Updated at 11:11 a.m. ET: BEIJING — While Americans celebrate the power of the ballot with the re-election of President Barack Obama, China's ruling Communist Party on Thursday launched a tightly orchestrated gathering in Beijing for a transition of power to a new generation of leaders amid tough challenges.

To the applause of some 2,000 party officials from across the country, outgoing Party leader President Hu Jintao, 70, reaffirmed in a lengthy speech the party's right to govern, with a ringing endorsement of the achievements during his 10 years in office.

In that span of time, China's economy quadrupled in size, leapfrogging to No. 2 from No. 5 in global economic ranking, and amassing the strategic global clout that the country wields today.

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Over 2,000 journalists were invited to the 18th Communist Party Congress inside the cavernous Great Hall of the People near Tiananmen Square.

The week-long event is expected to culminate in the election of Xi Jinping, 59, as China's next top party leader. And when China's parliament convenes early next year, Xi is expected to be named China's president, acquiring by then the full authority with which he will co-manage with Obama the delicate course of Chinese-American relation.

A reforming party
The striking contrast between the Chinese and American models of governance, which were playing out at the same time, was certainly not lost to the media handlers of the Chinese party congress.

Embassy ballots give Chinese a glimpse of democracy ahead of power transfer

In a pre-congress media event, NBC News posed the issue of whether China will eventually adopt democratic reform and popular elections.

''The leading position of the Chinese Communist Party is a historic choice, a people's choice,'' responded Cai Mingzhao, the congress spokesman, dismissing any prospect of multiparty politics.

Hu's swan song Thursday reinforced China's path of gradual reform, which prizes harmony and stability in times of rapid change. Still, China observers concede that a smooth party congress will mark only the second peaceful transfer of power in Communist China's otherwise tumultuous history.

Revelations of vast fortune held by Chinese leader's family may hurt Communist Party image

Before the 2002 change of leadership from then-president Jiang Zemin to Hu Jintao, all succession plans involving the designated heirs of Chairman Mao and even Deng Xiaoping ended up in bloody and tragic power struggles.

China's leadership transition is also seen as a vindication of China's reform that sets an age limit on top leaders, a practice not yet adopted by other modern nations, according to scholars.

The Hu-Wen legacy
Despite China's enormous gains in the past 10 years, the jury is out on the legacy of Hu and his close political partner, Premier Wen Jiabao.

''They have laid the foundations of a meaningful social safety net, in terms of health insurance, retirement pensions, unemployment benefits, and more recently subsidized housing while keeping a rather high economic growth rate,'' said Jean-Pierre Cabestan, a professor of government and prominent China scholar at the Hong Kong Baptist University.

''But 'lay the foundations' is important because a lot remains to be done in terms of reimbursements and coverage,'' Cabestan told NBC News.

''Hu has introduced a series of very important concepts such as scientific concept of development, harmonious society, and pro-people approach but has yet to implement them,'' said Bo Zhiyue, expert on China's elite politics at the National University of Singapore.

Chinese say one child is enough as Beijing weighs end of policy

Premier Wen represents the ''human face'' of the Chinese communist leadership, according to Li Cheng, a top China scholar of the Brookings Institution.

''Some critics may doubt the sincerity of Wen's human face, but it was effective among a vast number of farmers and migrant workers in the country, especially for groups like AIDS orphans, coal-miners and families of earthquake victims,'' Cheng said in an earlier email interview.

''Liberal intellectuals in the country consider Wen as the most important political ally, especially for Wen's long-standing argument for universal values of democracy,'' he added.

However, recent reports of corruption involving family members and a protege seem to have tarnished both Wen and Hu, with Wen reportedly urging an investigation into alleged hidden family fortunes to clear his name.

The challenges of Xi Jinping
China's new leadership to be announced next week promises to be ''the most diversified generation of leaders,'' Cheng said.

''This diversity can be found in the leader's educational backgrounds, in their career paths, in their policies and world views,'' he further said.

Read more China coverage on NBC's Behind The Wall

And for Xi Jinping, who will head this leadership, maintaining ''delicate balance on several fronts'' will be the key challenge.

