The Communist Party may lose 'the basis of its rule' in less than 10 years if the private sector is allowed to go on expanding, a leading conservative elder has warned.
Former head of the party's propaganda department Deng Liqun said in an internal paper collectively written with his aides that party rule would be threatened unless state-owned enterprises remained the mainstay of the economy.
Mr Deng's salvo came as the leadership was debating the extent to which more leeway should be given to the non-state sector, including private and foreign firms.
The so-called mainstream faction of the party, led by President Jiang Zemin and Premier Zhu Rongji, favoured giving more elbow room to the non-government sector, particularly after the mainland's accession to the World Trade Organisation.
This included encouraging private enterprises to be listed on the stock market and to buy up state firms.
A Beijing source said Mr Deng's paper was based on detailed research his advisers had done in cities where non-state firms had become the dominant sector of the local economy.
'In cities where the state sector is no longer predominant, administrations are dependent on private and foreign firms for taxes and other kinds of income,' the paper said.
