Reformers on the mainland have waited a long time for a positive signal from the Chinese Communist Party leadership. It came yesterday with the news that ambitious Chongqing party chief Bo Xilai had been removed from office. This followed, by less than 24 hours, Premier Wen Jiabao's rebuke of the municipal leadership over the scandal in which the former city police chief sought refuge in a US consulate. Wen's remarks were the first comment on the incident by a state leader. He did not mention Bo by name, but with hindsight the fate of the aspirant to the top echelon of party leadership was sealed. More significantly, at Wen's annual televised press conference, he also invoked the fear of another Cultural Revolution to argue for political reform. His remarks appeared aimed at Bo's attempts to revive Maoist values with revolutionary campaigns and the singing of 'red' songs. Memories of that period still play on the emotions of everyone in China, including state leaders, who suffered hardship and tragedy during those troubled times.
Perhaps the most important aspect of the decision to remove Bo is that a struggle between reformists and leftists over China's future direction, hitherto waged behind closed doors, has burst into the open. With hindsight again, Wen flagged it long ago with repeated remarks, at home and abroad, that political reform was needed to safeguard China's national economic achievements for the benefit of the people. His views attracted a lot of attention but not open support and tended to be dismissed as unrepresentative of prevailing sentiment.
Leftists believe reforms have gone too far and blame them for a widening income gap and growing social unrest. Reformists are concerned that despite China's rise, the country faces an uncertain future unless it undertakes another round of economic and, more importantly, political reforms. Bo had emerged as the flag carrier for the leftists. His campaign, ostensibly a crackdown on crime and corruption, evoked memories of an era when everyone was poor, and in that sense equal. His fall came only two days after he had defiantly vowed to continue with it. While the dramatic turn of events signals the end of the Chongqing model, it has raised concerns that it will bring uncertainty to a leadership change due later this year. It could, on the other hand, open the way for compromise. After all, the decision had to represent consensus among the nine politburo standing committee members, including the men considered certain to become the next president and premier. That said, early reforms are unlikely. In the next few months the political focus will be on smooth generational change at the top and the economic focus will be on ensuring a gradual slowdown in economic growth - or a soft landing. A hard landing for the economy at this time could be destabilising.