China's CCP heads for the Battle of Beidaihe

Jiang's big worry at Beidaihe concerns the formal recognition of his status as an epochal leader

(CNN) -- Beijing insiders like to call it the Battle of Beidaihe.

Bugle calls are sounded every July as top Chinese Communist Party (CCP) cadres and their aides repair to the translucent beaches of Beidaihe a couple or so hours' drive from the Chinese capital.

There they discuss blueprints for the coming year -- but also engage in ritualistic horse-trading and back-stabbing to sort out differences among the major cliques.

This year's Beidaihe meeting, to open in a week or so, promises to be particularly colorful -- and combative -- because it will finalize personnel arrangements and policies to be endorsed at the 16th CCP Congress slated for September.

At issue is whether there will be a smooth transition from the Third Generation leadership headed by President and party General Secretary Jiang Zemin, 75, to the Fourth Generation led by Vice-President Hu Jintao, 59, his putative heir-apparent.

Other things to watch include the degree of opposition that will be raised to the enshrinement of Jiang Zemin Theory in the party charter.

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To some extent, things seem to be going the way of Jiang, the master politician who has been in the helm for 13 years.

It is now all but certain that key protégé Zeng Qinghong – and future custodian of Jiang Theory – will make it into the elite Politburo Standing Committee.

According to the new division of labor to be decided at the 16th congress, Zeng, currently Head of the Organization Department, will likely be given Hu's portfolio of party affairs, including the presidency of the Central Party School (CPS).

This is despite the fact that having been Jiang's hatchet man for so long, Zeng is unpopular with if not hated by members of most party factions.

Last week, Zeng was alongside Hu at the CPS auditorium as the latter addressed the graduating class of 2002.

One of Zeng's deputies at the Organization Department, Yu Yunyao, had last spring already been made the CPS' Executive Vice-President.

Yu, who gave a talk on Jiang Theory at the CPS graduation function, would help ensure that Shanghai Faction members will do well at the school, deemed a springboard for promotion.

Jiang's big worry at Beidaihe and the 16th Congress concerns the revision of the party constitution, or whether the charter will give formal recognition to his status as an epochal leader, and not just the "core" of the Third Generation leadership.

"Jiang wants Jiang Zemin Theory to be written into the constitution as a prime guiding principle for the party -- and on par with Mao Zedong Thought and Deng Xiaoping Theory," said a veteran party member.

"However, his opponents are saying that they will only allow Jiang's signature dictum – the 'Theory of Three Represents' – to be enshrined in the charter."

Three Represents Theory

It is true, of course, that the Three Represents Theory -- roughly, that the party should represent the highest productivity, the best culture and the masses' interests -- is widely seen as Jiang's brainchild.

Yet "Three Represents" is also an amorphous and malleable concept that is subject to re-interpretation by Fourth Generation officials.

And unless Jiang Zemin Theory is unequivocally given pride of place in the charter, the president's status in the CCP pantheon cannot be assured.

Premier Zhu Rongji (r) has had heated arguments with Jiang (l) over personnel matters

As it is, there has been more evidence of both subtle and open opposition to "Three Represents" -- particularly the corollary that private businessmen should be welcomed into the party thanks to their contribution to productivity.

The official media has the past fortnight run dozens of articles on how nouveau riche businessmen have evaded up to 100 billion yuan of taxes a year.

Premier Zhu Rongji, who has had heated arguments with Jiang over personnel matters, had last month decried the fact that most of the 100 Chinese multi-millionaires listed by U.S.-based Forbes magazine got away with not paying anything at all.

"I earn just around 800 yuan a month," Zhu said in an internal setting. "How come I'm paying taxes and the super rich are not?"

And numerous commentators have linked the recent spate of mining and industrial accidents to the corrupt practices and get-rich-quick mentality of unscrupulous private owners of mines and factories.

Beijing is rife with speculation that former party chairman Hua Guofeng -- Mao's anointed successor -- has threatened to quit the party if red capitalists are allowed in.

And up to 1,000 party veterans reportedly held a rally on July 1, the CCP's birthday, to protest Jiang's alleged revisionism of classic Marxism and Mao Thought.

"Non-retirement card"

Jiang has responded by threatening to unleash his ultimate weapon, dubbed the "non-retirement card" by Beijing pundits.

This means that if the president fails to have his way, he will simply refuse to hand over power to the Fourth Generation.

This is the background behind stories that tens of generals and regional cadres have written petitions to Beijing asking that Jiang be given new terms as party chief and chairman of the Central Military Commission (CMC).

While it is generally accepted that given Vice-President Hu's lack of military experience, Jiang might remain CMC chief for a few more years, it is unlikely that Jiang will stay on as party general secretary.

This will run counter to the reforms, including rejuvenation of the leadership, that Jiang hopes will be a major part of his legacy.

However, his flashing the near-desperate non-retirement card is a measure of the degree to which pressure is being put on the ageing Third Generation stalwart.

Other organizational bickering at Beidaihe will be related to the division of the spoils -- or which faction will get how many Politburo and Politburo Standing Committee seats.

Party sources say the competition to become Premier Zhu's successor has become unexpectedly acrimonious.

Zhu has on numerous occasions said that since he only has one short five-year term as premier, he wants somebody capable to continue his policies – and that only Vice-Premier Wen Jiabao, 59, fills the bill.

While Jiang enjoyed Deng's patronage after becoming party chief in 1989, Hu cannot look for similar support from the outgoing president

National People's Congress Chairman Li Peng, however, is dead set against Wen's ascendancy.

Yet Zhu has indicated he will not accept the nominee put forward by both Li and Jiang – Vice-Premier Wu Bangguo, a former Shanghai party boss.

And Beijing is abuzz with speculation that the current Executive Vice-Premier Li Lanqing, who is acceptable to most factions, may become a "compromise candidate."

Vice-Premier Li will be 71 by the time of the congress, or just one year above the generally accepted retirement age.

However, Politburo members may be willing to bend the rules slightly for him, as they did for Jiang at the 15th Congress in 1997, when the latter was 71.

And how about the concerns of Vice-President Hu? While Jiang had enjoyed Deng's patronage after becoming party chief in 1989, Hu cannot look for similar support from Jiang.

The Fourth Generation leader's preoccupation is to boost his power base by persuading his colleagues to induct a Fifth Generation cadre -- or an official in his 40s -- to the Politburo.

While the well-regarded Governor of Henan Province, Li Keqiang, 46, is seen as a potential "core" of the Fifth Generation, his promotion could be blocked by Shanghai Faction politicians.

A former boss of the Communist Youth League, Governor Li is deemed too close to Hu, the head of the so-called Youth League Faction in CCP politics.

Moreover, having such a young man in the Politburo will further highlight the ridiculousness of efforts by septuagenarians such as Jiang to hog the limelight.