Patrick Brown: China's 'power struggle' is all about the money

It is misleading for the West to view China's impending changing of the guard as a battle between reformers and hard-liners, Patrick Brown writes. This is more a contest among family dynasties and extreme wealth.

One of the reasons that international crises are so difficult to resolve right now is that nobody knows for sure who is going to be occupying the two most important offices in the world in a few months time.

Of the two mighty power struggles taking place this summer, the one in the United States is the easier to understand.

In fact, the race for the U.S. presidency is the most heavily reported event on the planet whereas, in China, we know almost nothing.

We know the next U.S. president, whether Barack Obama or Mitt Romney, will occupy the Oval Office, but when it comes to China we don't even know what shape the president's office is.

At a guess, it is probably square. Though at this point we're not even sure when its new occupant will move in.

About 2,000 delegates are expected to gather in Beijing for the 18th Congress of the Communist party sometime in "the second half of 2012" to endorse a replacement for President Hu Jintao, whose 10 years in office are up.

The congress is expected to take place in October or November, but an actual date has still not been set, and there have been rumours of a postponement.

China's changing of the guard? The current leadership (from left), Premier Wen Jiabao, President Hu Jintao and Vice-President Xi Jinping, in March 2012. (David Gray / Reuters)

The new president is widely expected to be Vice-President Xi Jinping, who was picked years ago by the party's inner circle. But no one outside that circle knows for sure.

Xi's official visit to the U.S. earlier this year is the closest thing we have to a confirmation that he is indeed the anointed one.

Cascading change

When it comes to China's changing of the guard, the important thing to bear in mind is that any move at the top is accompanied by a cascading change throughout the Chinese bureaucracy.

The true centre of power in China is the nine-member politburo standing committee and this year, seven of the nine members on that committee face mandatory retirement. (One unconfirmed rumour has it that the number of seats may be reduced from nine to seven, which will make the political high-sticking even more intense.)

It is in the competition for those seats, as well as for the 25 seats on the full politburo, the 350-odd places on the central committee, and the millions of government posts in the vast party and government apparatus, that the Chinese political system is at its most opaque.

This is a challenge for anyone trying to report on Chinese politics, as I have been doing for almost 25 years.

Having no primary sources in the inner circles of the party, Western reporters have traditionally resorted to what is known as "reading the tea leaves," which really means relying on gut feelings and gossip.

The closest anyone comes to a reliable political source at the top is a contact with a relative or a former classmate of a politburo member. But information from such sources is usually unverifiable, and can be especially shaky because those people can often have their own axe to grind, and much to lose from sharing accurate details with a foreigner.

Straw dogs

Lacking access, China-watchers often perceive Chinese politics as a kind of Manichean struggle between a dark faction of "conservative hard-liners" and supposedly enlightened "reformists."

In October last year, for example, the Globe and Mail had this to say about two of the main contenders for the vacancies in the politburo standing committee, Bo Xilai, party secretary in Chongqing, and Wang Yang, his counterpart in Guangdong.

"The rivalry between the two men reflects a split within the Chinese Communist party that, no matter how good the party is at presenting a united front to the world, some see as a struggle for China's very soul."

On one side, the paper said, was Bo, the favourite of a powerful faction of hard leftists who "want to see the country's pursuit of growth balanced with a renewed focus on social stability, including more equitable distribution of China's new-found wealth."

On the other side was Wang and free-market liberals "who argue that now is not the time to pause the country's economic and political reforms."

However, the complex and colourful reality was revealed a few months later when Bo Xilai's career unravelled in an unprecedented display of dirty laundry.

Bo's police chief fled in fear of his life to the U.S. consulate in nearby Chengdu; Bo's wife Gu Kailai was accused of murder; and it became known just how much of that new-found wealth he was supposed to be committed to distributing more equally had found its way into Bo family pockets.

Family wealth

The Bo family's money-making saga is no exception. When the late supreme leader Deng Xiaoping steered China towards the robber-baron capitalism, which he amusingly called "socialism with Chinese characteristics," his family was the first to begin building a fortune.

The next president? The betting is it will be Vice-President Xi Jinping, shown here attending the opening ceremony of the World Peace Forum in Beijing on July 7, 2012. (Reuters )

And every single one of China's political families learned from that example.

The office-holder himself does not have to dirty his hands. The system is such that the family name alone is sufficient to open doors to profitable investments, and attract offers from other wealthy people looking for an entree.

President Hu's son, Premier Wen Jiabao's wife and son, former president Jiang Zemin's son, and former premier Li Peng's progeny, have all been involved in highly lucrative business dealings based on their family name.

Details, when published overseas, are censored in China, as was the recent, outstanding piece of journalism by Bloomberg reporters, which revealed that the extended family of presidential heir-apparent Xi Jinping, has business interests and real estate assets of approximately $700 million.

Postings on the Chinese internet about the wealth of officials have the lifespan of fireflies. One such posting, copied and circulated in the few seconds before it was squashed by the censors, listed the assets of half a dozen bureaucrats based on official reports of corruption cases.

What it showed was that the deputy governor of Shandong province, Huang Sheng, led the pack with 460 properties and other assets worth an estimated $9 billion US.

If that's the deputy's take, imagine what the governor himself is getting.

Such people end up in condemned cells not so much for enriching themselves, but for being egregiously greedy, or for being on the losing end of a dispute with more powerful rivals, disputes that are often camouflaged as struggles over political dogma.

There are, to be sure, different currents of opinion within the Chinese Communist party, and a variety of policy prescriptions and views on how best to tackle the enormous challenges of China's dramatic transformation.

But the simplistic idea that there is a wonkish struggle between reformists and hard-liners makes little sense.

The factions and alliances in contention this fall will not be based on policy differences, but on the division of enormous power and wealth.