'Adapt or die' Jiang warns Chinese Communist Party

China's president, Jiang Zemin, has told the world's last thriving Communist Party to prepare for greater changes ahead, saying it must "keep pace with the times".

At the opening of the 16th Party Congress in Beijing, Mr Jiang, 76, the party's general secretary, looked back at his 13 years in power, saying the party had survived the upheavals that brought down the Soviet Communist Party and other revolutionary movements around the world.

In a 90-minute speech, Mr Jiang described how the party could continue in power. He called for political reforms, although he ruled out the possibility that China would follow a Western model of democracy.

Police arrested five women who, despite intense security, had managed to get close to the congress at the Great Hall of the People in Tiananmen Square. The five were trying to distribute leaflets.

Mr Jiang, standing beneath the red hammer-and-sickle flag, warned that the party must adapt or die. "We must move forward or we will fall behind," he said. "Whether we can persist in doing this bears on the future and destiny of the party and state." Although Mr Jiang stressed that the party must maintain its iron grip on all areas of the state to guarantee "social stability", he dropped vague and tantalising hints that he recognised that the party needed to change the way it ruled.

He called for "developing socialist democracy" saying it was "essential to expand citizens' participation in political affairs" and necessary to ensure that human rights were respected. "We should establish and improve an inner-party democratic system," he urged the rows of handpicked delegates. "Political restructuring ... must help enhance the vitality of the party and state."

However, Mr Jiang also praised the People's Liberation Army, which brought him to power when it quelled the nationwide pro-democracy protests in 1989. "The party's absolute authority over the army is the eternal soul of the army," he said.

Mr Jiang outlined a plan to keep the party in absolute power, which consisted of broadening its power base so it would represent all classes while jettisoning Marxism as quickly and as decently as possible. The speech was noticeable for the sparse references to Marx, Engels, Lenin, Stalin and Mao and, instead, Mr Jiang often lapsed into fashionable management jargon. He said he foresaw the country "blazing a new trail to industrialisation" by relying on new technologies, above all information technology, to lead the way. He promised to do more to help the losers in the economic reforms, the tens of millions thrown out of work by the restructuring of state-owned industries and the hundreds of millions of peasants still mired in poverty.

Yet the speech gave few clues as to how China would create a functioning welfare system or create more social equality. An engineer by training, like most of those around him, Mr Jiang's greatest enthusiasm is reserved for hi-tech venture capitalism on the American model. "It is like a religion for him," a diplomat said.

This congress will formally endorse the entry into the party of "new social strata", including private entrepreneurs, and will retire the "third generation" leaders, including Mr Jiang. His speech gave no clues about the new leadership although this has been decided.

Mr Jiang also struck a more relaxed tone than in the past. There was less talk of the external threats facing the party and, unexpectedly, he proposed resuming reunification talks with Taiwan, which were broken off three years ago.