Speaking to a largely foreign audience this week, Premier Wen Jiabao reiterated his commitment to reforming China’s political structure and welfare state. Although Wen’s reform agenda appears to have gained little traction, the fact that he persists in speaking out about the shortcomings of the Chinese model of government suggests that there may be a battle going on behind the scenes that could affect next year’s change in leadership.

Wen addressed a World Economic Forum in Dalian, northeast China on Thursday where he admitted that his administration hadn’t done enough to narrow inequality and root out corruption in the public sector. Specifically, the premier urged a stricter adherence to the rule of law.

The most important mission of a ruling party is to abide by and act in strict accordance with the Constitution and the laws. The party should not replace the government in governance and problems of absolute power and overconcentration of power should be redressed.

Although shrouded in the sort of cautious generalizations that are becoming of a leading Chinese government official, Wen’s implicit criticism of the Community Party was unusually blunt. The party abuses its power, he said, and stands in the way of a more efficient, more accountable government. It is a problem that is not to be underestimated as the ruling party’s legitimacy depends almost entirely on China’s enormous economic expansion — a process that can’t go on indefinitely.

Among the urban elite there is a growing political awareness. Entrepreneurs and professionals are increasingly critical of economic planning while the lack of political freedoms has inspired minor protests in the otherwise prosperous coastal regions.

Thousand of demonstrations in fact take place across China every year. The Chinese state spends as much on internal security as it does on external defense and fueling the unrest is not merely forced relocation, pollution or corruption; it’s a lack of transparency and accountability on the part of Communist Party bureaucrats which makes it frustratingly difficult for ordinary people to see that their grievances are addressed.

One way of improving accountability would be introducing democratic reforms from the local level up. Chinese people haven’t had any real voting power beyond the village level for decades. Wen on Thursday promised that eventually, they would. “People’s democratic rights and interests prescribed in the Constitution must be protected,” he said.

The most important ones are the right to vote and to stay informed about, participate in and oversee government affairs.

As the Chinese become richer, educated and more worldly, they will be tempted to take matters into their own hands. Prosperity isn’t enough for the middle class masses in the east — even as it hasn’t reached hundreds of millions of people more in the western hinterland yet.

Wen has long advocated a broader growth strategy that includes the country’s largely agrarian and still destitute countryside as well as an extension of China’s social safety net for the poverty stricken everywhere.

In order to diversify the Chinese economy and finance increased welfare spending, the state will likely have to cut subsidies and subsidized loans to companies, real estate developers and other vested interests that have allies in the party. In other words, it will have to root out the very corruption that Wen spoke about.

With major changes in political leadership expected next year, it may prove difficult for the ruling generation to implement such reforms however. Hu Jintao is due to step down as party secretary next year. Wen will make way for a successor in 2013.