China Considers Delay of Key Party Congress

Top leadership of the Communist Party of China at the National People's Congress. The annual meeting began on March 3, 2012., a photo by Pan-African News Wire File Photos on Flickr.

Exclusive: China considers delay of key party congress: sources

5:28pm EDT
By Benjamin Kang Lim and Nick Edwards

BEIJING (Reuters) - China's ruling Communist Party is seriously considering a delay in its upcoming five-yearly congress by a few months amid internal debate over the size and makeup of its top decision-making body, sources said, as the party struggles to finalize a once-in-a-decade leadership change.

The two most senior posts, of president and premier, are not considered in much doubt. But any delay in the congress, no matter the official reason, would likely fuel speculation of infighting over the remaining seats in the nine-member politburo standing committee which calls the shots in China.

The makeup of those remaining positions could in turn influence the ability of the incoming new president, Xi Jinping, to forge a consensus among those immediately below him on how to run the world's second-largest economy and a military superpower.

Delay could also further unnerve global financial markets whose perception of Chinese politics as a well-oiled machine has already been shaken this year by the extraordinary downfall of an ambitious senior leader, Bo Xilai, in a murder scandal.

The top party leaders are considering a proposal to move the 18th congress, originally scheduled for September or October, to between November and January, three sources said, in a step that has been taken twice before in the past five congresses.

The delay would primarily aim to shorten the transition for the new leaders, who will be announced at the congress but are not due to start in their new state roles until March 2013, said the sources, who all have knowledge of the party's deliberations.

One source said a delay would also give time for debate over the size of the standing committee, with current President Hu Jintao's allies wanting it cut to seven, of which they would likely hold a majority, and others wanting it expanded to 11 to accommodate rival factions.

"Preparations for the 18th congress have not been completed. (The party) is considering putting off the 18th congress until winter," another of the sources said.

Chinese political scientist Liu Junning said a delay would signal that the downfall of Bo, once seen as a strong candidate for the standing committee, had forced the party to take time out to deal with the political fallout.

"If the party congress were delayed, it's to (decide) how to deal with the legacy of Bo Xilai," Liu said.

"It's like dinner being put off because cooking was abruptly disrupted and (the party) had to attend to other matters. Now it's back to cooking," Liu added.

The State Council Information Office, or the cabinet, and the Communist Party spokesman's office, declined to comment.

POLITICAL SCANDAL

Bo was sacked as leader of China's biggest municipality, Chongqing, in March and suspended from the politburo last month after his wife, businesswoman-lawyer Gu Kailai, emerged as chief suspect in the poisoning of a British expatriate businessman, Neil Heywood, who was once a family friend of the Bo household.

Trouble for the charismatic Bo began in February when his Chongqing police chief, Wang Lijun, sought asylum in a U.S. consulate, apparently afraid for his life after confronting Bo with evidence of his wife's involvement in Heywood's death, sources familiar with the police investigation have said.

Wang left the consulate into the custody of central government officials. His actions led to an official effort by Beijing to publicly discredit Bo, a "princeling", whose father was a close ally of late paramount leader Deng Xiaoping.

Bo's political elimination has opened the way for fresh jockeying among rival candidates for the standing committee, interrupting what is usually a carefully choreographed process.

The new standing committee members will start in their new roles during the parliamentary session in March, when the cabinet will also undergo a sweeping reshuffle.

By delaying the congress, the sources said, the new leaders would have to wait only two to four months between the news of their appointments and the time they start in their new roles, compared with up to six months if congress convenes on schedule.

A delay could also give Premier Wen Jiabao more time to see through some urgent, unfinished reforms.

Sources close to the central bank and securities regulator have said they see a window of opportunity this year to push through small reforms already agreed, such as providing more direct access to capital markets and making it easier to move foreign currency in and out of China.

Skeptics say it is hard to see Wen delivering a flurry of far-reaching change in his remaining months in charge after nine years in power with little to show on the reform front.

One long-time and well-connected U.S.-based investor in China said there were two ways to interpret a congress delay.

"One is to say that the leadership is in turmoil and that China is fighting a serious challenge to reform. That will be quite upsetting to the markets, as it may be seen as a challenge from the like-minded allies of Bo Xilai," he said.

"The second interpretation is that China is trying to cope with the challenges posed by the shift in the global economic order and does not want to move rashly. That is not positive for markets, either," said the investor, who declined to be named.

The new leadership line-up is likely to be hammered out around July or August when incumbent leaders and party elders go to the beach resort of Beidaihe for their annual informal gathering to discuss personnel and policy in secluded, tightly guarded villas.

(Editing by Don Durfee and Mark Bendeich)