Communism's division within

Maoists opposed to market forces

THE LEFTISTS: The old guard accused of espousing "ossified" Marxist ideology are grouped around 82-year-old Deng Liqun, known as "Little Deng", whose official status is limited to less-than-pivotal positions such as Deputy Head of the Central Leading Group for Party History Work. Another key figure is 80-year-old Song Ping, who is a more powerful conservative party elder and who during the Eighties ran the important Organisation Department of the party.

Over the past two years, the remnant Maoists have developed a habit of publishing 10,000-character treatises which attack China's embrace of blatant market forces. Primary among their concerns is the future of China's ailing state enterprises, half of which are in the red. The Leftists insist the state sector must remain indisputably dominant in the economy, and they take a very dim view of privatisations, state sell-offs, and shareholder schemes as ways to solve the burden of decrepit state factories.

"Money worship", rising crime, prostitution and corruption are highlighted by the Leftists as proof of the downside of market-driven reforms. They prefer to subscribe to the theory of old-fashioned Chinese Communism, without letting historical realities get in the way.

Class struggle remains a favourite theme, and the Cultural Revolution no bad thing in their opinion. However, Deng Xiaoping's words remain sacrosanct, which means they cannot strike at the heart of market-oriented "Socialism with Chinese characteristics", but must instead confusingly attack the mainstream for abandoning the Deng legacy.

Capitalist means towards an end

THE MAINSTREAM: At the heart of China's Communist Party, President Jiang Zemin and his allies pin their flag to the mast of Deng Xiaoping's theory of "Socialism with Chinese Characteristics".

They insist that as China is still only in the "primary stage of socialism", it is fine to use capitalist means for the next step of the journey, without abandoning Marxism. Hence the linguistic acrobatics on the question of state enterprise reform ahead of the party congress, where it will be the most high profile topic.

The argument will be made that "public ownership" does not necessarily mean "state ownership". And if Mr Jiang has the nerve he will promote shareholding corporations as an effective form of public ownership for the present era.

These mainstreamers, who over the past two years have been labelled the "neo-conservatives", are not to be thought of as reformers, however. These men seek political stability and consensus - and are determined to keep their jobs and to ensure Communist Party control. Political reform is simply not on the agenda.

Zhu Rongji, the deputy prime minister in charge of the economy, is in charge of tackling the problems besetting a half-reformed economy. Mr Jiang puts more emphasis on politics, including his much-vaunted campaign for China to build a "spiritual civilisation". This catch-phrase stands for political orthodoxy, combined with a attempts to manage the difficult next stage of economic reform. Hence the riposte to the Leftists that, just because Marx did not talk about the market economy, does not mean the concept is not applicable 100 years later.