What direction will the Chinese government take after 2012?

In a recent piece, I wrote about the competing factions in the Chinese Government and later I wrote about the rise of Bo Xilai as well as his past. Since then however, Bo Xilai's faction has in effect, replaced the Shanghai Faction of the Chinese government, introducing an entirely new landscape to Chinese politics.

In the past, it was the Shanghai Faction versus the Hu Jintao-Wen Jiabao alliance. (The Hu-Wen faction). The Shanghai Faction was a clique that still remained loyal to Jiang Zemin and shared his political views. They were more in favor of free markets (with Chinese characteristics) and more likely to exploit nationalism by voicing aggressive rhetoric than their Hu-Wen counterparts.

Jiang Zemin was in the news recently as world media speculated on whether he had already passed away. Rumours of his demise proved to be greatly exaggerated, however the episode illuminated the secrecy that surrounds the health of current and former senior figures in the party. The secrecy around Jiang Zemin may also be due competing factions jostling to interpret his legacy in a manner which suits them.

In any case, Jiang Zemin's time of influence may be drawing to a close, many years after he stepped down.

The game has changed. Now the Hu-Wen faction are more likely to favour free-market policies than Bo Xilai's red faction, who have replaced the Shanghai Faction. The red faction have remade the Western Chinese city of Chongqing in a more Maoist image, and seek to repeat their successes on the national stage.

They nationalized local TV stations then made them broadcast patriotic programming. Ratings plummeted but without a profit incentive it didn't matter. They exhorted locals to sing red songs, harking back to Mao's era. It was a cynical, calculated move by Bo, given that his family had been persecuted by Mao, but for the local population who feel adrift in a rapidly changing economy that lacks a moral anchor and the pursuit of money has become all-important… well, reminiscing about simpler times has provided them with an outlet, even if the rhetoric is rosier than the reality. The recent elevation of Chongqing to one of China's favored economic regions has provided the area with stunning growth, which has in turn made the Red Factions projects there take on the aura of success.

Bo Xilai, more than any other Chinese politician, has a certain star-quality. At a recent dinner in Beijing, whilst surrounded by those with more than a passing interest in Chinese politics, I couldn't help but notice that the moment Bo's name came up, everybody had heard of his stunning rise and were confident he would play a key role in the Chinese leadership as it heads into the future.

It's already been established that Xi Jinping will replace President Hu Jintao and Premier Wen Jiabao will be replaced by Li Keqiang. It's the other spots on the powerful politburo standing committee which are up for grabs, and it's only once they've been announced that observers will have a real handle on what can be expected.

Bo Xilai is being touted as a possibility, but it's also possible that he's too young for this outing and may stand a stronger chance when the next committee is composed. Figures such as Li Yuanchao are likely to be more liberal in their outlook but again, nothing is certain as yet. Politburo Standing Committee members and Jiang Zemin loyalists Wu Bangguo, Li Changchun and Jia Qinglin are all approaching the age of retirement and won't make the cut next time.

After the 2012 changeover, there are likely to be members from both factions of the Party. But given that both sides of the table have taken a lurch towards micro-management in terms of both economic and social issues, it would appear that the ideological gulf between China and the United States is at risk of growing rather than shrinking.

The manifestations of this gradual change in governing style can be seen in a number of recent events. The jailing of Ai Wei Wei and his subsequent timidity, China's increasing belligerence in the South China Sea (though a lot of that can be chalked up to the increasing independence and influence of the People's Liberation Army which is proving to be a hawkish, powerful political entity in its own right, but more on that in a moment), as well as the recent crackdown on human rights lawyers which some have described as the worst since the Tiananmen Square massacre all fit into this picture, as does recent moves by the Chinese government to freeze out foreign enterprises given that China no longer needs their capital as it once did.

Any predictions about Chinese political trends however, need to be measured against the limitations faced by the ruling Chinese Communist Party (CCP). Whilst they don't have the checks and balances faced by Western countries who must abide by the limitations imposed by a separation of powers, the Chinese government has their own separation of powers, after a fashion.