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CHINA: Stockbrokers Keenest on Communist Congress

Antoaneta Bezlova

BEIJING, Oct 23 2007 (IPS) - When the Communist party of China unveiled Monday its new line up of people that will govern this nation of 1.3 billion and manage the world’s fastest growing economy for the next five years, the only genuine excitement was arguably felt among the business observers of this five-yearly ritual.

China Times – a financial newspaper read by the well-heeled urban elite – enthused about the "market value" of the 17th party congress, describing its achievements in terms of the stock-market frenzy engulfing the country. The value of Chinese stocks has increased six times in the last two years and when the party meeting opened last week the benchmark Shanghai Composite Index shot above 6,000 points for the first time.

"Five years ago when the communist party held its 16th congress, the presence of the country’s stock markets was virtually negligible", the paper said in a front page commentary, " but now China has 25 trillion yuan (3.4 trillion US dollars) value of stock listed on its markets and the volume of shares traded is among the world’s highest."

While the rhetoric at the communist party congress has been all about building a "harmonious society" and redistributing wealth more fairly throughout society, the buzz outside of the power corridors is about trading gold and shares, choosing mutual funds and speculating on property.

Millions of individual investors have poured their savings into China’s bullish markets and they want assurances that new party leaders would do nothing to undercut shares.

"I know little about the new leaders elected to the Politburo this time beyond what newspapers say," says Michael Gao, an avid stock trader. "I don’t mind the secrecy as long as they (the leadership) are business-minded and understand the money culture these days."

Michael, whose day job is coaching tennis, has put all his savings into shares and is contemplating diversifying some of his investments into gold. "Gold is the new fad," he says, "not only because it is profitable but because it could prove less risky if the government changes its market policies".

But drastic changes are not on the newly elected communist party leadership’s agenda for the next five years. At the congress that ended Monday they endorsed the continuation of long-standing policy of economic growth and stability that has been the party’s essential mantra for the last 30 years.

But they also pledged to pay more attention to the downsides of China’s rapid economic expansion, such as rising inequality, a disintegrating social safety net and rampant pollution. Despite efforts to equalise growth among rural and urban areas, rural incomes at 466 US dollars a year, remain less than one-third those of city dwellers.

"China must strive for scientific development by putting people first and making it comprehensive, balanced and sustainable," re-elected party chief Hu Jintao said after introducing his new team to the media Monday.

For the urban poor not trading stocks and for the 700 million Chinese peasants, the party’s new pledges sound little different from the socialist bureaucratic jargon they have grown accustomed to hearing over the years.

"There is nothing I expect from this leadership," says migrant worker Yang Yegang who toils on the building sites of Beijing’s expanding suburbs. "The delegates to the party congress call themselves ‘people’s representatives’ but they live the lives of the privileged."

While ordinary Chinese tend to see the congress as remote from their daily lives, this time around they have been affected by the two-month "safety campaign" waged by the communist leadership.

Obsessed with preventing any kind of social protest disrupting the "tranquillity" of the party meeting, the authorities had mobilised 840,000 volunteers, according to the Beijing Youth Daily, to help the police sweep Beijing streets clean of troublemakers.

"In our neighbourhood it feels like during the days of the communes – all the elderly and everybody out of work is wearing red armbands and watching the neighbours," says Ren Shuhui, who is employed as a maid.

China watchers for their part have been reading the tea leaves, striving to foresee how the country’s new roster of political stars might influence government policy.

Five of the nine members of the Politburo Standing Committee, the country’s top ruling body, are retaining their posts. Hu Jintao, 64, stays on as party chief for another five years. So does premier Wen Jiabao, 65, who remains in charge of the government. Their re-election paves the way for the nation’s parliament to rename Hu as president and military head and Wen as premier at its annual session in March next year.

But two newly promoted provincial leaders and members of the so-called "fifth generation" of Chinese leaders, have been making the headlines in expectations that they would inherit the posts of party secretary and premier in five years time. They are the 54-year-old Shanghai party secretary Xi Jinping, and the 52-year-old Li Keqiang, head of the north-eastern Liaoning province.

Both Xi and Li were born after the communist takeover in 1949. Unlike their predecessors from the "fourth generation" who majored in the technocratic fields, both new leaders studied in the social sciences. Xi holds a degree in law. Li received a PhD in economics from Beijing University.

"They are a product of China’s reform and opening up," says Mao Shoulong, a professor of political science at Renmin University. "Their political careers are not driven by memories of extreme periods like the Cultural Revolution. They are savvy, open-minded and exposed to international ideas".

Xi, who is seen as the top-runner to succeed Hu Jintao, is a party "princeling", or a privileged child of a party elder. His father, Xi Zhongxun, is one of the founding members of China’s Communist Party. Xi shot to prominence earlier this year when he was chosen as a Shanghai party chief after the purge of his predecessor in one of China’s biggest corruption scandals.

Li Keqiang doesn&#39t share Xi’s illustrious background but enjoys the support of current party chief Hu Jintao. Li’s relationship with Hu goes back 20 years since they worked together in the Communist Youth League. His political record though is tainted with scandal. While working as a party secretary of Henan province, China’s largest agricultural province, he did little to contain a spreading AIDS crisis. Up to one million peasants are said to have contracted the disease after selling their blood at virus-spreading collection centres operated by corrupt officials.