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SPIEGEL ONLINE

07/26/2012 02:08 PM

Summer Stress

China's Elite Wrangle Over New Leadership

By in Beijing

Since the days of Mao, China's communist elite has retreated to the seaside resort of Beidaihe to escape the summer heat. But this year, instead of just relaxing, it must also deal with the complicated issue of who will hold the future reins of power in a time of political and economic turmoil.

A gray-haired portrait artist selling his work by the waterfront in Beidaihe says he feels his country needs strong leaders. The best, he adds, would be another revolutionary along the lines of Mao Zedong.

The artist has set out three portraits of the founder of the People's Republic of China. This isn't just a way of drawing in tourists to sit for one of his portraits; it's also a sign of how much he admires Mao. The leader united the nation, he says, and created something lasting -- and that's more than he can say about his country's current leaders, of whom he's made no portraits.

As if that weren't enough, Mao's successors are now disrupting his business by appropriating what seems like all of Beidaihe, a seaside resort town two hours northeast of Beijing by train. Only rarely have China's leaders cordoned off their traditional summer retreat so nervously. Indeed, things weren't even this way in the legendary days when Mao himself and other major figures, including the reformer Deng Xiaoping swam in the Pacific from this beach.

This year, the hordes of wealthy Russians who usually come here from Siberia have stayed away. In fact, rumor has it that Chinese authorities leaned on tour operators to allow as few foreigners as possible into the exclusive resort.

Vacationers arriving in Beidaihe by road must allow police to search their luggage. Uniformed officers guard every intersection, and plainclothes police mingle with bathers on the beach.

Beijing's top leaders and their families have retreated to this resort every summer since the days of Mao. But all these added security measures are a result of the important things they have to discuss. Here, in villas ringed by pines, the country's most powerful individuals are bickering over the precise makeup of the next generation set to assume the reins of the Communist Party at its National Congress this October.

Trouble in Paradise

China's Communists associate Beidaihe with more than just surfing and sunblock. The name also conjures up memories of political dramas and haggling over posts. It was here, in 1971, that Lin Biao, Mao's designated successor, finally realized he'd fallen out of favor. He fled by plane, together with his wife and son, only to die in a mysterious crash in Mongolia.

It was also here, in the summer of 1997, that then-party leader Jiang Zemin had a hard time prevailing against his colleagues. The party's leadership had been unable to agree on proposed personnel changes for the 15th National Congress. But, in the fall, only three days before the congress, Jiang was able to reap the fruits of his intrigue-filled summer: Chen Xitong, who had been removed from his position as mayor of Beijing and was a bitter rival of Jiang, was kicked out of the Communist Party on suspicion of corruption. A year later, Chen was sentenced to 16 years in prison.

Five years ago, Beidaihe was also where Hu Jintao, the 69-year-old president of China and general secretary of its Communist Party, failed to set up a favorite as his successor early on. Hu had hoped to get Li Keqiang, a confidant of many years and the current deputy premier, designated as his successor.

Instead, the party's old guard, whose members are loyal to former General Secretary Jiang Zemin, have seen to it that Vice President Xi Jinping, 59, will become the party's new leader this October and China's president in the spring of 2013, and that Li will work under him as China's premier.

A Country Reaching Its Limits

China's new leadership will face enormous challenges. The last five years have seen economic growth drop by roughly half in the world's manufacturing giant. New instances of social unrest continue to flare up around the country. Recently, locals in southwestern China even managed to stop the construction of a heavy metals factory that would have hurt the environment.

For years, China's one-party dictatorship even won admirers in the West, and everything seemed to be going according to plan for its Communist Party. But, now, it's precisely the fact that the country isn't based on the rule of law that threatens to bar it from even greater success. If the party wants to transform the nation from a cheap-goods factory into a high-tech laboratory, it must have the courage to make political reforms. More specifically, it needs to limit the power held by state-owned enterprises and allow creative private companies more freedom and legal security.

