No Change at China Inc

When, in the early 1990s, Liu Jie signed a contract with a state farm in China's Heilongjiang province to take over a dairy business, it must have seemed as though she was behaving exactly as China's Communist leaders wished. Private initiative, revitalizing moribund state entities, was to be a motor of China's spectacular rise.

The dairy business thrived, thanks to the hard work of Liu and her family: so much so that in 1997 the state farm broke her contract and seized it back. For the past 10 years, Liu has been fighting through the courts and peacefully petitioning the government. She has been kidnapped, repeatedly arrested and beaten up by the police, and still she has received no compensation.

Liu's battle exemplifies a great intractable dilemma for China's leaders: how, without democracy, a free press and a robust system of justice, can they get the state's agents to obey their own laws?

Liu made one more attempt last week: she collected 12,150 signatures from China's 30 provinces for a public letter that called on the 17th party congress, which begins today, to implement political and legal reforms. Many of the rights the letter sought to guarantee - freedom of expression, press and association - are already in the Chinese constitution. Liu wanted a constitutional court to be set up to assess national and local laws and regulations; she asked for the abolition of the Re-Education Through labor system, under which prisoners can be sent for hard labor without appearing before a court of law; and an end to the persecution of people who try to petition the central government for justice. It is an unobjectionable list, in accord, on paper at least, with the stated direction of the party itself. So why was Liu arrested last week?

The 17th party congress is the focus of a Darwinian struggle over the future leadership of the Communist party and therefore of China: whoever makes it to the powerful Standing Committee of the Politburo from among the party's next generation of 50-year-old wannabes will be well placed to fight for the supreme leadership when President Hu Jintao steps down in five years. The frenzied but secretive jockeying in the approach to these five-yearly events is the closest that China gets to electoral politics.

The party has come a long way from the days when it used to resolve its disagreements by imprisonment or murder, when a strong leader could hope to die in office. It's all much more orderly now, with retirement ages and fixed terms. Revolution has given way to a national corporate governance, with the Politburo as the executive board of China Inc, charged with steering the fortunes of the Leninist corporate enterprise. The one thing that has not changed is its belief in the party's monopoly of power and the spoils that go with it, including the wealth created by people like Liu.

For all China's much vaunted economic modernization, political reform is stuck. Instead of planning a transition to a more representative model, the party is devising excuses for why representative and accountable government can't happen: that it is culturally alien in Asia, that history is against it, that there is no demand for it or that superior results can be obtained under a system of consultative rule of law, which would somehow guarantee Chinese citizens the rights that they nominally enjoy at present, but that are routinely violated through abuse of power.

How convincing this sounds to Liu and all those whose livelihoods have been ruined by local party despots can be gauged by the title of her open letter - Constitutional Democracy: the Foundation for Addressing Social Grievances. Liu, at least, can see what's required.

· Isabel Hilton is editor of Chinadialogue.net