THE DOWNFALL OF Chongqing Communist Party boss Bo Xilai and the arrest of his wife Gu Kailai on suspicion of murdering British businessman Neil Heywood has caused political turmoil in China, highlighting a rift between the economic liberals and the old-school conservatives at the top of the party.

But ultimately the incident is expected to bring about stability because it paves the way for the factions in the politburo to get on with the business in hand – organising the 18th Party Congress which will secure the handover of power from president Hu Jintao and premier Wen Jiabao to their anointed successors, Xi Jinping and Li Keqiang.

Last week, Bo was kicked out of the politburo for “serious discipline violations” and his wife was “strongly suspected” of murdering Heywood. There is a lot of mystery about what exactly happened, and everyone is intrigued as to what the next steps will be.

However unsettling the Bo saga has been, it nevertheless clears the way for the new leadership to take over the reins of a more unified party.

Bo was a maverick and, while he was popular among the people, he was never particularly good at playing the factions in the party, analysts said. He could have had a divisive impact if he did get into the standing committee of the politburo, as was looking likely.

His “Chongqing model”, which favoured old-style state spending and low-cost housing and infrastructure projects using local government money and debt, flew in the face of the new lower-growth model on which the government is focused.

The new leadership is expected to focus on developing domestic consumption while keeping inflation in check, and also keeping government debt from getting out of control.

Bo’s purge, while unsettling in the short-term, will sit easier with the government’s long-term objectives.