Momentous change often comes wrapped in the garments of tradition in communist China. So it has been at the fifteenth party congress in Beijing, where the main announcement has been that state-owned companies may proceed with novel forms of ownership which could lead to mass privatisation. This is not new policy, since it has been anticipated by substantial changes throughout the main provinces in China. It was announced in a long speech by the president, Mr Jiang Zemin, with a daunting title drawn from the nether reaches of bureaucratic prose. But it signals a decisive shift in China's economic reform programme, which will have many implications for its society and politics.
It is estimated that some 30 per cent of China's 124,000 state enterprises are losing money. Many millions of workers could lose their jobs, opening up the prospect of protest movements and therefore of political instability. But observers believe the timing of the announcement is well-chosen. Growth is buoyant and there are many examples of new forms of ownership which have turned companies around and secured employment. There is little or no evidence of a national rank-and-file trade unionism that might challenge party control, with most protests directed against local injustices and aberrant managements.
But another theme of the congress, corruption in senior party ranks, has been talked about quite openly and could prove as subversive of party control as more co-ordinated political opposition. As President Jiang put it, "our party can never be daunted and vanquished by any enemy. But the easiest way to capture a fortress is from within, so in no way should we destroy ourselves. If corruption cannot be punished effectively, our party will lose the support and confidence of the people". It is a huge issue, which will strain the communist system's legitimacy to the limits in coming years. There are many opportunities for corruption as managements take over plants with the aid of share option schemes and loans from provincial and local banks throughout the vast country.
A slogan has been produced to justify the changes. It says that forms of ownership do not matter so long as taxes are paid and development proceeds. There has also been reference to the primary stage of socialism, a phrase associated with Mr Zhao Ziyang, the former party leader disgraced for taking the side of the student movement in Tiananmen Square crushed in 1989. Yesterday he was reported to have written to the party leadership calling for a review of those events. There are very few signs of a willingness to do so at this congress, which must chart a course for the new century. Political change will assuredly arise from the new ownership provisions endorsed this week, although it may take years to unfold.
The Communist Party remains a large organisation, with some 58 million members and with sole responsibility for directing political life in China. Although its procedures are highly formalised on these occasions, it is capable of taking large-scale decisions, with immense consequences for most Chinese citizens. The elections to the most senior party positions at the end of the week will be scrutinised closely for evidence of winners and losers in factional battles and for whether strong leadership can keep such fissiparous tendencies in check.