This is a potentially huge deal.
Ambrose Evans-Pritchard writing at the Telegraph:
The forces of reaction and economic folly threaten to prevail in China. The long political arm of Jiang Zemin has reached out from the shadows to thwart reform, with huge implications for Asia and the world.
Photo: ReutersIf reports from the Hong Kong press and China's blogosphere are correct, a remarkable upset has occurred on the eve of the ten-year power shift next week -- the greatest turn-over of top cadres since Mao's revolution.
The South China Morning Post says the new line-up of the Politburo's Standing Committee is "packed with conservatives". The succession deal agreed over the summer has been scuppered.The 86-year Mr Jiang -- who rose to supreme leader on the bones of Muxidi and Tiananmen in 1989 -- has placed his accolytes in charge of the economy, propaganda, as well as the Shanghai party machine.
The hardliners seem poised to snatch control of the seven-man Committee, tying the hands of incoming president Xi Xinping and premier Li Keqiang. If confirmed, long-term investors may have to rethink their core assumption about the future course of China.
This power struggle going into the 18th Party Congress matters more in the sweep of history than the run-off two days earlier between a centrist Barack Obama or the centrist Mitt Romney, though the stage drama is less compelling.
Mr Jiang's rear-guard coup should give pause to thought. It was he who instituted the Patriotic Education movement in schools in the 1990s, whipping up nationalist fervour to replace the lost mystique of Maoism. The effect was to nurture revanchist hatred against Japan, creating a monster that now requires feeding.
His eerie return comes at a time when China and Japan are "one error away" from outright war over the Diaoyu/Senkaku islands, to cite the findings of four American diplomats in a report to US Secretary of State Hillary Clinton.
Stewart Patrick from the US Council of Foreign Relations likens East Asia to Europe just before the First World War. It was then that Sir Norman Angel famously argued that the great European powers were so intertwined by trade and investment that conflict had become unthinkable. Nationalist emotions decided otherwise....MORE