Calum MacLeod: What Mandelson sought on the Great Wall of China

'His fancy tickled by Deng's "third time lucky", he questioned this writer for every detail'

Ignore the denials of renewed Cabinet ambition. Peter Mandelson wants back in the firing line, and he's gunning for the top job again. His role model? Canny Chinese Communist Deng Xiaoping, twice banished from the corridors of power, but whose third coming finally led to the big office at the end, and the undying love of the people.

We sat in a car speeding to the Great Wall last October. That brutal, imperial folly stretched before us, but Mandelson preferred the more recent past. His fancy tickled by Deng's third-time-lucky career, Mandelson questioned this correspondent for every detail on the man from Sichuan. Vilified by the nation in the 1960s, disgraced again in the 1970s, Deng recovered to reinvent Chinese Communism, enrich the masses, and rule from 1979 until his death in 1997. Now wouldn't Mandy like to bounce back in such style.

Over-interpretation? Most likely. But what was the architect of New Labour doing in Red China? No less than sowing the seeds of democracy by lecturing on his own party's reinvention. "I gave a talk at the Central Communist Party School," he told me. "And when I mentioned the 'prawn cocktail offensive', I could see all these cadres writing down 'prawn cocktail', and reaching for their dictionaries."

They will find that the lesson of Labour reaching out to big business in the mid-Eighties has already been learnt, as entrepreneurs infiltrate communist party ranks nationwide, despite the opposition of conservatives. And Mandelson's broader message, of challenging entrenched views, changing policy and presentation to suit changing times, also strikes a chord with party leaders on the brink of wholesale generational change.

This May, the Party General Secretary, Jiang Zemin, or his heir-apparent, Hu Jintao, will also lecture at the Party School, for the graduating ceremonies of China's future leaders. Yet thespeech delivered there carries far wider consequence, serving notice of the likely policy themes at this autumn's crucial 16th Communist Party Congress.

Forget Bournemouth or Brighton, and even China's pantomime parliament, which holds its annual session in Beijing this week. The real business of ruling China and setting her course is decided at party congresses convened every five years. And interest is heightened this year by the expected new line-up, spring chickens in their late fifties, and the hope that they will place party reform back on the agenda.

In the mid-Eighties, as Labour wooed the business vote, Chinese reformers lobbied for political change to match the heresy of abandoning Marxist economics. The Tiananmen Square massacre of 1989 silenced such debate, and the bitter example of Soviet troubles has been invoked ever since to justify the party's monopoly on power.

Combined with rising living standards, it remains a powerful argument. Outside Beijing, I introduced Mandelson to Zhang Tong, a wisened and wise village elder, one of the representatives of China's 700 million peasants. "It is still better to have a one party system," Zhang told him. "China is too big; if there are many parties there will be chaos. We need a strong central government."

Over 80 years ago, Mao Zedong chose the foreign creed of communism. Today, his successors also look abroad for answers. While self-preservation remains their ultimate goal, party think-tanks study New Labour, and social democrats across Europe, for clues to managing change in China. Mandelson and other Third Way luminaries are frequently invited to share their experiences.

For now, media control allows Beijing to censor annoying interference such as President Bush's hope, in a speech to Chinese students last month, that one day China's people will choose their own leaders. Yet those same people, from protesting peasantry to swelling middle classes, are already demanding more accountability and transparency. The poll success of New Labour shows Beijing the benefits of being more representative. This autumn's congress should invite businessmen to the party, in an important symbolic step formalising current practice.

There is plenty more to learn. The reformist wish list includes independent judiciary and media, effective supervisory organs, and the expansion of "riceroots" elections. But the very concept of non-party activity is alien. "Government officials asked me: 'How can we create more NGOs'," said Mandelson in Beijing. "I said: 'No, you must create the space for real NGOs'."

China's transformation from Communist rule remains the greatest challenge for the forces of liberalism. Markets alone may not be enough. The party must change its ossified political system, or risk falling to the pressures of a quasi-capitalist economy. Is Hu Jintao the John Smith, Tony Blair or even the Mikhail Gorbachev of China? Of only one thing can we be certain: the Middle Kingdom's capacity to surprise, and survive, much like Mandy himself.