''How to crack down on the vested interest groups of state-owned companies but not undermine the national competitiveness and lose the support of this key power base of the party? How to be seen as the top leader who places China's national interests above anything else but at the same time maintain a good personal relationship with the United States? How to satisfy the bureaucratic interests of the military but avoid a military conflict in South China Sea, East China Sea or elsewhere? How to pursue some bold political reforms but not lose control?'' are the tough choices, according to Cheng.

''Anti-corruption, clarifying the division of labor between the party and the government, and establishing the rule of law'' are the top challenges, according to Zhiyue.

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Cabestan however cited ''regime legitimacy after the avalanche of corruption scandals'' as a major issue.

Xi has to deal with a ''plutocratic bureaucratic elite increasingly entrenched in its vested interests.''

''He will need to reform in order to consolidate and save the regime but at the same time he will have to overcome huge obstacles and hurdles to succeed. A kind of mission impossible,'' Cabestan warned.

NBC Researchers Johanna Armstrong and Liu Yanzhou contributed to this report. 

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BEIJING – When news broke earlier this year that the family of disgraced Chongqing party boss, Bo Xilai, had amassed $160 million in ill-gotten earnings, the story was seen as a proverbial pin in the balloon China’s ruling Communist Party has long floated to its people about its leadership.

In China the storyline went something like this: local-level officials could be and have been corrupted. But China’s highest leaders were incorruptible, pious men who were sympathetic to the plight of the country’s citizenry.

Bo’s corruption and the transgressions of his inner circle have been very publicly renounced by the Communist Party. His wife, Gu Kailai, was found guilty of the murder of British businessman Neil Heywood while his former deputy police chief, Wang Lijun, was jailed and held up as a traitor after his now infamous flight to the American Consulate in Chengdu this past winter.

News Friday that Bo had been stripped of his last party title appears to pave the way for a convenient resolution of the scandal before a critical once-in-a-decade leadership changeover on Nov. 8 at the 18^th Communist Party Congress.

But the revelation in Friday’s New York Times that the family of Chinese Premier Wen Jiabao controlled assets of at least $2.7 billion dollars posed a grave threat to the Party’s preferred narrative of being the honest broker that brings prosperity to all.

NYT report: China leader Wen Jiabao's family has amassed billions in assets since '98

So much so that Beijing was forced Friday to kick the censorship gears up a notch, blocking the English- and Chinese-language websites of the New York Times, blacking out mentions of the story on independent cable news channels carried in China, and censoring the names of Wen’s family and other mentions of the story on China’s Internet.     

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At a Foreign Ministry briefing Friday, a spokesman gruffly stated that the Times’ report "blackens China's name and has ulterior motives." When asked why the paper’s website was being censored, he said, "China manages the Internet in accordance with laws and rules."

One piece of information not censored, however is a report released Thursday by the research group, Global Financial Integrity, which estimated $3.7 trillion dollars had been pilfered and smuggled out of China from 2000 through 2011.

The report also estimated that $472 billion -- or 8.3 percent of China’s 2011 gross domestic product -- had been stolen last year alone.

Just how guilty Wen is in his family’s nationwide money grab is up for debate. As the Times’ report noted, a 2007 diplomatic cable published by Wikileaks quoted an executive who noted that the premier was aware of his family’s lucrative business ventures: “Wen is disgusted with his family's activities, but is either unable or unwilling to curtail them."

Wen’s failure to reign in his family’s financial activities threatens to undermine the carefully scripted public persona he has cultivated over the years.

Nicknamed “Grandpa Wen” by state media, the premier has relished opportunities to be photographed connecting with members of rural communities and blue-collar workers. During the 2008 Sichuan earthquake, he was a near-daily presence in news reports about the disaster and government rescue and recovery efforts.

He has also been dogged in his calls for economic reform and greater income equality. At this year’s National People’s Congress, during what was likely his last major press conference in a 45-year-long political career, Wen called for reform.

“Even with a single breath left, I am ready to dedicate myself fully to the cause of China’s reform,” he was quoted as saying.

Although Wen was speaking months before the release of the Times piece, he still apparently felt the need to address whispers about relatives trading on the family name. “I have never pursued personal gain,” declared Wen, before adding, “History will have the final say.”

