Bloomberg News

Bo Ouster Undermines Chongqing Model

March 15, 2012

Bo Xilai, then Chinese Communist Party secretary of Chongqing, at the closing ceremony of China's National People's Congress in Beijing. Photographer: Nelson Ching/Bloomberg

Bo Xilai, then Chinese Communist Party secretary of Chongqing, at the closing ceremony of China's National People's Congress in Beijing. Photographer: Nelson Ching/Bloomberg

Bo Xilai’s removal as head of a city that helped lead China’s economic growth is a signal that the country’s Communist leadership wants to keep his style of populism out of the inner corridors of power, sticking to a consensus-driven government that emphasizes gradual change.

Bo, 62, fired yesterday by the party as head of Chongqing Municipality and replaced by a North Korea-educated vice premier, stood out in a Politburo that seeks consensus. His leadership style in the city of about 30 million emphasized a revival of songs and slogans from China’s Maoist past. This week, his strategy drew a rebuke from Premier Wen Jiabao.

With a once-a-decade leadership change coming later this year, the party elders may have sought to keep Bo from advancing to the Communist Party’s Politburo Standing Committee. The nine- man body, which exercises supreme authority in China, would have been altered by Bo’s independence, resulting in a leadership split in the world’s second-biggest economy, said Nicholas Bequelin, a China researcher for Human Rights Watch.

‘A Maverick’

“Bo was definitely too much of a maverick,” Hong Kong- based Bequelin said. “If you had put him in the Politburo Standing Committee it would have opened up a new era of competitive politics, and that is not what the party likes.”

The challenge, highlighted by Wen on March 14, is to overhaul China’s political system without resorting to campaigns such as Bo’s anti-corruption drive in Chongqing. That resulted in hundreds of arrests yet also drew criticism from legal experts including Peking University professor He Weifang who were concerned that legal procedures were being trampled.

Wen said in a press conference on the final day of the National People’s Congress in Beijing that without political change, China risked a return to the 1966-1976 Cultural Revolution. During that time, mobs of Red Guards worshiping Chairman Mao Zedong persecuted millions, including party cadres.

Bo won national attention for his success in cracking down on organized crime and for his “Chongqing Model” of emphasizing state-led investment to ease wealth gaps between urban and rural residents. Meeting with reporters on March 9 in Beijing, Bo revealed China’s wealth gap as measured by the Gini coefficient was at a level that social scientists say sparks unrest. He evoked Mao in vowing to reverse it.

Socialist Society

“As Chairman Mao said as he was building the nation, the goal of our building a socialist society is to make sure everyone has a job to do and food to eat, that everybody is wealthy together,” Bo said. “If only a few people are rich, then we’ll slide into capitalism. We’ve failed. If a new capitalist class is created then we’ll really have turned onto a wrong road.”

Vice President Xi Jinping, in line to succeed President Hu Jintao, invoked earlier Communists -- Karl Marx and Vladimir Lenin -- in arguing that the Communist Party needed to “resolutely oppose all erroneous political tendencies contrary to the party’s basic line.”

“We must preserve party unity and firmly oppose all behavior that splits the party,” Xi said in a March 1 speech at the Communist Party School in Beijing. The speech was released hours after Bo’s firing in the party journal “Seeking Truth.”

Decisive Turn

On March 14, before Bo’s firing, Wen told reporters one floor down from where Bo spoke at Beijing’s Great Hall of the People that China in the late 1970s had taken a decisive turn away from the politics of the Cultural Revolution. He then spoke of Chongqing and the political events that culminated in former Chongqing police chief Wang Lijun spending a night last month at the U.S. consulate in Chengdu, Sichuan, prompting speculation he was seeking asylum.

“The current party committee and government in Chongqing must seriously reflect on the Wang Lijun incident and learn lessons from that incident,” Wen said. “What has happened shows that any practice that we take must be based on the experience and lessons we have gained from history.”

Zhang Dejiang, 65, a graduate of Kim Il Sung University in North Korea, will replace Bo in Chongqing, the official Xinhua News Agency reported yesterday, citing the Communist Party’s Central Committee.

‘Knee-Jerk’ Reaction

Zhang, a native of northeastern Liaoning province, rose to prominence under former President Jiang Zemin. As vice premier and Politburo member, he is in charge of areas including industrial production, transport and energy, according to Xinhua. He has also met foreign business leaders including International Business Machines Corp. (IBM:US) Chief Executive Officer Virginia Rometty, who joined him last month in China’s leadership compound in central Beijing.

“First, we must clearly and firmly uphold the party’s leadership,” Zhang told Chongqing leaders yesterday, according to a report in the official Chongqing Daily newspaper.

Chongqing, which sprawls over an area the size of the U.S. state of South Carolina, is one of China’s fastest-growing regions. Annual economic growth has exceeded 10 percent for a decade, including a 17.1 percent expansion in 2010 and 16.4 percent in 2011.

Some Chongqing-related shares, including Chongqing Brewery Co. (600132) and Chongqing Changan Automobile Co. (200625), the partner of Ford Motor Co., fell after the announcement in what Wang Zheng, Shanghai-based chief investment officer of Jingxi Investment Management, called a “knee-jerk” reaction. Chongqing Brewery fell by as much as the 10 percent daily limit in Shanghai to 32.91 yuan, closing at 33.56 yuan, an 8.2 percent decline.

‘Almost Zero’

After yesterday’s announcement, a Communist Party website still listed Bo as one of the 25 members of the Politburo. Wang Lijun was removed as vice mayor of Chongqing, Xinhua reported.

“Before the Wang Lijun incident, it was the consensus within the party that Bo is the top candidate for the next Politburo Standing Committee,” said Ding Xueliang, a professor of social science at the Hong Kong University of Science and Technology. “Right now Bo’s chance is almost zero.”

Bo was seen March 14 in Beijing at the closing ceremony of the meeting of the people’s congress. On March 9, in his meeting with reporters, he said he wasn’t a target of a government probe into Wang and apologized for drawing so much attention to himself.

A Princeling

“I feel like it came out of nowhere,” Bo said of Wang’s consulate visit. “It looks like that in any place, no matter how good the situation is, we have to be alert and be prepared to prevent unexpected things from happening.”

The last time a Politburo member lost a top post was in 2006, when Shanghai Communist Party Chief Chen Liangyu was removed and replaced by Xi Jinping, who is now in line to become China’s next top leader.

Bequelin said Bo’s firing may have bigger ramifications than Chen’s because it involves the offspring of one of the country’s founders, a so-called princeling. Bo’s father, Bo Yibo, was one of the eight “immortals” who helped shape Chinese politics after Mao’s death in 1976.

The younger Bo rose from being the mayor of Dalian to become governor of northeastern Liaoning province before moving to the commerce ministry, where he oversaw trade ties with the U.S. from 2004 through 2007. In 2007, he secured a spot on the Politburo and became the top official in Chongqing, according to his official biography.

“Bo was able to tap into parts of the polity that other Chinese leaders can only dream about,” said James Green, a former official focusing on China in the U.S. State Department and National Security Council who now works for Washington-based consultancy Albright Stonebridge Group. “Will this move only feed the existing deep cynicism about the ruling class, that a popular leader ran afoul of the wrong leaders?”

To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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