What to watch for this week in China

The end of this week will bring a slew of economic statistics which should help to clear some of the fog created by the different dates of the Chinese New Year in 2011 and 2012 that have made any comparison of the past two years so tenuous. As I noted here last week, the PMI numbers have not produced much clarity given the different kinds of companies they cover and central bank policy has not evolved in the easing direction that markets had been awaiting. The March CPI figure showing an unexpected rise was caused mainly by a jump in vegetable prices: a downward movement is likely in the next quarter.

This week will bring the first quarter GDP data and trade figures that are likely to show contraction for the rest of the first half of 2011. But the most interesting data will be for industrial production and will come out on Friday. If it shows a sharp decline, this could influence government policy which has remained largely static so far this year.

Politically, the weekend brings the 23rd anniversary of the death of Hu Yaobang, the reformist Communist Party Secretary in the early years of economic reform who was ousted from his post in 1987 (though remaining in the Politburo) after intense criticism by hard-liners as growth threatened to go off the rails. In the renewed debate about the need to relaunch economic reform, Hu has become a reference point for those who are pressing for change. He has relevance for today’s top-level politics for two reasons.

He engaged Wen Jiabao in 1985 to run the Party’s Central Office. Wen wrote a eulogy of him last year and may do the same this weekend to mark the anniversary of Hu’s death which sparked the protests in Tiananmen Square in 1989. He also helped the careers of present and future leaders Hu Jintao, Li Keqiang and Xi Jinping. On the other side of the coin, the leaders of the attack on Hu included Bo Yibo, Mao’s Finance Minister and father of Bo Xilai (see The Bo business fallout).

So, 23 years after Hu suffered a heart attack at a Politburo meeting, both reformers and supporters of the status quo can jostle around this figure from the past, using him as a debating point in a way familiar in China. Hu, Xi and Li have all paid their respects to the memorial plaque at his home in the past. If they do so this weekend, the reformers will be able to notch up another reason for cheer after the fall of Bo Xilai.