Communist Party officials hope to control the writing of history. But the institution is starting to feel the strain of having to push an ever heavier stone uphill. The Internet has made information more widely available than ever before on the mainland; what censors just 10 years ago could make disappear – sometimes literally -- has become more problematic today.

Still, while completely squashing a story in China seems to no longer be possible, it may not be Beijing’s intention or even in its best interest to stifle information. Some Chinese have found ways to circumvent the Great Firewall, while millions have gone abroad, where they have been exposed to the world beyond. Allowing them the safety valve of relatively free information does not pose an immediate threat to Party rule for now.

That’s because the vast majority of China’s population appears to be apolitical, disinterested in or unwilling to engage in any meaningful political discourse. This situation is changing, quickly at times.

For now, however, the censorship of unpalatable stories is an effective albeit cumbersome tool for the Party to wield.

As for the New York Times, its fate in China looks dim. Just two months ago, Bloomberg ran a similar story that showed how the family of China’s likely future president, Xi Jinping, had also accumulated a vast business fortune – though unlike Wen’s kin, Xi’s immediate family did not appear to be reaping the same economic benefits.

Bloomberg’s website has since been blocked on the mainland. 

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Updated at 12:25 p.m. ET: BEIJING -- The wife of ousted Chinese politician Bo Xilai and a family aide have been charged with the murder of a British businessman, the government said Thursday, pushing ahead a case at the center of a messy political scandal that exposed divisions in the country's leadership.

The official Xinhua News Agency reported that the prosecutor's indictment said Bo's wife, Gu Kailai, had a falling out with Briton Neil Heywood over money and worried that it would threaten her and their son's safety. Gu and the aide, Zhang Xiaojun, are alleged to have poisoned Heywood together, the report said. Heywood's death in November was attributed initially to a heart attack or excessive drinking.

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"The facts of the two defendants' crime are clear, and the evidence is irrefutable and substantial. Therefore, the two defendants should be charged with intentional homicide," Xinhua said.

It did not give a date for the trial, but a family lawyer told Reuters it was likely to take place on August 7-8.

Thursday's brief report is the first official news that the case against Gu is proceeding since the announcement three months ago that she and Zhang were being investigated and that Bo was being suspended from the powerful Politburo for unspecified discipline violations. The Xinhua report did not mention Bo's case or a separate party investigation into Bo.

Prosecutors have interrogated Bo and Zhang and have "heard the opinions" of their defense lawyers, Xinhua said.

The scandal has exposed the bare-knuckled infighting that the secretive leadership prefers to hide and affirmed an already skeptical public's dim view about corrupt dealings in the party.

City divided by disgraced Communist leader's legacy

Disappeared from public view
Since Bo was dismissed in March, he and his wife Gu, formerly a powerful lawyer, have disappeared from public view and have not responded publicly to the accusations against them.

The charges were filed in the eastern city of Hefei, Xinhua said Thursday. It did not say when exactly the indictment was issued or when the crime occurred and why the case is being prosecuted in Hefei and not in Chongqing, the city Bo ran as Communist party secretary and where the couple lived.

But according to Si Weijiang, a prominent lawyer in China who is followed by 170,000 people on his microblog, Hefei, in eastern China's Anhui Province, was selected due to its political reliability.

Wang Shengjun, who is the chief justice of China's Supreme People’s Court, is from Anhui and the province has, according to Si, built a reputation of being politically reliable and harsh on defendants.

"The case being filed at Hefei, will set Chief Justice Wang's mind at ease," Si wrote Thursday.

Scandal sends China's netizens into a feeding frenzy

In another post, Si noted the intense political ramifications of this case.

"This is a political case. No accidents is success. So it [the court] must be a place that can be trusted," he wrote.

But Fang Hong, a Chongqing resident featured in a piece by NBC News in May, hailed the prosecution move as a "vindication of my criticism" of Bo's rule.

"They tried to destroy the rule of law so as to make it convenient for them to murder people, and now they will get what they deserve," he told NBC News.

"This case is being handled according to the law," he said, adding that "some people with limited understanding wrongly think it is a political striuggle, but it is not. ... What the law says is what they will get."

 

Political ascent stopped
Thursday's announcement comes months before the ruling Communist Party unveils a new top leadership.

