As the Chinese Communist Party marks its 90th birthday on July 1 with fanfare and self-congratulatory rhetoric, it is also pulling out all the stops to defuse unprecedented challenges to the party’s supremacy.

Since a series of “color revolutions” swept the Middle East and North Africa earlier this year, state-security units have gone into overdrive, detaining hundreds of dissidents, public intellectuals, NGO activists and human rights lawyers.

While the leadership under President Hu Jintao seems convinced that “hostile anti-China forces” presumably led by the US are trying to subvert the country, the prime threat to the CCP’s proverbial “long reign and perennial stability” doesn’t come from any Western conspiracy.

Given the central government’s wealth – it holds US$3 trillion in foreign-exchange reserves – an economic crisis precipitated by factors such as the bursting of the real-estate bubble is unlikely to derail the regime. And the party’s labyrinthine control apparatus is probably viable enough to prevent the estimated 180,000 cases of riots and disturbances a year from throwing the party out of power.

The party’s worst enemy is itself, or more preciously, its fast-declining ability to effectively manage the affairs of 1.4 billion people. Despite its bloated bureaucracy, Beijing has been unable to tackle age-old malaises ranging from contaminated foodstuffs and a deteriorating environment to endemic corruption. And it is the CCP’s worsening problem-solving capabilities that will likely prove its undoing.

A few examples suffice to illustrate this conundrum. While Chinese consumers have for more than two decades been hit by fake food, liquor, medicines and other sub-standard and dangerous merchandises, the government should have taken the milk-powder scandal of 2008 as a wake-up call.

Six babies were killed and hundreds of thousands of infants poisoned after consuming melamine-tainted milk powder. Yet despite the government’s vow to clamp down on unscrupulous manufacturers, the situation keeps growing worse. Flooding the market these few years have been sulfur-steamed ginseng, plaster tofu, dyed bread, salted duck eggs containing carcinogenic chemicals, artificial honey, donkey-hide gelatin, and cooking oil that has been “recycled” from used oil and lard scooped up from the gutters. And to top it all: contaminated dairy products, this time milk that has been “enriched” by hydrolyzed leather, returned with a vengeance this spring.

Then there is the government’s failure since the start of the reform era 33 years ago to do anything about environmental and ecological degradation. Some 25 percent of China’s land area has succumbed to desertification. A “worst-in-50-years” drought hit five downstream provinces of the Yangtze River in the spring. The recent protests in Inner Mongolia were caused by allegations that Mongolia’s once-pristine grasslands had been systemically polluted by Han Chinese-dominated mining and industrial companies.

Pollutants from coal mines, factories, and other sources have been responsible for an upsurge of cancer, now the nation’s No. 1 killer. It doesn’t help that the government has done nothing to stop cigarette smoking. A recent report said that by 2030, 3.5 million Chinese could die each year from smoking-related diseases, compared with 1.2 million casualties in 2005.

Consider also Beijing’s failure to do anything about “land grab,” which is a major cause of protests and riots in China. For more than a decade, residents in urban and rural areas have been intimidated by greedy developers – who are often in cahoots with corrupt officials – to vacate their domiciles in return for puny payoffs.

The government waited until early this year to lay down rules forbidding land expropriation or at least guaranteeing sufficient compensation for forced-out residents. The recent attempt by suicide-bomber Qian Mingqi – whose house had been confiscated by the authorities ten years ago – to vent his frustration by blowing up two government buildings in Jiangxi Province, however, shows there isn’t much trust in these belated regulations.

What is behind this administrative dysfunction of humongous proportions? On the surface, it seems a mere case of bureaucratic buck-passing. For example, one reason why pollution has gone unchecked is that the Ministry of Environmental Protection (MEP) lacks the clout to enforce relevant regulations. MEP Minister Zhou Shengxian has the same party and government ranking – and in several cases, is more junior to – provincial and municipal party secretaries and governors. The latter do not feel duty-bound to carry out Environmental Ministry edicts.

Yet the establishment of a high-powered unit may not be the solution. Early last year, the central government set up an inter-departmental National Food Safety Commission to ensure what the domestic media call “dining-table safety.” The NFSC is headed by First Vice-Premier Li Keqiang, who is also a member of the CCP Politburo Standing Committee. The profusion of food scandals the past year, however, shows the Commission is not doing its job properly.

The crux of the problem, then, lies deeper than administrative inefficiency. Firstly, the Party doesn’t learn from its mistakes. One need not mention the leadership’s notorious refusal to acknowledge that fiascos ranging from the Cultural Revolution (1966 to 1976) to the Tiananmen Square crackdown of 1989 were policy failures of the highest magnitude.

Much worse is the fact that victims of these man-made disasters have been subject to relentless harassment. They range from the Tiananmen Mothers – parents of the victims of the June 4 massacre – to Zhao Lianhe, the activist who has sought compensation for the victims of the melamine-tainted milk. Meanwhile, petitioners, a reference to citizens with grievances who want to seek help from central-level departments, have been locked away by police or even set upon by thugs.

More significantly, party authorities from the central to local levels are regarded as reluctant to tackle socio-economic ills and injustices because they are in league with the perpetrators.

Given that profits from land sales and taxation from real-estate transactions make up more than half of the income of regional administrations, collusion between government officials and property developers is widespread. This explains why the land-grab phenomenon will not go away any time soon.

The same factors lie behind environmental woes. There is well-documented evidence to show that polluters have greased the pawns of officials at both the central and local levels. Yet corruption can hardly be eradicated if it originates within the CCP, which is the sole power center in the country.

This is despite the fact that China has an extraordinarily large number of party and government departments dedicated to fighting corruption. Graft-busters include the CCP Central Commission on Disciplinary Inspection, which is headed by Standing Committee member He Guoqiang; the Ministry of Supervision; and Anti-Corruption Bureaus within the Procuratorates (or Prosecutor’s Offices).

In the name of preserving stability – and the CCP’s “perennial ruling-party status” – Beijing has mothballed political reforms that could be the only answer to China’s quandary.

Senior cadres including National People’s Congress Chairman Wu Bangguo recently reiterated that China would never adopt “Western institutions” such as multi-party politics, the tripartite division of power, the rule of law, independence of the judiciary, and freedom of the press.

Yet without proper checks and balances as well as media scrutiny, socio-political ailments will only fester – and tear asunder China’s already tenuous social fabric.

As the CCP celebrates an important watershed in its history, its top cadres may want to ask themselves whether their single-minded crusade to monopolize power at all costs may not be the surest guarantee that its days in power are numbered.