2005-06-19 04:00:00 PDT Beijing -- This city's soaring glass towers and giant neon signs make it seem like the new mecca of global capitalism. But behind the glitz lie rising inequalities and falling social services that are fueling the rise of China's New Left.

This is a loose coalition of academics who challenge China's market reforms with a simple message: China's failed 20th century experiment with communism cannot be undone in the 21st century by embracing 19th century-style laissez-faire capitalism.

China is "caught between the two extremes of misguided socialism and crony capitalism, and suffering from the worst of both systems," says Wang Hui, a professor of literature at Beijing's Tsinghua University. His passionate denunciations of China's market reforms in Du Shu, a magazine he edits, are partly credited with energizing China's New Left intellectuals. "We have to find an alternate way. This is the great mission of our generation."

Such grand visions notwithstanding, the New Left's adherents don't offer a coherent set of alternate policies. Some are hard-liners, who say they rue the violence of the Maoist years, but remain enchanted with the sociopolitical initiatives of that period, such as collectivization.

But the majority of New Left intellectuals are moderates who recognize that old Communist dogma lies discredited. They say they simply want to rein in the excesses of China's market reforms, which have created widespread inequities.

China may be the world's fastest-growing economy, but it is also one of the world's most unequal societies. In a country where people used to save for months to buy a Flying Pigeon bicycle, the roads now are jammed with gleaming Audis and Buicks.

But among them, the unlucky ones who have missed the opportunities that have come with economic reforms still pedal their now-rusty Flying Pigeons. Free access to education and health care has been drastically cut, especially in rural areas, and property that was once seized from the rich and redistributed to the poor is being taken from farmers and given to developers.

Wang says it's time for people to understand that China's problems are the result of "bad policies and bad governance," not merely fallout from market mechanics.

Cui Zhi Yuan of Tsinghua University, a leading New Left thinker, says the crux of the problem is that "the government is more focused on helping export manufacturers than agriculture and rural welfare," which affect far more people.

One of the largest expenses in the budget is not education or health care, he says, but tax rebates to exporters. So, the government is returning money to domestic and multinational exporters while cutting welfare programs.

Wang and Cui say that with businesspeople now allowed to join the Communist Party, a government-business cabal is looting wealth that rightly belongs to China's workers, through the privatization of state-owned enterprises.

They depict reform of these enterprises as a wholly corrupt process, in which politically connected managers, in collusion with local officials and banks, strip enterprises of assets without any accountability, creating a might-is-right culture across the country.

Although both Wang and Cui say there is no doubt that China's state-owned enterprises, which generally lose vast amounts of money every year, need change, they are calling for a process of institutional renovation that would allow the enterprises to restructure without surrendering ownership or abdicating responsibility to workers.

The degree to which the New Left's rhetoric meshes with that of the government's indicates that President Hu Jintao and his team are tacitly supporting the New Left. Part of Hu's motivation is to discredit previous President Jiang Zemin, who committed the country to his awkwardly named Three Represents theory. Generally dismissed as a euphemism for Reaganesque trickle- down economics, Jiang's theory, enshrined in China's Constitution, is widely blamed for the deep inequalities in the country.

A recent confidential study of China's 20,000 richest people found that only 5 percent had made it on merit, according to a report in the China Rights Forum by Liu Xiaobao. More than 90 percent were related to senior government or Communist Party officials.

Such nepotism and corruption led to more than 50,000 protests across the country in 2003, seven times the number a decade before, according to government reports.

Chen Xin, a professor of sociology at the Chinese Academy of Social Sciences in Beijing and a self-described New Lefter, says Hu realizes he must correct the imbalances created during Jiang's term because although a democracy can balance extremes by throwing out of power a party or a president who's gone too far, "in a one-party system, the party must have its own self- correcting mechanisms, or else it will lose touch with the people."

Yet critics of the New Left, such as Professor Shi Yinhong, director of the Center for American Studies at the People's University in Beijing, say the group has no real alternative to the current global economic system.

Wang accepts that the major focus of the New Left is constructive criticism, but he says a new economic framework is being created. At its core is a focus on what the New Left calls the san nong (or three nong): issues concerning the plight of the nong min (peasants), nong ye (agriculture) and nong cun (rural communities).

Cui says focusing on these three issues is China's best hope for making the transition from a foreign investment-driven economy to one based on organic growth driven by domestic investment, which will raise local salaries and standards of living.

With dissent still a delicate business in China, Chen is quick to point out that the New Left's concern "is not politics but social welfare. We're only amplifying what we see happening around us. Hopefully, that will aid and guide the government."

Because the Chinese government is congenitally opposed to any sort of unsanctioned organization, Wang emphasizes, "We're not a group ... just a loose affiliation of people with similar beliefs."

He adds, "Even the term 'New Left' is not ours. It was first used to discredit us and to portray us as the old socialists. But I don't really mind. When something new is happening, it's normal for people to try to define it in old terms."

If Wang's benevolence toward his labelers seems magnanimous, it is partly because the "left" label has begun to work in favor of the intellectuals.

"I've been reading some New Left articles, and they make me feel very warm, because they remind me of the values my parents used to talk to me about, " says Maria Zhang, 24, a student at the Beijing Forestry University. "I feel like China has lost its bearing by bending too much toward Western ways. We're out of touch with our past and core values."

With such sentiments increasing, Hu has brought a different tone to decision-making in Beijing. His government has said it will look beyond economic growth to issues such as environmental decay, regional inequality and unemployment.

Lu She Zhong, 55, a village leader in central Henan province who's been battling local authorities for six years over unpaid compensation, after his entire village was resettled to make way for the giant Xiao Langdi Dam on the Yellow River, dismisses such talk as "only words" to mollify restive groups.

But Chen says rhetoric is always the first step toward change in China. "That sets the national mood," he says.