Before his ouster, Bo was one of China's most powerful and charismatic politicians. The son of a revolutionary veteran, Bo was seen as a leading candidate for a position in the Politburo Standing Committee, the highest ranks of power, when a younger group of leaders is installed later this year.

Son of sacked Chinese official fights back

On his rise, Bo led high-profile campaigns to bust organized crime and to promote communist culture. In doing so, however, his administration ran roughshod over civil liberties, angered some leaders and alienated others with his publicity seeking.

The removal of Bo has triggered rifts and uncertainty, disrupting the Communist Party's usually secretive and carefully choreographed process of settling on a new central leadership in the run up to its 18th congress.

Left-wing supporters of the charismatic Bo have defended him as the instigator of a much-needed new path for China, and many of them see him as the blameless victim of a plot.

Behind the Wall: Full NBC News coverage from China

The 18th Party Congress, scheduled to be held late this year, will appoint that leadership. President Hu Jintao and Premier Wen Jiabao will then step down from their government posts at the National People's Congress in early 2013, when Vice President Xi Jinping is likely to succeed Hu as president.

Growing credibility gap
Analysts here agree that the legal steps announced Thursday are part of the authorities' effort to dispose of the case and remove a major distraction before the once-in-a-decade leadership succession later this year.

However, this week has been a week of disruptions that have kept government propaganda officials and censors busy.

Full international news coverage from NBCNews.com

Besides the ongoing saga of Bo, Beijing this past weekend dealt with the worst flooding in nearly six decades. Just as news of Gu’s charges came out, word also broke that the death count from the flooding, which previously had stood at 37, had been bumped up to at least 77. Many Beijing residents had been highly dubious of earlier government estimates of the death toll, highlighting the party's credibility gap.

The news also came on the eve of the 2012 Olympics in London, where China hopes again to top the tables in gold medals.

Still, the government was not taking any chances: the comments section on the official Weibo account of popular Chinese state newspaper, People's Daily, was turned off for the post regarding Gu's murder charges.

The Associated Press and Reuters contributed to this report.

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BEIJING – It’s the biggest news in China in a long time – and China’s netizens are finding ways to get around censors to gossip and get the latest online rumors.

The scandal, which has spread to the New York Times front page and other Western news outlets, is centered on Bo Xilai, the former Communist Party secretary of Chongqing, China’s biggest municipality with 30 million residents, and his wife, Gu Kailai, who is a murder suspect in the death of British businessman Neil Heywood.

Before the bombshell announcement from China’s official news agency, Bo had been considered one of the top contenders for the country’s highest echelon of power, the standing committee of the politburo of the Communist Party, in the upcoming power reshuffle this fall.
 
No further official information has been released since last Tuesday’s news, but it still seems as if China’s entire population of 1.3 billion people is talking about the scandal. And despite the government’s best efforts to squelch online chatter, the country’s savvy computer fans have come up with novel ways to circumvent Beijing’s watchdogs.  

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Foreign 'rumors'
Foreign media have continued to feed the voracious appetite for more juicy details from Chinese netizens.

Many in China have made use of VPNs (virtual private networks) to circumvent the Great Firewall to access these Western reports, as well as overseas Chinese websites like Boxun, or Hong Kong and Taiwanese media reports. 

Every time a new article comes out, it’s instantly translated into Chinese and posted on Weibo, China’s most popular Twitter-like service, followed by tons of comments and re-tweets.

The foreign reports have delved into everything about Gu Kailai, Bo’s wife, from her business dealings to her friends and close personal relationship with Heywood.

The extravagant lifestyle of Bo Guagua, Bo Xilai and Gu’s only son, has also come under the spotlight in foreign news reports – from his hard-partying ways at expensive private schools such as, Harrow, Oxford and Harvard, to his penchant for fast cars.   

And on Tuesday Reuters added a new wrinkle to the story with a report that Bo initially agreed to a police probe of his wife's role in the murder before abruptly reversing course and demoting his police chief, which eventually led to the downfall of both men.

The government has applied every method possible to silence not just the local press, but the public passing along tidbits from the foreign reports.

Posts regarding the Bo scandal, defined by the official media as “rumors,” are usually deleted quickly after they show up online. Major web portals have been ordered to intensify their monitoring of allegedly scurrilous reports. And government mouthpieces like CCTV and Xinhua have appealed to the public to stop spreading rumors.