China is also reaching its limits in terms of foreign policy. Neighbors such as Vietnam and the Philippines are turning to the US for protection against their larger neighbor as it attempts to lay claim to the entire South China Sea. In mid-July, Japan temporarily recalled its ambassador from Beijing in response to rising tensions over a disputed group of islands.

There are certainly plenty of reasons to start a public debate on China's future -- yet there's nothing that Beijing fears more. The country's leaders, always worried about maintaining stability, are increasing their control over Internet use in the country. A new points system is designed to intimidate users of Weibo, a Chinese analogue to Twitter. A user determined to be blogging politically incorrect content loses points and ultimately risks having his or her user account deleted.

At the moment, the authorities are been particularly zealous about censoring any online content that touches on the power struggle taking place among leaders in Beijing. For example, entering "Xi" -- the future president's family name -- into a search engine immediately yields an error message. The government's motives were perhaps best -- and unintentionally -- revealed when Beijing recently placed the word "zhenshi," or "truth," on its list of banned words for several days.

Problems with Transition

Even here in Beidaihe, locals can only make guesses about exactly what their leaders are discussing. "I've never actually caught sight of any of them," says a man in charge of changing rooms and showers on the beach. "Only my father-in-law once saw Mao, when he went out for a swim."

The fact that the leaders distance themselves from the rest of the population only serves to increase the murmurings among curious onlookers. Twice in one day, for example, ambulances entered the off-limits area occupied by the politicians, firing speculation that some of the older comrades might be having trouble with the hot weather.

Elderly party members, in particular, use the summer break to stir up memories. For example, just before this summer season began, Li Peng, re-emerged in the public eye with the publication of a collection of his old speeches and essays.

The 83-year-old former prime minister, whom many hold responsible for the government's bloody crackdown against demonstrators in Tiananmen Square in 1989, appears to be attempting to protect his family's business interests under China's new leadership. His daughter heads one of the country's largest power companies.

Indeed, the jockeying for government posts currently taking place in Beidaihe is not only about political power, but also about economic interests. The Politburo Standing Committee will decide who gets the best positions. It currently consists of nine members, but aside from the new governing partnership of Xi Jinping and Li Keqiang, age will be forcing all of its current members to retire and be replaced this fall. Even the party's leader, first among equals on this committee, will have to haggle to reach compromises, as if he were the CEO of China Inc. arguing with its board.

Party leaders are also arguing over how many members the Standing Committee should have. Some seem to favor scaling the committee down and distributing control of the country's security apparatus among several members. Standing Committee member Zhou Yongkang currently holds complete control over this area, even though there were recent rumors that he had contemplated a coup.

Money and the Political Elite

One significant maneuver in this power struggle came this spring, when leaders in Beijing put a halt to the ambitions of Bo Xilai, the popular party chairman of Chongqing, who had hoped for a position on the Standing Committee. Once feted as a "red crown prince" because of his status as the son of one of the country's revolutionary heroes, Bo sparked a building boom in his city, creating the highest economic growth in the entire country. He also had residents of Chongqing gather in the city's parks to sing revolutionary songs from Mao's day as part of his efforts at combating the widening gap between China's rich and poor.

There are rumors that the Communist Party is holding the ousted politician at a military hospital in Beijing. Meanwhile, the question of how and on what grounds to permanently end Bo's political career is probably causing a few more headaches for party leaders gathered in Beidaihe. The scandal surrounding Bo's wife, who has been accused of illegally moving funds abroad and having a British business partner murdered, is drawing attention to other corrupt individuals among the elite, as well.

Party leaders and their families control important economic sectors in China. Hu Haifeng, son of the current president, has long been head of Nuctech, a company that supplies airports and train stations with luggage security scanners. Premier Wen Jiabao's son successfully runs multiple satellite-communication companies, while Wen's wife has made a fortune in the jewelry business. According to calculations by the American news agency Bloomberg, being well-connected in this way has helped the extended family of incoming party leader Xi accumulate assets worth some €297 million ($360 million).

All that bears little relation to Mao's China, whose loss so many here in Beidaihe claim to mourn. The people were worse off in the dictator's day -- but at least almost everyone was equally badly off.

Translated from the German by Ella Ornstein

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