Watching and waiting for Deng

The imminent death of China's patriarch is the cause of acute political anxiety

On the evening of 9 November 1989, Deng Xiaoping sat down with his extended family at his Peking home for a banquet to celebrate his formal retreat from public life. According to an account by his daughter, Deng Rong: "On the sky-blue wall was a b right red poster: `1922-1989-Eternity'. Father looked at it and smiled."

The first date marked the start of Deng's illustrious revolutionary career; the second marked his official retirement that afternoon from the last of his political positions. As for Eternity, sinologists are now pencilling it into their diaries for some time before August this year.

The "Deng deathwatch" is under way with a vengeance, following a spate of rumours about the ailing patriarch's medical condition, including unattributed reports of comas, heart operations, strokes and advanced Parkinson's disease. This weekend brought the latest episode in the saga: on Saturday night, an unexpected announcement on the television news said that President Jiang Zemin and fellow members of the Politburo Standing Committee had all visited Mr Deng to extend "cordial festival greetings" for the Chinese New Year. Mr Deng "expressed happiness over the great achievements made by the people of the whole country". All that was missing were any photographs or film footage of this heart-warming scene.

In China's bizarre political theatre, such episodes invariably add mystery to an obscure plot. Since his retirement, Mr Deng has traditionally delayed his seasonal greetings to the nation until Lunar New Year's Eve, when the first television news item has always included prerecorded footage of the increasingly infirm patriarch. The film was often weeks old, but at least it proved he could still walk. This Chinese New Year's Eve falls tonight, but no one is placing bets that Mr Deng will be on view.

The much-repeated propaganda line is that Mr Deng's death no longer matters politically, because the smooth transition to the "third generation" of leaders has already taken place. But just as few observers believe government statements that Mr Deng is "in good health", neither is much credence given to the official picture of assured political stability. And that is precisely why the imminent death of a semi-lucid old man who has held no formal posts for five years could have an important bearing on the future of China and the Communist Party that has ruled it for 45 years.

Mr Jiang, who at Mr Deng's instigation has garnered the titles of head of state, party chief and commander-in-chief of the armed forces, has been anointed the "core" of the new leadership. He supposedly heads a collective government that will remain in calm control after the patriarch's death. As the vice-president and economics supremo, Zhu Rongji, put it earlier this month: "The government is functioning perfectly."

Not everyone would agree. Mr Jiang and his colleagues are confronted by daunting problems, from inflation to growing unemployment, as they dismantle the planned economy. "Communism does not mean poverty," was one of Mr Deng's guiding maxims, and during his era of reform and opening-up China has achieved spectacular economic growth. But that growth has also created huge disparities: between urban and rural areas; coastal and inland provinces; and between those with a foothold in China's "socialist marketeconomy" and others trapped in the disintegrating structures of the past.

Unravelling the Maoist legacy would test any economist. The most intractable question is what to do with China's loss-making, debt-ridden state industries. Last week, officials confirmed that unpaid debts between state enterprises had reached a staggering 600 billion yuan (£46bn), with further arrears owed to the banks. But bankrupting these dinosaurs could throw tens of millions out of jobs. Hard decisions are postponed; no leader wants to be identified with controversial policies in the run-up to the paramount leader's death.

Nor do China's rulers want to be seen succumbing to pressure from other countries. Nationalism is a recurring theme in official propaganda and Peking now struts aggressively on the world stage.

Nowhere is this felt more strongly than in Washington. On Saturday in Peking, Sino-US trade negotiations broke down over America's claims of widespread pirating and copying of music, films and computer software; and fake labelling of home-produced goods as American. The US is threatening to impose harsh tariffs in a week's time. Peking loudly blames the Americans and says it will retaliate in kind. The resulting trade war would cost China dear.

As for the much-trumpeted smooth political transition, the uncertainties begin with Mr Jiang, and the likelihood that in the post-Deng era others may seek to usurp at least some of his titular roles. Mr Jiang has sought to bolster his position in recent months by promoting allies from his "Shanghai clique".

China's Communist Party has always been faction-ridden. What matters is whether the infighting after Mr Deng's death would be serious enough to paralyse government, and whether any fight for supremacy would fatally weaken the party's stranglehold on power. At present, that stranglehold appears total. The democracy movement of 1989 has disintegrated, with most political and human rights activists already in jail, detention or exile. As soon as Mr Deng dies, any dissidents still at large are likely to be rounded up as part of an intensive security crackdown.

Meanwhile, within Peking's Zhongnanhai leadership compound, a collective instinct for self-preservation should initially restrain the personal ambitions of faction heads. China's leaders presumably realise that serious rifts within the party could inviteits own demise. "They are well aware of what happened to the Communist regimes in the former Soviet Union and Eastern Europe," says a Western diplomat.

Most sinologists expect Mr Jiang to remain in situ for at least a year, although he may be forced to give up some of his titles. In the longer term, it is unclear whether the party will be able to contain internal schisms without the binding authority ofan "Emperor" figure such as Chairman Mao or Mr Deng.

If the current leaders cannot avoid the future, they seem to be doing everything possible to postpone it. Hong Kong newspapers report that there is now a 24-hour "emergency rescue group" watching over Mr Deng. The leadership does not want Mr Deng to die during the Chinese New Year festival, a period already posing public order challenges, because 200 million people are on the move.

Nor does Mr Jiang want Mr Deng to leave the scene before the National People's Congress in March, when the President plans to shore up his position with further appointments. It would also be inconvenient for Mr Deng to depart in the run-up to the 4 Juneanniversary, always a tense time in China. On Saturday, therefore, Mr Jiang was no doubt sincere in wishing his patron "good health and a long life".