NightWatch-For the night of 8 November 2012 wrote:China: President and outgoing Secretary-General if the Communist Party Hu Jintao told the opening session of the 18th National Party Congress, "If we fail to handle the corruption issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state."
The reform of the political structure," he said, "is an important part of China's overall reform." "However," he added, "we will never copy a Western political system."
On this issue, Cai Mingzhao, a spokesperson for the party congress, emphasized to reporters the limits of political reform that the Party is willing to consider, stressing that any measures would maintain its firm leadership. Reforms, he said, would combine "centralism and democracy, discipline and freedom, and unity of will and peace of mind".
Comment: Hu's suggestion that corruption could cause the collapse of the party and the fall of the state is extraordinary for several reasons. In Communist lore, the corruption of the Kuomintang - the nationalists-was responsible in large measure for the Communist takeover of China. Secondly, Hu implies that the expulsion of regional party leader Bo Xilai involved a much more serious threat to the Communist system than just the removal of a corrupt regional head. Hu's statement suggests China survived a near-existential threat.
Finally Hu implied that the Chinese Communist leaders are aware that they have been skirting the limits of political reform within the Communist system and revolutionary change to a more Western style of democracy. The leadership sees one or more scenarios in which Communist China could collapse.
NightWatch judges that there are so many contradictions and fault lines in the jerry-rigged communist system that violent, revolutionary upheaval could begin with little additional warning at almost any time. China might even fragment into Muslim and non-Muslim states. Hu's speech indicates the leaders are aware of some of the threats.
The Party leaders have decided that China's political system will remain Communist, centralized, disciplined from the top-down and un-Western. Experts who expected China could not resist the pull of increasingly greater political openness in a semi-capitalist economy have misread badly the Communist leadership.
Some comments are on Economic situation which I am posting in the Chinese Economy thread.