China must continue with political and economic reform if it is to maintain its growth trajectory. When outgoing Chinese Premier Wen Jiabao addressed the media after the conclusion of the annual session of the National People’s Congress last month, he literally dropped a bombshell. Wen said: “New problems have cropped up in China’s society which will not be fundamentally resolved and such historical traged[ies] as the Cultural Revolution may happen again”. The mere mention of the Cultural Revolution sends shivers down the spines of most, whether they be high-ranking Chinese leaders or prominent businessmen in Hong Kong. Wen obviously knew that he was touching a raw nerve in mentioning the Cultural Revolution – an episode in recent Chinese history in which the Chinese Communist Party played a vital role. Most of today’s successful Hong Kong businessmen (including KS Li & Henry Tong Ying-Yen) relocated to Hong Kong before or during those traumatic years between 1966-76. The suggestion of a return to that type of chaos wasn’t exactly music to their ears. Wen also mentioned the late reformer and Party leader Deng Xiaoping, and stressed that as a remedy for the past, China needs a “successful political structural reform [and without which] it would result in losing the economic gains we have made”. Cynics would brush this off as lip service to liberals hoping for change and an effort to quiet the international community. But the mere mention of a problem within the Party that endangers the “harmony” is rare indeed. This clear declaration did sound warning bells to those who are optimistic about the opening up of the political sphere, an area that had not received much attention from the central government for many years. Hong Kong insiders are already uneasy with rumors that the incoming new President Xi Jimping is unlikely to have the same patience with the city as his predecessors did. The election of the new Chief Executive who is more ready to obey the Central Government, than to continue the interests of the business community, has fueled speculation. So Wen’s speech may be a warning that a new hard line conservative may be waiting in the wings. Already there is talk about moving assets and companies to other locations, due to fears regarding the stability of the Central government. Everyone agrees that China’s continued prosperity can only continue if the political system and atmosphere are healthy and stable. Events have shown that Wen’s speech may have been a result of a power struggle with Bo Xilai, who was building up a conservative agenda inside the party. Although due to the recent scandal it is now clear that Bo Xilai will never become a political force, a real life drama has emerged that eerily resembles “Red Corner”, a film that starred Richard Gere. Yet the most important question remains whether China will now have the courage to finally lead the charge with much-needed political reform, an action that will finally put the ghosts of the past to rest.
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