Preparing to Step Aside, Chinese Leader Warns of Challenges

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BEIJING -- Capping 10 careful years at the helm of the Communist Party, China's top leader, Hu Jintao, on Thursday boasted of successes during his tenure while issuing a blunt warning against unrest and political reform.

Mr. Hu, 69, is to step down as the party's general secretary next week, handing over power to his designated successor, Xi Jinping. His speech at the opening here in Beijing of the Communist Party's 18th Congress was likely to be his last major address -- a chance to write his own eulogy while also setting the course for Mr. Xi.

"He's worried about how history will view him," said Qian Gang, who works with the China Media Project of Hong Kong University. "On the whole, he is against reform."

Formally, Mr. Hu nodded to almost every manner of reform: economic, social, political and environmental. But, in the fashion of his predecessors, this was balanced with warnings of the need to guard against a rise in unrest. It was an unusual admission for a man whose signature slogan is creating for China a "harmonious society."

"Social contradictions have clearly increased," said the formal 64-page document issued at the congress. (Mr. Hu's speech, even at 100 minutes, was only a summary.)

"There are many problems concerning the public's immediate interests in education, employment, social security, health care, housing, the environment, food and drug safety, workplace safety, public security and law enforcement."

The solution, Mr. Hu said, was "reform and opening up," a policy initiated by the man who chose him for the job nearly two decades ago, the paramount leader Deng Xiaoping.

Mr. Hu also lauded his own contribution to Communist Party ideology: "Scientific Development." Most of his predecessors have had their own ideologies enshrined as guiding state doctrines. His repetition of the phrase -- which means that the party should be pragmatic and follow policies that are demonstrably effective -- implied that he, too, would be so honored.

But his caveats to reform were many.

According to Mr. Qian, a leading expert on textual analysis of Chinese leaders' speeches, Mr. Hu's speech hit on almost every anti-reform phrase used by Chinese Communist leaders.

He referred to Communist China's founder three times with the phrase "Mao Zedong Thought," and said the party must "resolutely not follow Western political systems," something not mentioned at the last party congress five years ago.

"They don't say these terms lightly," Mr. Qian said. "When they mention it, it matters."

Mr. Hu also coined a new term, pledging that the party will not to follow the "wicked way" of changing the party's course.

Mr. Hu's speech is thought to have been drawn up in cooperation with his successor, Mr. Xi. While Mr. Xi is widely thought to be consulting with liberal members of China's intelligentsia, he either did not oppose Mr. Hu's direction or was not able to change it.

That is important, observers say, because Mr. Xi will not exercise unrestrained power when he takes over. Besides the other half-dozen members on the Standing Committee of the party's Politburo, he will also have to listen to the advice of Mr. Hu, Mr. Hu's own predecessor, Jiang Zemin, and an estimated 20 other "senior leaders." As if to emphasize their role, these men were seated on the dais next to Mr. Hu. Many of them are in their 70s and 80s and have exercised power for decades.

"Xi Jinping certainly won't be a Gorbachev," said Yao Jianfu, a former official and researcher who closely follows Chinese politics and advocates democratic change. "Every aspect of reform has an important precondition -- that the Communist Party remains in charge."

Even though Mr. Hu's speech was broadcast live on national television and on screens in Beijing subway cars, gauging popular opinion was difficult.

Microbloggers, who are mostly urban and fairly well educated, at times cast scorn on the rhetoric. One blogger listed the Marxist terminology that Mr. Hu used and wrote simply "madness." Others used laughing emoticons, while some delved closely into the speech for clues to new policies -- some noted his fleeting mention of China's unpopular single-child policy.

Mr. Hu's tough rhetoric on social issues contrasted with his strong reaffirmation of the Communist Party's commitment to the economic policy mantra of "reform and opening up," a policy that has produced soaring trade and economic growth over the past three decades.

Many economists have begun to question, however, whether Mr. Hu's tenure has amounted to a "lost decade" for economic reform. State-owned enterprises have gradually strengthened their roles in the economy through a combination of monopoly power and access to cheap loans from state-owned banks.

Mr. Hu called for reform of state-owned enterprises and a level playing field for entrepreneurs who try to compete against them. He also endorsed a series of other economic liberalization moves that have been discussed for years, although their progress has sometimes been slow during his tenure.

Mr. Hu endorsed making interest rates and the exchange rate of the renminbi more dependent on markets and less on government fiat. The People's Bank of China, the central bank, has already begun doing this by gradually broadening the range of interest rates that banks can charge based on the creditworthiness of borrowers and by widening the daily range in which the currency can trade against the dollar.

Mr. Hu also repeated the government's longstanding desire to expand the role of consumer spending in the economy and reduce the dependence on investment -- although despite years of similar statements, the share of economic output from investment spending set another record last year, at 45.7 percent.

Another frequent complaint of foreign governments and foreign businesses, China's lax enforcement of copyrights and patents, drew at least an acknowledgment from Mr. Hu, who promised greater protection of intellectual property as a way to foster innovation in China.

There was one perhaps unintentional sign at the Party Congress that China remains enthusiastic about foreign brands -- at least if they are manufactured in China. A special parking lot for officials on the north side of the Great Hall of the People, across the street from the walled residential compound where the country's leaders live, was full of German, American and Japanese cars, with no sign of any Chinese models.

The lot held at least a dozen black Audi A8 sedans and several dark blue Buick GL8 minivans -- both are assembled in China -- and even a white Toyota Highlander crossover utility vehicle. Sales of Japanese-brand models have plummeted about 40 percent in each of the past two months compared with a year ago after a Sino-Japanese territorial dispute in the East China Sea led to rioting and the destruction of around 100 Japanese brand cars.

Mobs have attacked Japanese cars, and occasionally even their owners, even though most Japanese cars sold in China are manufactured by joint ventures in China so as to avoid China's 25 percent tax on imported cars, the highest of any large auto market.


This article originally appeared in The New York Times.


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