A tale of two cities

China is in the midst of a fierce succession struggle. Seven of nine members of the Communist Party’s powerful Politburo Standing Committee will be newly appointed this year. By the end of the year, a new head of state will be chosen at the party convention. In spring 2013, President Hu Jintao will step down and Xi Jinping is set to succeed him. Moreover, Prime Minister Wen Jiabao will likely be succeeded by his current deputy Li Keqiang.

Until February, transition seemed to be smooth and clear. In October, Vice President Xi was inducted to the Central Military Commission, which is usually the last step before becoming president. Observers noted, however, that this was a set-back for President Hu’s favourite Li. Today, Xi’s promotion to president seems a safe bet, but the struggle over the coming members of the Politburo is likely to continue. Some China watchers already spoke of a “leadership split” – Xi is believed to be a favourite of former President Jiang Zemin. Current inner-party struggles, however, are not just about personal careers. They concern ­policy. Today, two cities represent the paradigms on offer. The Chinese speak of the “Chongqing model” and the “Guangzhou model”. The events of the past three months suggest the latter will prevail.

Chongqing is China’s most populous city. It is located in the western hinterland. In past years, the challenge here was to catch up with the country’s fast developing coastal regions. Chongqing became a hotbed of development marked by crony capitalism and fast growing inequality. To some extent, this trend is driven by labour-intensive industries shifting away from the coast.

Guangzhou, on the other hand, is the capital city of Guangdong province. This is the region where China’s economic liberalisation first took root and which became something like a “workshop of the world”. The challenge here is to move on from labour intensive industries to high-tech sectors.

Chongqing’s regional party leader Bo Xilai recently fell from grace and was purged from the party hierarchy. He had been taking a leftist approach, promoting strong public-sector companies, fierce anti-corruption drives and governmental redistribution of incomes. He was in favour of state-led modernisation and liked to use Mao-era slogans such as “plain living and hard struggle”. He prominently advertised a new “Red GDP”, stressing indicators for social welfare. Moreover, he was fond of mass mobilisations of the kind the Communist Party relied on in the Mao years, but which the regime in Beijing now frowns upon. His harsh anti-mafia drives, moreover, were known to be arbitrary and lack rule-of-law principles. At the same time, these drives targeted high-level leaders and revealed deeply rooted corruption.

Guangzhou’s party chief Wang Yang never raised his personal profile in such a way. He has the reputation of an economic moderniser and tends to rely on market-based approaches. Since he is a former Chongqing party chief, moreover, he laid the foundations for progress there. Unlike Bo’s policymaking, however, his does not offer any obvious and fast-implementable options for rising to challenges such as growing public dissatisfaction.

To the regime leadership in Beijing, Wang and Bo represent the liberal and left-conservative forces of the party. Decision making in the Communist Party is not transparent, so observers must read
between the lines.

Many had considered Bo a rising star. Nonetheless, he and his family are now embezzled in cases of corruption and even murder. To what extent they are guilty of crimes, however, is hard to establish. China’s law courts are not independent, and many legal cases have political dimensions – especially when party leaders are involved. At the moment, Prime Minister Wen, who is known for relatively liberal rhetoric, seems to be trying to make sure that the next generation of Chinese leaders will not revisit the totalitarian campaigning of the Mao era. Whether he will succeed, is impossible to predict at this point.