New leaders must seize the moment

PUBLISHED : Sunday, 22 January, 2012, 12:00am
UPDATED : Sunday, 22 January, 2012, 12:00am


Anywhere else but the mainland, a fall of one tenth of 1 per cent in the proportion of the population that is of working age - from 74.5 per cent to 74.4 per cent - might cause little concern. But it should to China's leaders. It marks the beginning of the end of what economists call the country's population dividend - an abundant supply of cheap labour to drive economic growth. Coming on top of news that city dwellers now outnumber rural ones, defining an industrial economy, that poses serious policy challenges if the country is to sustain its economic rise. These call for nothing less than meaningful political and economic reforms.

Ironically, these two landmark official statistics came in the same week - 20 years ago - that Deng Xiaoping arrived in Guangzhou to begin his now famous southern tour in which he rallied officials to revive stalled economic reforms, putting China on track to become the world's second biggest economy today. The coincidence is not without relevance, now that China has reached another critical turning point in its development.

History credits Deng with China's opening up and economic reforms in the late 1970s. What sets his 1982 southern tour apart is that it ensured that this course was irreversible, after the rise of conservative elements within the Communist Party following the crackdown on the Tiananmen student protesters threatened to derail reform.

There are parallels in today's situation. Debate has broken out again about China's modernisation, with leftists reportedly blaming current problems on the number and pace of reforms. Contrary to their usual practice with significant national anniversaries, the authorities did not hold any activities to commemorate the southern tour and its immense significance to the course of the nation's modern history. This may be explained by the sensitive timing, amid power struggles ahead of a party congress that will endorse a generational leadership change, and days after the seventh anniversary of the death of purged former reformist party leader Zhao Ziyang .

But it also serves as a reminder of obstacles to further reforms, including special interest groups connected to various officials, businessmen with a vested interest in maintaining the status quo, state-owned enterprises with monopoly market power, and party officials with influence over the economy and the power of patronage.

With the current leadership on the way out, China is at a critical juncture in its development. There is a need to restructure the economy because the export-based model is no longer a viable way forward. Sadly, the country does not have a strong leader like Deng to push ahead with reforms. It can only be hoped that the new leadership will be inspired by Deng's example to seize the moment.