Chinese authorities do not issue empty threats – at least six people were recently arrested for posting gossip about a rumored military coup in Beijing.

Getting around the Great Firewall
But cracking down on gossip is an enormous project in China. The country’s sophisticated netizens – who now number up to an estimated 500 million – pass along rumors using puns, hints and words with different Chinese characters but similar pronunciation to key words.

For instance, the word “Bo,” which also means “thin” in Chinese, has been replaced by the term “not thick.” Many posts have called Bo “the not thick governor” in order to slide past censors.  

Meanwhile, some witty netizens have referred to the city of Chongqing as “tomato,” because tomato is pronounced “Xi Hong Shi” in Chinese, which sounds the same as “Western Red City.” That seemingly cryptic reference is to the “red revolutionary song” campaign initiated by Bo when he was governing Chongqing. As the son of a major leader of China’s Communist Revolution, Bo was also famous for promoting a campaign to revive Cultural Revolution-era “red culture.”

“This is the most remarkable event [in China] ever since 1976, when the Gang of Four was arrested,” said Yao Bo, a China-based Internet observer and blogger, in a phone interview with NBC News. He was referring to when the leaders of China’s disastrous Cultural Revolution were publicly purged from the Communist Party a month after Chairman Mao’s death – marking the end of one of China’s most turbulent political eras.

“When people used to talk about politics on forums or bulletins before, it was censored much more easily, since such discussion always had a topic. Weibo is like a virus, it can share information much faster and becomes uncontrollable,” Yao said.

‘We Firmly Support the Central Party’
The government has tried to introduce a counter-campaign of sorts by ordering all major newspapers and TV news channels to pledge their loyalty to the Communist Party. Within a few days after Bo’s scandal was exposed, a variety of publications had editorials with the same headline: “We Firmly Support the Central Party.”
 
Some leftist websites that openly supported a return to a Maoist-like regime have been mysteriously shut down in recent days – another signal suggesting its best time to stick to the party line. None of them has publicly stated that they are following an official order, but they all went into “maintenance-mode” simultaneously.
 
Over the last few days less gossip devoted to the Bo scandal has appeared online, which Yao attributed to both censorship and the political nature of the scandal. 

“What Bo did was to pull China in an extreme direction when nobody knew where it was going. The leftists say ‘it’s a red trial,’ the rightists say ‘it’s a disaster.’ Now he’s down, people have nothing to argue about. This is a signal sent by the highest leaders that they do not wish to go back to China’s past.”
 
“This has made netizens realize one thing: rumor is another name for truth,” said Yao.

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BEIJING – The political shock waves set off from within a U.S. diplomatic compound by a disgruntled ex-cop in the southwestern city of Chengdu have culminated into what may well be China’s biggest political scandal in years.  

Already removed from a powerful regional post, the controversial but high-flying political star Bo Xilai has been purged from all his positions in China’s ruling hierarchy, and now his wife has been named a murder suspect, according to official announcements.

It was Bo’s former police chief and trusted aide, Wang Lijun, who ultimately led to Bo’s downfall and the criminal detention of his wife for her suspected role in the death of a British businessman. 

In February, Wang was said to have sought asylum in the U.S. consulate in Chengdu, spending roughly 30 hours there. Now in government hands, the former police chief has reportedly turned against his boss, with incriminating evidence of the Bo family’s crimes and corruption.

“No Hollywood movie can match this Chongqing political drama,” observed prominent blogger Michael Anti, referring to the megacity by the Yangtze River, over which Bo held sway for five years.

And coming in the midst of China’s once-in-a decade leadership transition – the nation’s first political succession in the glare of Internet-driven public opinion and perhaps its most challenging ever – the political upheaval has torn away the aura of leadership unity, with sobering implications for China’s future.

 

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To Communist Party, former favored son is ‘dead’
The latest bombshell came on Tuesday when China’s state-run news agency Xinhua reported that Bo’s wife Gu Kailai was detained and is being investigated for her suspected role in the “intentional homicide” of British businessman Neil Heywood – once a close family friend.

