Chinese President Hu Jintao warned the ruling Communist Party faced severe "growing pains" as it turned 90 on Friday and said corruption, and alienation from China's masses, could erode public support.

But in a speech on the anniversary of its 1921 founding, Hu gave no sign that the party intended to loosen the iron grip on political power it has maintained for more than six tumultuous decades.

Hu capped months of orchestrated anniversary build-up by praising the party for leading China out of civil war and chaos, but made clear that pitfalls lie ahead as the party strikes an ungainly balance between economic openness and political rigidity.

"The entire party must clearly see that, with the deep changes in the world, national, and party situations, we face many new problems and challenges to improve the party's leadership and rule and to strengthen the ability to resist corruption and risks," Hu said.

Hu, who has headed the party for nearly a decade, singled out rampant corruption as a clear danger to Communist ruling legitimacy.

Corruption by Communist officials is routinely named in opinion polls as a top source of public discontent, and Hu said the anti-graft fight was the key to "winning or losing public support and the life or death of the party".

"Corruption will cost the party the support and trust of the people," the Chinese president warned.

Hu delivered the speech in a ceremony in the Great Hall of the People -- the Stalinist-style monolith at the heart of Beijing -- that was attended by thousands of party leaders and members and broadcast live on state television.

The party has sought to fan enthusiasm in the anniversary run-up through an official outpouring of nostalgia for China's Communist past.

The propaganda blitz has included a stream of laudatory media articles, the singing of "red" songs from Communist China's early years, museum exhibitions and the release of a film glorifying the party's birth.

China also launched a high-speed rail line linking Beijing and Shanghai, and opened the world's longest cross-sea bridge just ahead of the party fete.

But analysts say such campaigns conceal the deep insecurities of a party still named for an ideology it has junked and struggling to address a range of complex problems without the flexibility that democracy affords.

These include an accelerating wealth gap, high inflation, horrific environmental degradation, demands for autonomy from millions-strong ethnic minorities, and regular reports of corrupt and abusive officials that inflame the public.

These and other issues spark tens of thousands of public protests and other disturbances each year, and China has ramped up its ability to put down such outbursts.

"China's Communist Party at 90 is a bit like many 90-year-olds: increasingly infirm, fearful, experimenting with ways to prolong life, but overwhelmed by the complexities of managing it," China scholar David Shambaugh wrote in a commentary piece.

Hu conceded that "the whole party is confronted with growing pains," warning that many party officials were "incompetent" and "divorced from the people".

"It is more urgent than ever for the party to impose discipline on its members," he said.

The practice of securing lucrative party and government positions through connections and backroom deals is considered to be widespread.

Hu vowed a more merit-based personnel system and a drive to recruit talented young members into the 80-million-strong party, about 75 percent of whose card-holders are more than 35 years old.

"(Young members) represent the future and hope of the party," Hu said.

The CCP was established in July 1921 in Shanghai as the brainchild of a dozen intellectuals, and took power in China in 1949 after defeating the rival Nationalists in a long and bloody civil war.

Revolutionary leader Mao Zedong then plunged the country into nearly 30 years of chaos through misguided policies that triggered political purges, famine, and social upheaval, leaving tens of millions died.

Hu made only passing reference to the period.

After Mao's death in 1976, Deng Xiaoping took over and launched a period of reforms that transformed China from an underachieving economic backwater into the world's second-largest economy.

But a small party elite maintains a tight rein on politics, the media and the world's largest military.

Hu paid lip service to democracy and public participation in policy-making, but made clear this would be done under the "leadership of the party" and stressed "stability", signifying no change in the current set-up.

Analysts say China's lack of political reform has fuelled many of the problems now faced by the party and makes it difficult to root them out.

earlier related report
Thousands march on Hong Kong handover anniversary
Hong Kong (AFP) July 1, 2011 - Tens of thousands Friday took to Hong Kong's streets in a carnival-like atmosphere to mark an annual pro-democracy rally on the 14th anniversary of the former British colony's return to China.

The noisy procession saw marchers clog the city's Causeway Bay district chanting and banging on drums, holding up placards and many donning costumes.

Dressed as a police officer, 22-year-old Kitty Hung said she and a group of similarly attired friends came out to highlight the differences between the southern Chinese territory and mainland China.

Hong Kong has a semi-autonomous status within China, which also held celebrations Friday to mark the 90th birthday of the ruling Communist Party.

"Freedom is a core value of Hong Kong and we want to bring attention to Hong Kong's political phenomenon," Hung told AFP, explaining the police costumes were meant to criticise authoritarian-style rule on the mainland.

The city, which returned to Chinese rule in 1997, guarantees civil freedoms not seen on the mainland, with the July 1 march an opportunity for campaigners to show the strength of opposition to Beijing and local authorities.

But anti-Beijing sentiment was just one issue on the minds of marchers, who were expected to number as many as 100,000, about double last year's number. Official attendance figures were not immediately available.

Some lashed out at the territory's government and soaring property prices that have pushed many in the teeming city out of the housing market.

"I think most people cannot feel the government actually cares," Designer Jing Wong, 29, told AFP.

"We have no choice but to be angry. It is too expensive for many people to buy a place on their own."

University lecturer Oliver Choy, 52, said he was protesting government incompetence, holding a sign that depicted a male and female head with a backside instead of faces to show politicians "were not using their heads."

"Why don't (politicians) use their brains -- they just want to please the boss," he told AFP.

"The boss of the government is an even bigger bum," Choy added.

A record 500,000 people took part in the 2003 march, galvanised by an economic downturn and hostility towards the unpopular then chief executive Tung Chee-hwa and his proposed national security bill.

The unexpected show of people power forced the government to shelve the security legislation and was a key factor in Tung's resignation the following year.

"The level of dissatisfaction with the government is very similar to the level in 2003," Michael DeGolyer, director of the research organisation Hong Kong Transition project, told local radio RTHK.

Lawmaker, Lee Cheuk-yan, said many Hong Kong residents were becoming increasingly angry at soaring property prices and a growing income gap.

"People only see prices increasing and they're very frustrated," he said.

Hong Kong officials have repeatedly warned of an asset bubble forming, with Hong Kong's property prices surging past record levels seen in 1997 prior to the Asian financial crisis.

The financial hub, famous for its sky-high rents and super-rich tycoons, has seen home prices surge on the back of record low interest rates and a flood of wealthy buyers from mainland China.

The government imposed new taxes and staged a series of land auctions in the past year-and-a-half to boost supply and bring down prices.

But some properties are still fetching eye-popping prices -- the home of France's top diplomat sold for HK$580 million ($74.5 million).

A study by US consultancy Demographia in January found Hong Kong's home prices were the least affordable in the world.

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