Premier Wen Jiabao’s speech to the Congress embraced a call for comprehensive reform. In an unprecedented apology he pleaded: ‘I sincerely hope the people will forgive me’ for the many problems that remain in China, warning that the government needed to listen to views of dissent to government policy coming from the people. His final press conference reinforced the call for structural reform and a strong plea for change to the political system. He said that he had addressed the issue of political reform in China on many occasions in recent years but had stepped up his campaign in the past year out of his ‘strong sense of responsibility’.

As the economy continues to develop, Wen said, the problems of income disparity, corruption and lack of credibility can only be addressed by structural reform. ‘I’m fully aware that to resolve these problems, we must press ahead with both economic structural reforms and political structural reforms, in particular reforms on the leadership system of the Party and the country’, he elaborated. Wen said that he believed any member of the Party and government officials with a sense of responsibility must fully recognise that further reform is ‘an urgent task’ for China. ‘I know very well that the reform will not be an easy one and the reform will not be able to succeed without the consciousness, the support, the enthusiasm and creativity of our people’, Wen said.

A year earlier, Wu Bangguo, the Chairman of the Standing Committee of the National People’s Congress, took a very different tack, with his authoritative ‘five nos’ against reforms that might change China’s political and economic system. Then, the conservatives appeared to have the upper hand. Now, Wen warns, China risks a repeat of tragedies like the Cultural Revolution in the past, unless there is rapid reform.

At the end of the week came Bo Xilai’s surprise removal as Party chief in Chongqing, a development which Ye Duchu, Professor at the Party School of the CPC Central Committee, said reflects the Central Committee’s emphasis on holding local leaders responsible. For what exactly is yet to become clear. Bo gained his profile as a ruthless corruption fighter in Chongqing and champion of ‘the new left’ nationally. He led a crackdown on crime and a revival of Mao-era patriotic songs and sloganeering while promoting an economic model that emphasised a more equitable distribution of wealth. His approach, known as the ‘Chongqing model’, attracted the support of modern-day Maoists and others critical of China’s growing income disparity. He was openly campaigning for a spot on the powerful Politburo Standing Committee through the media with Maoist ‘red revival’ slogans and populist policies until Wang Lijun, formerly Bo’s police chief, fled Chongqing for Chengdu and took refuge for a day at the city’s US consulate before being escorted to Beijing by Chinese security officials.

Political system reform, as Premier Wen came closer to making clear in public last week than any top leader has done before, is deeply connected to getting China’s big economic problems sorted out. Wen’s report to the National Congress promised easing back China’s breakneck economic growth and a shift to domestic rather than export-led growth. A more representative political system is likely to make that easier, and is essential to dealing with systemic corruption — an inevitable outcome of the interaction between a one-party state and getting things done in the market.

In this week’s lead essay, prominent CASS economist, He Fan, says that the Chinese economy is bound to slow down, as the recent World Bank-Development Research Center Reportsuggests. The Chinese economy will inevitably slow down, He says, because the potential growth rate of an economy tends to decline as its GDP per capita increases — and this process is likely to accelerate as China’s population ages. That’s the good news, says He. But there is no guarantee that this transition will be smooth. That could be bad news.

‘Between 2003 and 2007, China’s investment-to-GDP ratio was 42 per cent on average (the highest among the G20 countries), and its consumption-to-GDP ratio was 38 per cent on average (the second-lowest among the G20 countries)’, He explains. ‘The manufacturing sector’s share of GDP was 47 per cent on average, second only to Saudi Arabia. And the service sector’s share was 41 per cent, the third-lowest following Indonesia and Saudi Arabia’.

‘These figures show that even before the global financial crisis, imbalance was an established feature of the Chinese economy. This imbalance has become more pronounced in the years since the crisis; with China’s stimulus package announced in 2008 and an expansionary monetary policy introduced in 2009, more resources have been allocated to infrastructure building and heavy industry. Without a fundamental change in its development pattern, China will be further trapped in low consumption, high pollution and increasing social discontent’.

That’s why Wen, who remains premier until next March, is so anxious that the people’s voices be heard more effectively, since representing their priorities more directly in the policy process is now critical to a more sustainable development model. That the debate about these big political and economic system questions is now out there would seem an entirely positive development. As Wen says, the choices will not be easy. China will need its own space and time to come to grips with them, though the reformers seem to have made progress last week. They are choices that are clearly more urgent than many have been prepared to acknowledge so publicly until now.

Peter Drysdale is Editor of the East Asia Forum.