China's time for change

There was no ticker-tape and there were no hugs on Thursday when Xi Jinping stepped out onto the red carpet in the Great Hall of the People in Beijing.

Xi was freshly "elected" as general secretary at the Communist Party's 18th congress, the role for which he was anointed five years ago. The appointment of his deputy, Li Keqiang, also had been foreseen.

The nature of elite political power has changed since the days of Mao Zedong. His word was law, and he led China into chaos. After Mao, Deng Xiaoping saw that economic reform was China's salvation. The next two generations of Chinese leaders -- Jiang Zemin and Hu -- continued economic reform but saw their own power decline as the influence of interest groups within the party grew.

Xi now inherits their problem. Leaders of state-owned enterprises, senior army figures and former leaders, including Jiang and now Hu, will all push their interests directly or through their proxies on China's most powerful party body, the Politburo standing committee, which is now ruled more by consensus. Vested interests have become so entrenched that reform is hard.

Are the new men up to the job?

The list of changes needed is a long one. The party must reduce the power of the state-owned enterprises, which hog credit and stifle the growth of private enterprise. It also needs to reform a financial system that shovels the savings of individuals to the inefficient state sector. Building a welfare state has become an economic priority as well as a social one.

Politically, there are a growing number of voices, even within the party, saying that broader reform is needed. There is little sign of political change, however, even though control may be more sophisticated.

Local government is a mess. As well as opening up the economy, Xi needs to start reforming the Chinese state at the ground level: introducing more competition into the appointment of government officials, reforming the courts to break the party's insistence that it stands above them and above the rule of law, and privatizing land as a way to boost productivity, empower farmers and curb local officials who enrich themselves by grabbing rural land to sell for development.

Change will require bold leadership. The final standing-committee lineup, after much horse-trading, has been reduced from nine to seven members, which might make consensus easier. Xi also has gained control of the key Central Military Commission. This centralizing of power, and the fact that at least five of the seven members are broadly from the same faction of the party backed by Jiang, suggest a unanimity that could aid reform -- if Xi chooses to go down that road.

Three things sadly make change less likely. The first is the type of leader who rises to the top in China's opaque system. Officials achieve promotion not by being bold but by playing it safe and by cultivating high-level patrons. They still live in constant fear of China going the way of the Soviet Union.

Second, many of those in power are "princelings," the offspring or sons-in-law of China's revolutionary families, who have become a self-enriching, hereditary class. Xi is the son of one of Mao's closest comrades. He is married to one of China's most famous singers, and his daughter attends Harvard under a pseudonym. Will a group of "red aristocrats" really be prepared to reform the system that has so enriched their families?

The third is the continuing influence of party elders. The re-emergence of Jiang as kingmaker has been especially clear this week.

Nonetheless, an underlying force for change is coming from below. The Chinese are cynical about politics and expect little but graft from their leaders, but they are also becoming angrier. In his first speech, Xi admitted that the party faces "severe challenges," and said corruption must be dealt with.

With luck, that is a sign that he will act against those vested interests rather than simply paying lip service to reform.

Playing it safe is not an option, given the scale of China's problems. The princeling must become a bold king.

Republished from the Winnipeg Free Press print edition November 17, 2012 A17