Talk of rift as China's Communist Party meets

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Under intense internal and external pressure to deal with the question of political reform, China's ruling Communist Party gathered in Beijing and tried to shift the focus back to its five-year plan for ensuring more even growth in the world's second-largest economy.

The distractions, however, continued to pile on even as the conclave opened, with more than 100 intellectuals and activists distributing a new open letter calling for the release of imprisoned Nobel Peace Prize winner Liu Xiaobo.

There is also growing talk of a rare rift within the nine-member Politburo, with Premier Wen Jiabao speaking out repeatedly in recent weeks about the need for political reform, only to have some of his remarks censored by the same government he heads.

Though little news emerged from the first hours of the four-day gathering of the party's powerful Central Committee, the official Xinhua newswire suggested that "fairness" and "inclusive growth" will be themes of the coming five-year plan, which is also expected to set an annual target for the expansion of the national economy of 7 or 7.5 per cent for the years 2011-2015.

According to state media, inclusive growth means an attempt to deal with the income gap in the country, which has widened to dangerous levels. The World Bank reported in 2009 that the Gini coefficient, a measure of income inequality, in China had pushed past the warning line of 0.4 to 0.47. The country has seen an upsurge in labour unrest in recent months that shut foreign factories and forced the government to reconsider its previous emphasis on economic growth at almost any cost.

"Inclusive growth refers to taking into account other factors, not just economic growth, but environmental impact and the impact on people's lives," said Rosealea Yao, an analyst at Dragonomics, a Beijing-based research firm. "You're going to see more spending on social services."

It's not clear what impact a lower growth target will have on China's economy, which in recent years has routinely exceeded 8 per cent annual targets to post double-digit expansion, but it's believed that the leadership favours some cooling. The country's gross domestic product has grown 90-fold since late leader Deng Xiaoping began introducing economic reforms in 1978, and this year surpassed Japan's to become the second-largest in the world after the United States.

Much of that growth, however, has relied on cheap labour, an asset called into question by the recent spate of strikes. The country's social safety net has also fallen into disrepair over the same three decades, leaving hundreds of millions of Chinese with little in the way of pensions or access to affordable health care, dampening efforts to promote domestic consumer spending.

The five-year plan will be finalized by the end of the Central Committee plenum (which has 204 members and 167 alternate members), but will not be published until it is passed by China's rubber-stamp parliament, the National People's Congress, next March.

In addition to finalizing the five-year plan, the Communist Party is expected in the coming days to make clear the shape of its leadership after Mr. Wen and President Hu Jintao retire in 2012. Vice-President Xi Jinping is expected to be named to the country's Central Military Commission, the last step in securing his power base before his assumed rise to the presidency in 2012.

If Mr. Xi, who was expected to receive the same promotion a year ago, isn't given a military position, it might suggest disagreement within the Politburo over who the next generation of leaders should be.

Mr. Xi is seen as affiliated with the Party's conservative "royalty" - his father was head of the Communist Party's propaganda department, and later vice-chairman of the National People's Congress - which might put him at odds with Mr. Wen, who in recent weeks has mentioned the need for political reform in at least seven separate addresses.

While Mr. Wen is arguably the most popular politician in the country, it's not clear how much support he has inside the Politburo or the Central Committee. He has referred to "resistance" within the party in his attempts to push reform, and crucial chunks of his recent speeches have been ignored by most of China's state-controlled media.

The Premier was given a boost this week when 23 party elders released a letter backing Mr. Wen and calling for the government to end its "embarrassing" practice of censorship and to allow freedom of speech. On Friday, the independent-minded Southern Weekend newspaper became the first major media outlet in the country to publish the full text of Mr. Wen's recent interview with CNN, during which he said "the people's wishes for and needs for democracy and freedom are irresistible."

Another open letter, signed by more than 100 activists, was released Friday calling for Mr. Liu to be released from his prison in Liaoning province, where he is serving an 11-year jail term for "inciting subversion" for his role in drafting the pro-democracy manifesto known as Charter 08. The letter also called for his wife, Liu Xia, to be freed from the house arrest she was placed under following the Nobel Prize announcement so that she can travel to Oslo to collect the award on her husband's behalf.