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Mao Zedong declared continuous revolution for China. His successor Deng Xiaoping hoped he had killed this phenomenon forever. But the ghosts of the past appeared to have returned to haunt a country which in the last three decades achieved unparalled economic and diplomatic success.

The Bo Xilai incident exposed murky politics under the cover of serving the people and fighting corruption. ‘Serving the people’ is the communist party’s motto, but how to serve the people is the biggest debate raging in China which even the all powerful propaganda department of the party is failing to hide from the public. The divide appears to be coming down from the very top – the Politburo and its nine-member Standing Committee (PBSC).

The Bo Xilai incident rocked the party and the country. As a powerful princeling and Party Secretary of Chonqing Municipality, Bo was almost assured of elevation to the country’s most powerful bench, the PBSC in autumn this year. The scandal exposed that while on the one hand he was cracking down on the local mafia ruthlessly (around 13 were even executed), he and his wife Gu Kailai were heading their own corruption mafia. Gu Kalai is now accused of murdering a British business associate of the family, Neil Heywood, last year. Both are under detention and investigation. The couple stand ruined.

What was under close watch from a section of the top party leadership in Beijing, including Party Chief and President Hu Jintao and Premier Wen Jiabao, were Bo’s rejuvenation of the Cultural Revolution spirit, building his personality cult, interaction with army and spying on central leaders including telephone conversations of Hu Jintao. There were rumours of Bo planning a coup. He used to speak disparagingly about the central leaders with his close associates.

Corruption is the most burning topic in China today. To curb corruption, the issue of democracy, political reform and the rule of law have also entered the debate. Not so long ago, Premier Wen Jiabao had warned that without political reform and democracy China could suffer another Cultural Revolution.

Wen Jiabao started his push for political reform and democracy more than two years back. Initially, the official media censored his talks on the subject, but as he took to speak out his views abroad he began gaining support at home the media reported his speeches on the subject.

Initially, people including the Chinese, thought Wen was the deceptive soft face of a hard-line conservative party. Now it appears Wen took a calculated risk after assessing his support among the party’s power hierarchy. Wen, who will retire at the party congress and the National People’s Congress (NPC) next March, may be remembered by posterity for his contribution to political reform and democracy. Wen’s political career grew under China’s first liberal Party Chief Hu Yaobang, whose death in May 1989 was partly responsible for the June 1989 Tiananmen Square pro-democracy protests by students.

The debate, in all its forms, appears to have broken out of the Party’s usually well guarded closet. The official media outlet, Huanqiu Online (May 29) carried a commentary reasoning that democracy cannot curb corruption, market economy impeded the party’s efforts to serve the people, corruption was endemic in the world, and the key to control corruption is to keep it to an acceptable limit for the people.

The China Youth Daily (May 31) came out with a sharp rejoinder charging the Huanqiu of incredible arguments trying to justify a tolerable degree of corruption. It emphatically argued that without a change in the system and democracy there is no cure for corruption, and there was nothing like “acceptable level of corruption”.

The two dailies represent opposite political camps. But in China it is rare to bring out political confrontations so publicly. Post-Cultural Revolution, there have been personality attacks through historical allegories and innuendos, but not so blatantly between two divergent groups who wield power at the same time. The consensus is beginning to crack.

The internet has become a very effective tool for the dissenters in China. Although the government has closed down Twitter and the Face Book and other foreign portals, their own services like Weibo mange to circulate people’s anger and sarcasm against the party and the state despite heavy censorship.

An editorial in the Global Times (June 7) by its hard line conservative editor Hu Xijin advocating guiding mainstream views and clamping down on and balancing pro-US and pro-western views, faced severe criticism and comments in the Chinese web portal Weibo, sometimes in foul language reflecting frustration with the system. The demand was freedom and democracy.

Similarly, a political sermon by PBSC member and China’s intelligence and security czar, Zhou Yankang proclaiming that “what the masses most abhor, we (the public security) will attack” invited equally sarcastic comments, with one asking if the masses most abhor the public security, then what?

According to Hurun (Shanghai) report, the wealthiest 70 members of the national legislature have an estimated net worth of $89.8 billion, compared to $7.5 billion for the 660 most powerful officials of the three branches of the US government (Wall Street Journal, June 14). With the low salaries of Chinese officials compared to their American counterparts, the corruption in China is immense. This is only the tip of the iceberg.

The People’s Liberation Army (PLA) cannot remain uninfluenced by these developments especially when this institution is the protector of the party and closely interlaced with it. The PLA’s mouthpiece, the Liberation Army Daily (LAD) (June 12) called for “resolutely” opposing all corruption as it affects the combat effectiveness of the troops. Widespread reports say that officers were buying promotions and postings, suggesting how deep he rot is.

A very serious question to have risen in China is the PLA’s loyalty to the party, and its political leaning. China’s officially declared position says the party’s security and leading position is the first priority. Everything follows from that. The PLA’s duty is to ensure this position of the party and obey the party’s command – that is the party commands the gun.

Over the past month, especially after the fall of Bo Xilai, there has been a campaign to correct any dissenting thinking in the PLA, emphasizing that it owed its allegiance to the party. A view emerging among some generals prefer an army loyal to the state rather than the party. This is a challenge to the leadership of the party on which the system rests. In a distant vision, this may be a move that can ultimately ring the death knell of one party rule. From all accounts, this is alarming for the party.

Another challenge for the Party comes from PLA hardliners, both serving and retired. The retired officers who still form part of the systems as researchers are the more vocal. They certainly represent fellow thinking serving officers. People like Maj. Gens. Luo Yuan and Qiao Liang and Senior Colonels like Dai Xu and Liu Mingfu are also foreign policy hawks. They are also of the view top Chinese leaders including in the PLA have been suborned by the America’s CIA. They do not hide their views.

Last year, serving Maj. Gen. Liu Yuan, son of former President of China Liu Shaoqi, alleged former to present Party Chiefs had sold out to foreign forces. Gen. Liu Yuan was also close friend of Bo Xilai. These are some of the many cross currents plaguing the Party and the PLA.

There is no doubt that certain political, social and military views are rubbing on the Chinese officials and leaders, both civilian and military, who freqently travel abroad and interact with their democratic counterparts. As Deng Xiaoping had said when you open your windows some insects will come in.

Politically a serious clash appears to be slowly brewing between the haves and have nots. All opportunities are with the party cadres and officials. All of them have vested interest in the party. Jobs and positions are either sold or given to family, relatives and friends. Being a party member opens out all kinds of opportunities. Many are joining the party not because of ideological dedication but for opportunities.

Social instability in the country is approaching dangerous proportions. There are reported to be 180,000 mass protests a year. Scarcity of jobs for college graduates is of particular importance. Educated young men and women are being forced to become critics of the system. On top of that when senior leaders like Zhou Yangkang and editor-in-chief Hu Jixin make irresponsible comments publicly including the state controlling the minds of the people, the public is naturally incensed.

A critical hurdle to any change is that the realists are also as interested in status quo because they too are as much dependent on the party as the hardliners are. Nobody wants rock the boat. At the same time it is not possible to fit a square peg in a round hole. Adopting western practices and instruments to develop the country will per force bring about pressures to change.

China is living in interesting times. The current mood in China appears to be a repeat of that of 1989. This does not mean there will a repeat of Tiananmen Square. Lessons have been learnt. Other means will be found. China is too big a country sitting at global high tables and cannot shut out the global model.

(The writer, Mr.Bhaskar Roy, is an eminent China analyst based in New Delhi;

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