Speaking to the South China Morning Post, Mr Shang said the stagnation that marked the years under former president Jiang Zemin were continuing, while rapid economic development, especially following the mainland's accession to the World Trade Organisation, had put great strain on the political structure.

Mr Shang, who was trained in Marxist economics and has now retired from the economics department of Peking University, believes the political system is the superstructure of the economy and that the two must change together. He says tension arises when political reforms fall behind economic liberalisation.

He says this has already been reflected in rampant corruption across the nation and in the widening gap between the rich and the poor, between the coastal region and the hinterlands and between the cities and countryside.

Mr Shang, 71, who grew up in Shanghai and joined the communist army as a boy soldier, says he is sickened by the increasing desperation of the rural population under crushing tax burdens and a lack of protection of their most basic rights.

'China is sitting on a volcano,' he warned.

He said the new leadership under President Hu Jintao and Premier Wen Jiabao had done the right thing by paying attention to the disadvantaged and vulnerable sectors of society. But they had limited room for initiating political reforms as long as Mr Jiang remained on the scene.

Ironically, Mr Shang said he had pinned hopes on Mr Jiang to launch reforms six years ago and sent him a comprehensive proposal for political reforms, in which he envisioned an independent judiciary, checks and balances in three branches of government, a multiparty system and free elections.

'I was inspired by president Jiang Zemin's speech on May 29 [in 1997],' he said. 'I thought the time was ripe for the party to launch the overdue reforms.'

In the speech to the Central Party School six years ago, Mr Jiang urged cadres to seize the opportunity to make a breakthrough in economic liberalisation and political reforms.

'There was real intellectual ferment for political change before the 15th party congress [in 1997], but the 16th party congress last year failed to generate the same kind of excitement,' he lamented.

Mr Shang spoke wistfully of the momentous year 1997 when paramount leader Deng Xiaoping died and Mr Jiang emerged from the old man's shadow.

He said that in 1997 and 1998 there were high hopes that a growing economy and, with the passage of time, easing fears for instability after the 1989 democracy movement would enable the leaders to make real changes.

'In the end, what we got was some tinkering with personnel reform in the State Council,' he said. 'Nothing has changed in the Stalinist structure.'

The gap between the increasingly developed market economy and the Stalinist-style political system had widened, for which Mr Jiang must bear responsibility, he said.

'Jiang is profoundly conservative, valuing stability above all,' Mr Shang said.

Mr Jiang's Theory of the Three Representatives - that the Communist Party represents advanced productive forces, advanced culture and the interests of the broad masses - would deepen the existing contradictions in society.

The market economy had installed a socioeconomic system that could never be truly represented by China's Stalinist political structure, he said. He said his views were widely shared by intellectuals, but given that the Communist Party controlled all, the real change could happen only from top down.