The last time Germany went to the polls, Wolfgang Clement was deputy head of the Social Democrats (SPD), and one of the most powerful figures in government: the “super minister” in charge of both economic and labour market policy, who had previously governed the SPD heartland of North-Rhine Westphalia, home to 18 million people.

 Four years on, Clement is urging the public to vote for one of the centre-left SPD’s most bitter rivals, the business-friendly Free Democrats (FDP).

 In a newspaper advertisment on Friday, Clement said he was backing FDP leader Guido Westerwelle in Sunday’s federal election.

 An admirer of Britain’s Margaret Thatcher, Westerwelle has branded the SPD socialists, and wants to end their 11 years in office to form a centre-right coalition with Chancellor Angela Merkel’s conservatives.

Though Clement had long had a fractious relationship with the left of the SPD, the endorsement was unprecedented, said Josef Schmid, a political scientist at the University of Tuebingen.

 ”The man is no fool but to act like this is just idiotic,” he said of Clement, a former journalist who spent nearly 40 years in the party. “I can remember nothing like it.”

 The 69-year-old Clement left the SPD last November after a row blew up over his criticism of the party in the state of Hesse.

 Yet despite overtures from the FDP, he said he would remain a “Social Democrat without party membership.”

 In the advert in Bonn’s General-Anzeiger, Clement said a vote for the FDP was a vote for economic prosperity and against the “irresponsible populism” of die Linke or Left Party, a far-left grouping led by ex-SPD chairman Oskar Lafontaine that has eaten into the Social Democrats’ traditional base.

 Uwe Andersen, a political scientist at the University of Bochum, said the move by Clement, who presided over the biggest postwar cuts to German jobless benefits, was symptomatic of lingering divisions between the left and centrist wings of the SPD.

 ”This is a real coup for the FDP though, and Westerwelle will try to make the most of it. It could spirit centrist voters away from the SPD. Then again, it could encourage some people who might have stayed at home to go out and vote for the SPD,” he said.

 Andersen said Clement’s decision was particularly shocking in a country where political allegiances have traditionally been set in stone.

 ”The ties here are more of a marriage for life than in the United States. But young people are getting fed up with it,” he said. “That’s why party membership of the main parties has been falling so dramatically.”

IMAGE:Outgoing German Economic Minister Wolfgang Clement of the Social Democrats (SPD) gestures during the inauguration of his successor Michael Glos of Bavaria’s Christian Social Union (CSU) in Berlin November 23, 2005. Clement handed over his duties to Glos following the inauguration of Angela Merkel as Germany’s first female chancellor on November 22. REUTERS/Wolfgang Rattay

It is ironic that 30 years after they gave birth to the reforms that transformed China into an economic powerhouse, the country’s vast hinterlands are still dogged by poverty.

The breathtaking growth of the economy since the pro-market reforms launched by Deng Xiaoping has led to an extraordinary increase in real living standards and an unprecedented decline in poverty. According to World Bank estimates, more than 60 percent of the population lived under the $1 per day poverty line at the beginning of economic reform. This had fallen to 10 percent by 2004, so - on this narrow measure at least - about 500 million people were lifted out of poverty in a single generation.

“Only development makes hard sense,” said President Hu Jintao in a December 18 speech to mark the anniversary of reform, reviving a slogan that Deng used to spur on investment and spending. 

And yet vast swathes of China’s countryside were bypassed by the economic boom that transformed its cities and eastern seaboard. Agriculture now accounts for only about one-tenth of China’s GDP even though it supports more than half the population.

Much of the rural poverty problem in China can be traced to the inadequacy of the land reform introduced after 1978 and the fact that, even today, rural land is still legally under “collective” ownership. 

Although collectivised farming was replaced by a system that assigned 30-year, non-transferable land-use contracts to households, peasants were not given marketable ownership rights to the land they farmed or the freedom to use it as security on which to borrow and invest. Worse, land was not necessarily allocated to the most efficient farmers and the vast majority worked on so-called “noodle strip” patches that were too small for economies of scale. One of the biggest failings of the de-collectivised system, however, was that it did not shield farmers from the threat of expropriation by officialdom, a major disincentive to investment.

This led to local governments exploiting the countryside as a source of money and power, with the weak legal foothold that farmers had on their land only making life easier for unscrupulous and corrupt officials. According to the International Food Policy Research Institute’s Xiaobo Zhang in a speech “land is being grabbed at a fraction of its market value for supposed public purposes, and then being provided to private investors to promote local economic growth”.

The rights and legal weakness problems associated with rural land have persisted until today, in large part because of ideological taboos in Beijing.

Conservatives have clung to the view that the state should retain control of arable land, allocating it for the greater egalitarian good. Reformers, on the other hand, have been too weak to challenge a central tenet on which the legitimacy of the Communist Party was founded.

Dodging the central issue and tinkering at the edges, the government has sought for years to address rural poverty through, as the Wall Street Journal puts it, “agricultural subsidies, tax cuts for farmers and massive rural infrastructure spending”.

China’s foot-dragging meant that it eventually fell a step behind fellow Communist Vietnam, which introduced a legal market in land-use rights in 1993. Vietnam’s experience, according to a paper in the IMF’s Finance and Development magazine, achieved a more equitable outcome than one might have expected from free market allocation: while there were both winners and losers, the gains in fact tended to favour the poor and those who initially had too little land.