 

The other suspect in Heywood’s death is Zhang Xiaojun, who is described as an “orderly” working in Bo’s family home.

An inquiry has been re-opened on the basis of information provided by Wang, the ex-police chief, in connection with Heywood’s death. His death last November was originally blamed on “excessive” alcohol, but now poison is suspected, with a possible motive of economic disputes with the Bo family.

'Jackie Kennedy of China' suspected in death of British businessman 

Bo – a princeling, or son of one of the Communist Party elders, Bo Yibo - gained national fame for his own crackdown on crime and corruption and for his effort to revive a Maoist-era “red culture” movement.  He attempted to use the so-called Chongqing model of development as a jumping board for joining the highest leadership body in the power transition later this year. The Chongqing Model emphasized state-led investment, with development zones, transportation links and incentives to lure business, according to Bloomberg.

“He was bound to fail,” said Professor Hu Xingdou, an analyst and frequent government critic. “He was going against the tide with his Chongqing model that was repeating the methods of the disastrous Cultural Revolution.”

With the announcement of Bo’s wife’s detention, China’s Communist Party seemed to officially disown the former favored son.  

Bo’s conduct has “seriously violated the party’s disciplinary rules, damaging the affairs of the party and the country and badly harming the image of the party and the country,” the People’s Daily, the Communist Party’s flagship newspaper declared Wednesday.

The leaders’ decision over Bo “was signaling that they were able to act very quickly, to make a decision on it and to get it over with as soon as possible because they do not want to derail the actual transition that’s coming later in October this year,” according to Damien Ma, a top China analyst at Eurasia Group, a consulting firm.

Ma dismissed suggestions that Bo’s dismissal reflects any factional fighting within the Communist Party or that it would lead to Tiananmen Square protests-style turmoil. “No, him alone is not going to create another 1989,” he said.

China’s leaders essentially disowned him “very quickly, and that was clearly to show to the rest of the Party that Bo Xilai is dead; do not support him.  It’s telegraphing to his supporters that this is done, we’ve made the decision, let’s move on, I think that’s what the message is,” said Ma.

China’s challenging future
“The decision showed that the top leadership has achieved unity where before there might have been differences of opinion,” concurred Hu.  “And this unity is good for leadership succession and also good for social stability, because now no one will sympathize with Bo.”

The professor also described as “understandable the crackdown on Internet rumors while deliberation was going on, but now that there is leadership unity, it is natural to allow the freedom to comment.”

Moreover, for Hu, the decision also showed the “determination” to fight corruption and crime. “But it was accidental in this case because without the Wang Lijun incident, Bo’s crimes and corruptions might not have been exposed,” he added.

Ma was skeptical about the idea that Bo’s case had anything to larger political reform.

“The Communist Party is trying to institutionalize a lot of the norms and procedures, but at the end of the day, these mass-scale personalized politics happen, and they happen with a lot of fierceness and unpredictability,” he said, referring to the impact of Bo’s case on succession politics.

As for the challenges for China’s next generation of leaders? 

“I would say that, over the next decade, political and social risks in China are actually going to be more challenging and more difficult than the past 30 years combined,” said Ma. “They are facing a lot of issues they’ve never dealt with before, primarily socio-economic inequalities and political issues that are brought out by this enormous economic growth, and they haven’t had time to pause and think about what to do about them.  Frankly, this is a very challenging decade for China internally.”

Social media afire
Not surprisingly, China’s blogosphere spun into a frenzy in the hours before the fate of Bo and his wife was officially announced, culminating in a face-off between netizens and Chinese Internet authorities.

As early as Tuesday afternoon, people forwarded posts that “a very important announcement” would be made on the primetime news program. By the time the news was finally read out on the late evening bulletin at 11 p.m., virtually every post on Weibo, China’s most popular Twitter-like service, was about the fall from grace of Bo and his family.

Meanwhile, a battle between the online “rumor spreaders” and government “rumor cleaners” raged on.  Spokesmen from leading Chinese websites such as Baidu, Sina and Tencent pledged on camera they would do their best to develop and deploy an advanced prevention system—fortified with human monitors 24/7 to prevent the spread of false information.

“We will absolutely prevent Weibo from becoming a hotbed of rumors,” said Chen Tong, the chief editor of Sina.com which hosts of Weibo.

