China says graft taking toll as party turns 85

BEIJING, June 30 (Reuters) Chinese Communist Party chief Hu Jintao warned that corruption is sapping the party's authority and called for a crackdown in the wake of scandals that have exposed corrosive official abuses as market reform deepens.

Hu told a meeting in Beijing marking the 85th anniversary of the Communist Party's founding that despite a long campaign to root out corruption, official abuse remained widespread.

''In some spheres, corruption remains quite serious,'' Hu said in a speech broadcast live on Chinese television today.

''There are continued cases of leading officials abusing power for private gain, engaging in graft and bending the law and falling into corruption and dissolution.'' Hu's speech comes after a string of scandals highlighted misdeeds among senior officials, including the military.

Yesterday, China announced it had sacked a top naval officer, Wang Shouye, for economic abuses and also detained a vice governor of the eastern province of Anhui accused of taking bribes. Earlier this month, Beijing Vice Mayor Liu Zhihua was sacked, accused of corruption and dissolute behaviour.

Hu said such abuses threatened the party's control.

''If a ruling party cannot maintain flesh-and-blood ties with the people, if it loses the people's support, it will lose its vitality,'' he said.

CRACKDOWN Yet Hu appears unwilling to prescribe dramatic political reform to strike against corruption, fearing drastic medicine could erode party control, said Ding Xueliang, of the Hong Kong University of Science and Technology.

''The room for improvement in official discipline and law enforcement is huge, but the costs are too -- that's the fundamental dilemma,'' Ding said. ''They know about the problem and the many possible solutions. But the question is: do they want to pay the price?'' Hu said efforts to reinforce ideological loyalty and spread wealth to China's poor could ensure the Marxist party retains power even as it press ahead with market reform.

For the past 18 months, Hu has overseen a re-education campaign to instil ''advanced'' discipline among the party's 70 million members before a congress likely next year that may see many leadership changes.

''We must conscientiously resist money-worship, hedonism, extreme individualism and other inundations of negative, rotten ideology and culture,'' Hu said.

Hu appears to have been affronted that senior officials took little heed of his campaign against corruption, said David Kelly, an expert on Chinese politics at the East Asian Institute of the National University of Singapore.

''This is such widespread disrespect that Hu seems to have taken it as a slap in the face,'' Kelly said of the recent toppling of Liu, the Beijing official.

Hu's speech was notably short of nods to his predecessor, Jiang Zemin, who promoted capitalists as party members, but he praised Mao Zedong and other revolutionary founders.

The ceremony, a day ahead of the actual anniversary yesterday, ended with officials standing while a band played the Internationale, the traditional Communist anthem.

REUTERS SHB BD1855