When China’s Communist Party agreed to new rural land policies this October, it looked for a moment as though radical change was on its way at last. The new plan means farmland can be leased over an unspecified “long term” rather than 30 years, and farmers will be allowed to “sub-contract, lease, exchange or swap” their land-use rights.

Local media reports said the government had laid the ground for the creation of larger and more efficient farms, some cited estimates that the move would double  disposable incomes in the countryside to more than $1,200 per person a year by 2020, and others suggested that it would give farmers better protection against official land-grabs.

Independent commentators, however, have brushed off the initiative as a pragmatic response to deal with wider social and economic problems rather than an ideological shift within the ruling party.

First, the Party faced the prospect of mounting unrest among its vast rural population. In the past two years there has been a rash of protests over land seizures for mining and other industrial uses, and growing resentment at the widening wealth gap between cities and the countryside.

Second, the government has been faced with a sharp slowdown in its export-driven economy due to recession in the OECD world. The economy slipped into single-digit growth in the third quarter of 2008, just above the level of 8 percent many analysts say is the minimum required to soak up the millions of people entering the labour market every year.

According to some reports, the new rural land-use plan will unleash some $500 billion in land assets. This would fill the pockets of disgruntled peasants, perhaps cooling unrest, and it could help offset the economic impact of an export slowdown by giving a shot in the arm to domestic demand.

But there may actually be much less to the latest reforms than official reports pretend. The geopolitical intelligence group Stratfor concludes that they “might turn out to be a symbolic gesture, used to appease the masses while … (China is) compelled to focus on growth”.

Indeed, it would appear that the new land-licence regulations merely codify what is already happening in practice. As Yu Jianrong, a leading researcher on social conflict in Beijing, told the Southern Metropolis Weekly: ”there’s actually little new here”.

Without bolder moves towards full-fledged private ownership of land, China’s farmers will always be peasants. But China’s leaders always play a very long game. The Economist notes that even the epochal reforms of 30 years ago tended to come in baby steps rather than great leaps, and often were
formulated retrospectively. 

“In tiptoeing gingerly around one of the last Maoist shibboleths - collective landownership - the Party may yet be sowing the seeds of the rural transformation it promises.”

By Benjamin Kang Lim and Simon Rabinovitch

When Chinese President Hu Jintao spoke to the nation this week, an unusual six-second pause may have said more about elite politics in this secretive state than the other 90 minutes of
stolid Communist Party rhetoric. In an address marking 30 years of economic reforms, Hu appeared to lose his place in the middle of a sentence, halting awkwardly for 6.5 seconds — the only such break in his speech and an extremely rare bump for Chinese officials long-practised in flawlessly reading out speeches.

When Hu picked up again, he skipped a chunk of the prepared comments, forming a sentence that appears in none of the official transcripts of his speech, nor any Chinese press report. “One
centre”, he said, then went silent before continuing, “is the lifeline of our Party and our nation.” The official transcript read, “one centre and two basic points are mutually linked,
mutually dependent”, a slogan coined in the 1980s in which “one centre” has a purely economic meaning.

In skipping the second part of the slogan, some thought Hu was using “one centre” in a political sense, referring to himself as that nation’s paramount leader. Hu’s pause could have been a simple verbal misstep. But it came in a passage broaching the touchiest of issues for the 65-year-old president, who also serves as Party chief: how much power does he wield and has he
won the “core” status accorded early leaders. And some observers spied a message in Hu’s silence.

Faced with his stiffest challenge yet as the economy slows sharply, Hu may have been trying to stress to the Party that he was still firmly in charge. Even had he lost his place during the address, the “one centre” phrase leads into a slogan repeated so often by Chinese officials that it would be unusual for Hu to have missed its second part. “One centre is the lifeline. It doesn’t imply another way,” said a Chinese scholar, who requested anonymity because of the sensitivity of talking about the top leadership.

The setting for Hu’s speech, given before ranks of senior officials, retired and in office, seated in the huge Great Hall of the People magnified the potential significance of his comments. The highest-ranking Party officials sat on the stage behind Hu and directly to his rear was Jiang Zemin, Hu’s predecessor as president who still wields huge influence. Hu had paid tribute to Jiang earlier during his speech, using an officially sanctioned phrase to call him “the core of the Party’s third generation of leadership”. The assembled Party members gave Jiang a strong round of applause. Hu, the paramount leader of the so-called fourth generation, is still not referred to as its “core” despite having ascended to the presidency in 2003.

The “one centre” phrase also recalled comments reportedly made by army officials in 2003 when Hu was consolidating his power but Jiang was still chairman of the Central Military Commission. “One centre is called loyalty. Two centres strung together is trouble,” two military delegates to the National People’s Congress, or parliament, told Hu and Jiang, according to the Liberation Army Daily newspaper.

Speculation that the omission in the speech may hint at cracks at the top of China’s leadership pyramid is officially denied and also dismissed by many observers. “Take what is in the People’s
Daily as accurate,” the State Council Information Office, the media arm of the government, told Reuters. The People’s Daily transcript included the text skipped by Hu in his speech, effectively erasing his one-centre-as-lifeline comment.

Jin Zhong, publisher of Hong Kong’s monthly Kaifang, or Open, magazine, said Hu may simply be trying to alter Deng’s “one centre” slogan, looking to replace the second half that he left out with his own views.

What do you think?