But rumors – especially in China – often spread too quickly to contain.

And, it would appear, sometimes stories that start as rumors end up being true.

Months ago, people were talking about Heywood’s mysterious death and speculating about Bo’s ouster, but the posts always wound up being deleted minutes after being posted.

“While you are trying to refute a rumor, that rumor becomes true. Why bother to refute? Today’s rumor is tomorrow’s truth,” said one user called Yuan Tengfei on his Weibo page.

“You want us to sing red songs, but you are more black than the black society. This is sarcastic,” said another Weibo user called Longcan.  (In Chinese, “black society” means mafia.)

Boxun – an overseas Chinese Website censored in China for its bold reporting on mainland politics – fed sleepless, fascinated Chinese readers with even more dramatic rumors soon after last night’s news.  Boxun’s latest report alleges that Mrs. Bo was involved in multiple murders and that the order for getting rid of Heywood came directly from her husband, because the Englishman knew the family had transferred millions of dollars of assets to foreign countries.  (A common practice among many of China’s wealthy families.) 

Teng Biao, a prominent human rights lawyer, joked on his Twitter page: “I almost want to write a movie script. Mafia, affair, international espionage, guns, murder, trial, princeling, coup. This movie would be a big hit."

Researcher Isabella Zhong contributed to this report. 

 

Updated at 9:45 p.m. ET: The Chinese Communist Party suspended high-flying politician Bo Xilai from its inner circle Tuesday following speculation that he is connected to the murder of a British businessman, China’s news agency Xinhua reported.

In addition, Bo’s wife, Gu Kailai, once a celebrated lawyer, was jailed, as was a Zhang Xiajun, who worked in the family’s home, the Guardian of London reported.

Bo, 62, had been suspended from his position as Communist party boss in Chongqing last month after the city’s former police chief defected to the U.S. Consul and alleged that Bo had ties to the murder.

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The British businessman, Neil Heywood, was found dead in a hotel room in Chongqing on Nov. 15. At the time, police said he died of alcohol poisoning, but doubts were raised later and the U.K. embassy asked Chinese authorities to investigate further, the BBC reported.

The news agency said that Chinese law enforcement determined that Heywood had been killed and that Gu and Heywood had been fighting over unspecified “economic interests.”

Days before he was dismissed, Bo said at a news conference that some people were pouring “filth on my family.” He and his wife later disappeared from public view.

Fall from grace: China leadership contender Bo Xilai sacked

British Foreign Secretary William Hague said Tuesday he welcomed China's announcements on its investigation.

"It is a death that needs to be investigated in its own terms, on its own merits without political considerations," Hague told BBC television.

The decision to banish Bo from the Central Committee and its powerful, 25-member Politburo effectively ends the career of China’s most brash and controversial politician.

Bo and his wife had been called the “Jack and Jackie Kennedy of China,” according to the BBC. The son of a prominent Communist leader, Bo had steadily climbed the party ranks; observers of Chinese politics believed he would have been a contender when the party chooses its top leadership later this year, as it does once a decade.

Gu, an accomplished lawyer who also came from an influential Communist family, closed her law practice as her husband became increasingly powerful. In recent years, her health declined, a family friend told the BBC, and she stayed home to read books.

Ed Byrne, an American lawyer from Denver, Colo., told the BBC that when he knew Gu, she was attractive, charismatic and funny.

“They were the modern liberal element there," Byrne said.

Reuters and NBC News contributed to this report.

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NEWS ANALYSIS

BEIJING – Wednesday’s conclusion of the National People’s Congress seemed to signal the end of Prime Minister Wen Jiaobao’s chapter in Chinese history.

It’s been widely reported though not yet confirmed that Wen—along with President Hu Jintao—is due to step down later this year. 

But little did we know Wen would take the opportunity to carry on a tradition enjoyed by his meddling predecessors: publicly shaking up the political field one last time and consequently sparking the biggest political scandal the nation has seen in years.

At his final press conference yesterday, the senior Chinese leader caused a stir when he criticized the leadership of Chongqing, one of the world’s largest municipalities, for its handling of the Wang Lijun incident, when the former deputy mayor of the western megacity allegedly tried to defect to the United States.

