Paranoid about the 'anti-China containment policy' supposedly spearheaded by Washington, the Chinese Communist Party (CCP) is building bridges to non-Western regimes in Russia, Cuba, Yugoslavia and Vietnam.

On the fronts of both economic and political reform, however, solid movements are in the offing.

A top priority for the first few years of the millennium will be preparing the nation for accession to the World Trade Organisation (WTO). Premier Zhu Rongji has set up a high-powered committee within the State Council to help officials and cadre-managers meet the WTO challenge.

The WTO tutors will coach cadres on how to maximise the benefits of world trade and minimise disruptions to native industry and agriculture.

Yet Mr Zhu's key message will be that China must speed up its integration with the marketplace.

Henceforward, the market - and in many ways norms set by the Western powers - and not the party, will set the agenda for change.

'Even after Deng Xiaoping took the helm of the nation, the course of reform has been affected by the whims of top cadres,' said a member of a Beijing-based think-tank. 'Hence Deng's famous slogan about 'crossing the river while feeling out for the boulders'.

'To an extent unimaginable before, the market, not the CCP leadership, will lay down the rules of the game.' For example, the market - in this case the stock market - will play an increasingly big role in the reform of state-owned enterprises (SOEs). This is the gist of instructions Mr Zhu has given the past month on SOE reforms.

The premier pointed out in internal meetings that after an SOE has gone public, its management will be forced by shareholders - who will include private and foreign firms as well as individual investors - to boost productivity.

The premier saw as his major task for the early 2000s the creation of a bull market and the perfection of rules relating to the listing and trading of stocks.

Even more astounding, however, is the recognition among a growing group of forward-looking cadres that the WTO will provide a much-needed impetus for political reform. Earlier this month, six vice-chairmen of the Chinese People's Political Consultative Conference (CPPCC) wrote to the party leadership on reviving the Deng doctrine that economic reform must be implemented in lockstep wth political change.

It is understood that premier Zhu, usually considered a conservative on ideological matters, has seconded the proposal.

Analysts say there are two reasons why many top officials seem willing to consider at least a moderate level of political reform.

First, reforms including retooling SOEs and trimming the bureaucracy have in the absence of political liberalisation run into intractable problems. It is precisely because of a loss of momentum in reform that Zhu and company have decided to play the 'WTO card': using 'outside forces', mainly the international marketplace, to speed up structural change at home.

The kind of reform required to make the mainland economy WTO-compliant, however, has run into heated opposition from holders of vested interests including bureaucrats, managers, workers and farmers.

'For the country to move forward, Zhu realises more economic and political powers need to be given to the upwardly mobile sectors, or players who can make a go of market forces,' a party veteran said.

'Those with market savvy will be the pillar of the economy whose support the party requires to stay in power. This transformation, however, involves a re-distribution of resources that is only possible with real political reform.' At least one think-tank under the Central Committee is studying the prospects of political reform in the new millennium. 'It is unlikely the party will bring about Western-style democracy such as universal elections or multi-party politics,' the party veteran said.

But there is an increasingly popular view that the minimum will be for the party to beat a retreat not just from the economy but from areas including the judiciary. Market-oriented firms can hardly flourish given the perpetuation of party control of SOE management as well as the law-enforcement process. And corruption - the bane of economic and political life - will only get worse.

Is the CCP leadership willing to make the ultimate sacrifice of curtailing its own power? Doubters have cited evidence of retrogression rather than progress: for example, power-grabbing efforts by Mr Jiang and fellow members of the Shanghai Faction.

These dynasty-building moves, however, might be the conservatists' last stand. Relatively open cadres such as the CPPCC vice-chairmen know that only one choice is available to the party: open up the system and give the market - and its nouveau riche players - more leeway.

Progress along this road means even while the CCP will gradually lose its monopoly, it will remain a viable force in the coming decade or two. The party can at least perform the task of ensuring fair play in a burgeoning marketplace.

The opposite course - shoring up the Leninist state apparatus at the expense of change - may help the party uphold its near-absolutist authority for several more years. Yet the price to pay could be the CCP's obsolescence - and total rejection by the people.

The CCP made history in the 20th century largely by seizing power - and exercising it in often misguided ways. Its mission in the new century is much simpler: give up power, and let the market take over gradually.

Willy Wo-Lap Lam is a Post associate editor