by Alistair Nicholas
November 14th, 2012

This year, China has been faced with an age-old political quandary: change or more of the same?

Despite a growing chorus of Chinese reformists and foreign governments calling for the former, the 18th Communist Party of China Congress (CPC), which began last Thursday, so far does not suggest that this week will be the dawn of China’s new day.

The most significant order of business was Hu Jintao’s address, in which the outgoing president promised political reform but ruled out copying Western-style democracy. He lauded the accomplishments of the Party. He stressed the importance of the one-party state and the need to strengthen the armed forces and protect sea territory amid disputes with Japan, South Korea and some Southeast Asian nations.

He also announced goals to double GDP by 2020 and make China’s currency and interest rates more market-based.

China’s heir apparent, Xi Jinping, will be the first leader in three decades to preside over single-digit growth (projected now at 7.4% in a country where anything south of 7% qualifies as recession). Rather than allay concerns through meaningful demonstrations of economic reforms this week, the government has focused on deflating arguments surrounding economic stagnation.

“Starting from August, the turn toward a slower economy has been effectively curbed,” Zhang Ping, the chairman of the National Development and Reform Commission (NDRC), told a press conference over the weekend, as reported in The New York Times. “From the October economic data, we can see that the trend toward a rebalancing of the Chinese economy is all the more obvious.”

Independent observers, however, are sceptical, noting that rebalancing any economy — particularly the second largest in the world — takes a little more time.

If one item was more top-of-mind than the economy, the wake left by the Bo Xilai scandal ensures that it is corruption. Hu did not attempt to dissuade anyone in the Hall of its threat. Rather, he warned corruption could trigger a collapse of the party and the demise of the country.

“Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut and long-term political commitment of the party,” he added.

In a land where power and money usually are joined, unraveling deep levels of corruption and nepotism is seen as nearly impossible without broad reforms. And those have been missing thus far in the Party’s deliberations.

Furthermore, monolithic China has come across as slightly less monolithic than previously presumed. The day after Hu called for reform of State-owned enterprises (SOEs), leaders of the largest of the leviathans — the subjects of ridicule for corruption, monopolisation and nepotism here — defended themselves against charges that their firms are in urgent need of reform. And Hu seemed to show that the Party would continue to stand by them, calling for increased investments in the state sector.

China-watchers wanted broad change and, apart from a new leader, it looks unlikely this will occur in the next week, or even the next year. Ultimately, China is about rule by consensus and we won’t know what the consensus on reform is until we see the makeup of the incoming Politburo members.

On that, all we can say for the time being is: stay tuned.

Alistair Nicholas is executive vice-president, Asia Pacific, at Weber Shandwick

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