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Shattered leadership dream
The comment was viewed as an ominous sign for the future of Chongqing’s Communist Party secretary, Bo Xilai -- Wang's former boss. Bo, a tough but charismatic crime-fighting politician rapidly became a national figure through self-promotion more often associated with Western politicians.

In particular, Bo’s ruthless crackdown on organized crime in Chongqing and his promotion of Communist rhetoric and values through vehicles like “red songs,” soon gave him a national following that seemed to position him for ascension to the ultimate seat of power: China’s nine-member standing committee, which will be selected later this year.

That dream shattered this morning.

Fall from grace: China leadership contender Bo Xilai sacked

China’s state news service, Xinhua, issued a terse statement announcing that Bo had been replaced by Zhang Dejiang – currently vice premier of China’s state council – as Chongqing Party chief.

The announcement of Bo’s fall from grace was a bombshell for China’s public, who rarely get such a clear look at the political battles Chinese leaders prefer to fight behind closed doors. Bo’s dismissal quickly became the top trending topic on China’s Twitter-like service, Sina Weibo, generating an astounding 4 million tweets in the hours following the announcement.

While some netizens were quick to mock the alleged corruption of a supposedly virtuous politician, others were quick to defend Bo, whose campaign against organized crime captured the imaginations of disenfranchised people nationwide.

“I just want to have a safe and stable life… Bo gave us hope,” wrote one person on Weibo.

Si Weijiang, a Chinese lawyer, countered,  “There's no need to be happy....Sometimes people do need what the leftists offer.”

It’s a dramatic political fall for the 62-year-old Bo, who just weeks before appeared to be on the cusp of becoming part of the Communist Party elite.  

Rapid rise to top
The first public sign of faltering emerged when his vice-mayor Wang Lijun spent the night at the U.S. consulate back in February. It was widely believed that he was seeking refuge after coming under a government investigation for corruption.

Prior to becoming vice-mayor, Wang had spearheaded Bo’s signature political moment: a three-year campaign against criminal gangs in Chongqing that resulted in thousands of arrests and 13 executions. Dubbed the “Smash Black” campaign, the stunt was warmly received by Chongqing’s citizens, who had long bristled at the brazenness of organized crime in the region.

Despite the acclaim that came with their success in smashing organized crime in Chongqing, the two were not immune to criticism. Like so much here in China, the line between business and governance was blurred, and Wang soon found himself embroiled in an economic war between two local moguls.

When one of the Chongqing businessmen was arrested earlier this year, the man claimed he had an audio tape of Wang threatening him and warning him to leave the other mogul alone.

Wang was soon the focus of an investigation that threatened to bring an end to his political career. The very fact that the inquiry was allowed to happen – an act that can only occur with specific authorization from the highest levels of the Communist Party – may have signaled to Wang that his fate was sealed.

He snuck off to the U.S. Consulate in Chengdu, where both Chinese and embassy officials confirmed he spent the night before leaving on his own accord. However, officials on both sides have declined to comment on what was discussed between Wang and U.S. consulate officials that night.

Nonetheless, the slightest possibility that Wang might have revealed sensitive secrets about the Communist Party’s inner workings was not only a massive embarrassment to his boss Bo – who had handpicked Wang as his right-hand man years before – but also a crisis that made Bo a potential political liability with China’s greatest economic rival, the United States.

The incident also opened Bo up to criticism from the ruling elite’s more liberal factions who were outraged by his anti-crime campaign, the manner of which critics say demonstrated a blatant disregard for the criminal process.  In addition, his embrace of leftist policies in everyday life through “red songs,” text messages and a friendly approach to state-owned enterprise helped paint Bo as a polarizing threat to China’s liberalizing voices.

And it appears that Wen Jiabao may have shared those concerns.

Charismatic as he is controversial, Bo had been a wildcard with the potential to alter the dialogue in China’s influential nine-member standing committee, which sets economic and social policy for the nation.

Bo’s dismissal means that a potential voice of opposition to the economic and social map that Wen and Hu have laid the groundwork for over the past eight years has been removed.

Proving once again that in the world of Chinese politics, national stability reigns supreme.

NBC News’ Bo Gu and Isabella Zhong contributed research to this report.