China’s state news agency Xinhua reported last week that the government had shut down 42 websites and arrested 1,065 people for “fabricating or disseminating online rumors.” Xinhua also revealed that Beijing police had deleted 208,000 “harmful” online messages during the past month. The report did not specify the contents of the rumors, but most Chinese and concerned outsiders know what the main targets of the nationwide crackdown were.

Tourists returning from trips to China report that everybody, including their tour guide, is talking about the Bo Xilai scandal. And, because of the dramatic elements of the incident, everyone conveys a different version of what happened and why, including theories of a power struggle in the highest offices in Beijing, hence the great alertness of the Chinese authorities.

The magnitude of the affair is being compared to that of Mao Ze-dong’s successor-designate Lin Piao’s escape in the 1960s and the Gang of Four intrigue in the 1970s. The main actors are Bo Xilai, the ambitious party secretary of Chongqing who is now under investigation for corruption and abuse of power; his wife Gu Kailai who was arrested in connection with the murder of a British businessman friend last November; and Wang Lijun, Bo’s deputy and police chief who unsuccessfully sought asylum in the U.S. consulate in Chengdu in February, arousing international attention.

The death of Neil Heywood, initially attributed to alcohol poisoning, could have been buried as the ill fate of an expatriate if it was not linked to Wang’s visit to the U.S. consulate. As the Western press and Chinese media in Hong Kong kept digging into the affair, Beijing authorities announced the arrest of Gu and her associate on murder charges.

The announcement further spurred media interests and new disclosures are reported almost every day, ranging from the scale of Bo’s illicit wealth ― allegedly exceeding $1 billion ― his connection with Zhou Yongkang, a Politbureau central committee member in Beijing, to the possible impact on the Communist Party convention late this year when President Hu Jintao and Premier Wen Jiabao will be replaced.

The scandal represents absurdities of today’s China, where power is connected with money. While the controlled media fail to meet the public demand for information, the alternative means of communication indiscriminately spread facts and speculations, both founded and unfounded.

The one-party political structure has been credited for stability as it presided over economic development for a generation but the emergence of the so-called princes group is threatening to split the center of power. How the collective leadership will handle the Bo Xilai event will show whether the system in China is durable.