China's National People's Congress is preparing to wrap up its annual two-week session on Tuesday without passing a long-expected law on private property rights. This is happening because of a rarely seen open dispute between some in the Chinese Communist Party who want stronger adhesion to socialism and those who want to stay the course of market reforms.
Meetings of the National People's Congress rarely feature any real debate, since the figurehead body usually does no more than ratify what has already been decided by the upper echelons of the Communist party.
But this year, the government has been forced to delay a draft law to protect private property rights after an outcry by a small group of hardliners, who have pointed to the widening gap between rich and poor that has triggered thousands of peasant uprisings, as a reason to stick with socialist ideals.
For China's leadership, the dispute highlights a growing dilemma on whether it should continue to espouse a communist ideology that has galvanized the poor in the past by promising social welfare for all, but that is incompatible with the country's modern free market system.
David Kelly is a senior research fellow at the East Asian Institute of the National University of Singapore. He says the leadership is trying to appease angry peasants with socialist style reassurances that China's wealth still belongs to the masses, while at the same time propelling the economic growth that is crucial to keeping it in power.
"They wish to maintain socialism in name but maintain market reforms in reality. These market reforms are not necessarily creating an economy that resembles a western modern developed economy," said Kelly. "The great worry is that it will develop into what is called 'Latin Americanization.' The Latin-Americanization of China implies that an elite of powerful wealthy private individuals will emerge from the government using their government privileges and connections and will take over a very large slice of the pie."
Professor Kelly says appeasing the poor while protecting the interests of the new wealthy elite is a big challenge facing China's Communist Party leaders.
"The party now consists of people who know how this looks from the countryside, and who know how dangerous it can be if it goes to an extreme, and who wish to redress the balance. But, it's a question of how far they can go," added Kelly. "It's very hard to redress the balance. It's very hard to touch those interests who have already gained from the market reforms. Those interests have become - to put it in loose terms - elite mafias which have spread throughout the country."
Officials in these two weeks have unveiled a series of measures to fund development projects in the countryside. But some analysts say the measures are unlikely to work in the absence of wider reforms that address social ills.