years in power). Next to feel the lash was the chairman of the Poly Group, Wang Jun, followed by General Lu Yuan. Their steady loss of power alarmed the Jiang faction, who reportedly sought to go for broke and replace Xi Jinping with another leader. Bo Xilai was chosen by the faction to lead the assault against Hu and Xi, but a falling out with his police chief led to the latter giving US authorities information about the planned coup, data that was immediately sent back to President Hu and Vice-President Xi. Both moved swiftly, arresting Bo's wife. It is expected that the disgraced former leader will soon join Mrs Bo and dozens of other Jiang faction members in jail.
Although overseas media, especially in the Chinese language, continue to be influenced by the Jiang faction, within China, the Hu-Xi alliance has established full control. Two weeks ago, the military finally got prised loose from Jiang, with Hu-Xi loyalists Xu Quiliang and Fan Changlong taking over as vice-chairmen of the Central Military Commission, the apex body controlling the People's Liberation Army. Last week, the former President of China was ousted from his opulent Beijing CMC office, where an entire two floors had been reserved for Jiang and his acolytes. Now that the protector of the Super Rich, Jiang Zemin, no longer wields much influence in the People's Republic of China, watch out for new policies that place emphasis not on creating more billionaires but on more welfare for ordinary cadres and much stronger action against more party officials whose lifestyle does not match their paycheques. President Hu has finally come into his own, but his policies will now need to be implemented by his ally, incoming President Xi Jinping, both of whom have finally established their writ over the 82-million CCP.