“Without political reform, economic reform cannot succeed” – Chinese Premier Wen Jiabao

March 14, 2011

The two leader’s statements highlight the challenge facing the Party as it tries to make itself more responsive to an increasingly urgent and complex array of social grievances, while trying to maintain its monopoly on power and suppress organized political opposition. The government has been spooked in recent weeks by anonymous online calls for people to emulate Tunisia’s “Jasmine Revolution” with protests in several major cities.

“Nothing in this world is immutable,” Mr. Wen told a news conference. “Without political reform, economic reform cannot succeed and the achievements we have made may be lost.”

In contrast to some countries in the Middle East and North Africa, Mr. Wen said the Chinese people had seen their government responding to social grievances. But he expressed particular concern over inflation and corruption—two issues that are fuelling unrest across the Arab world.

“The biggest danger now is corruption,” he said. “If we are to address the people’s grievances and fulfill their wishes, we must create conditions for the people to criticize and supervise the government.”

He added, however, that political reform “requires a stable and harmonious social environment and needs to be taken forward in an orderly way under the leadership of the Party.”

His comments echoed similar appeals that he made last year, first during a speech in August in the southern city of Shenzhen—cradle of China’s economic reforms—and then again in a rare television interview with CNN in September.

Those remarks were carried only selectively by Chinese state media, raising speculation that the premier was being censored by the Party’s own propaganda outlets for taking a position that hadn’t been endorsed by the rest of the Chinese leadership, including Party chief and President Hu Jintao.

Some Chinese and foreign political analysts suggested at the time that the apparent conflict could feed into a once-in-a-decade leadership change next year, when Mr. Hu and at least six other top leaders are due to retire from their Party posts.

Since then, however, most analysts have concluded that Mr. Wen is referring only to limited in-Party political reform which has the support of most of his peers, and is designed to strengthen the Party’s grip on power, rather than weaken it.

Mr. Wu—the parliament chief who technically out-ranks Mr. Wen—struck a more emphatic note in a speech to the NPC on Thursday in which he ruled out ever adopting a Western political system based on the separation of powers and multiparty elections.

“If we waiver… the fruits of development that we have already achieved will be lost and the country could even fall into the abyss of civil strife,” he said.

Analysts say China’s leaders appear to have frozen plans to extend to higher levels of government the direct elections for village chiefs that were introduced in 1988 and are now conducted nationwide. But they are increasingly exploring ways to make the Party more transparent, accountable and responsive to social problems, particularly by trying to harness the power of the Internet.

Mr. Wen also expressed concern about inflation, which has remained relatively high at 4.9% in both January and February despite a series of government measures including three recent interest-rate increases. “Inflation is like a tiger; once it gets free, it is difficult to put back in the cage,” he said.

He put much of the blame for the problem on international factors, in particular “some countries” that have implemented quantitative easing policies—a remark aimed largely at the U.S.— creating large-scale fluctuations” in global exchange rates and prices of goods.

Another factor he cited was the recent unrest in the Arab world, which he said had helped to push the oil price over $100 a barrel.

Mr. Wen reiterated that China will prioritize the fight against inflation this year. But when asked if its response would include a more rapid appreciation of the yuan, he stressed gr

adualism. The U.S. argues that a stronger yuan is in China’s own best interests as it would help combat inflation by reducing the cost of imports in local currency terms.

“We will further increase the flexibility of the [yuan] in accordance with market demand,” he said. “But at the same time we must keep in mind that this kind of appreciation is gradual, because it relates to employment and to what companies can bear. We must maintain social stability.”

source wsj online