By Ben Blanchard and Benjamin Kang Lim
BEIJING (Reuters) - China celebrated the 120th birthday of Mao Zedong, the founder of modern China, on Thursday, but with scaled-back festivities as President Xi Jinping embarks on broad economic reforms that have unsettled leftists.
Mao has become a potent symbol for leftists within the ruling Communist Party who feel that three decades of market-based reform have gone too far, creating social inequalities like a yawning rich-poor gap and pervasive corruption.
In venerating Mao, they sometimes seek to put pressure on the current leadership and its market-oriented policies while managing to avoid expressing open dissent.
While all seven members of the party's elite inner core, the Politburo Standing Committee, visited Mao's mausoleum on Tiananmen Square, other activities nationwide were toned down.
The state-run Xinhua news agency said that the leaders, including Xi, bowed three times in front of a statue of Mao and payed their respects to his embalmed body, "recalling Comrade Mao Zedong's great achievements."
Xi said Mao was a great person who stuck to his beliefs and won the love and respect of the people but who also made "serious mistakes" like the 1966-76 Cultural Revolution, Xinhua reported.
Still, Xi said Mao's errors should not negate his achievements, echoing previous comments Xi has made in seeking to assuage leftist concern about his agenda and beliefs.
"Comrade Mao Zedong's mistakes in his later years have their subjective factors ... but because of complicated social and historical reasons both at home and abroad they should be viewed and analyzed comprehensively (and) historically," Xi said.
A source with ties to the leadership said that a high profile activity to mark the occasion was necessary even as the party moved to scale back the number of events.
"The attendance of Standing Committee members is to placate leftists after reforms at the third plenum," said the source, who spoke on condition of anonymity to avoid repercussions for talking to a foreign reporter without permission.
China last month unwrapped its boldest set of economic and social reforms in nearly three decades, relaxing its one-child policy and further freeing up markets to put the world's second-largest economy on a more stable footing.
Still, Xi and his team gave themselves until 2020 to achieve "decisive" results - a tacit acknowledgement of the difficulty of the task when the state-run sector championed during Mao's heyday remains strong and when many are unhappy with growing social problems brought by the party's economic reforms.
"The celebrations have to be grand or people will not be happy," said another source, who has ties to the party's traditional leftists.
Mao, who died in 1976, remains a divisive figure.
His image adorns banknotes and his embalmed body attracts hundreds, if not thousands, of visitors a day to Beijing.
While the party has acknowledged he made mistakes, there has yet to be an official accounting for the chaos of the Cultural Revolution or the millions of deaths from starvation during the 1958-61 Great Leap Forward.
NO SIDE SATISFIED?
Xi suffered personally during the Cultural Revolution when his father was jailed. Xi was sent to the countryside to live with peasants, like millions of other young urban Chinese.
While visiting Hunan, the southern province where Mao was born, in early November, Xi said the celebrations for the anniversary should be "solemn, simple and pragmatic," according to state media.
That did not stop Xi from lauding Maoism in several speeches this year, as he sought to appeal to leftists in the wake of a scandal involving Bo Xilai, a former contender for top leadership who pushed an egalitarian, quasi-Maoist agenda until he was felled and jailed for corruption.
"In the end, probably no side will be very satisfied," Zhang Lifan, a Beijing-based political commentator and historian said, referring to how China will mark the birthday.
"The reformers don't think Mao should be commemorated, because he committed crimes, but his supporters think the commemorations aren't enough."
Chinese newspapers have reported that several events originally planned for Thursday have been adjusted or changed completely, including a concert that was supposed to celebrate Mao but which has been relabeled a new year gala.
"The authorities don't want the commemorations for Mao to be high-profile," influential tabloid the Global Times, published by the party's official People's Daily, quoted Wang Zhanyang, director of the Political Science Department at the Central Institute of Socialism, as saying.
"Some regional conservative people and officials with vested interests want to restrain reform by falsely promoting some of Mao's most conservative thoughts, which is not what the party follows," Wang added.
Still, the message appears not to have totally seeped through to Hunan, where many still venerate Mao as a demigod.
The town of Shaoshan, where Mao was born on December 26, 1893, has spent about 2 billion yuan ($329 million) on 12 projects for the anniversary celebration, the official Xiangtan Daily reported.
(Additional reporting by Adam Rose and Huang Yan; Editing by Robert Birsel)