China security chief down but not out after blind dissident's escape BEIJING (Reuters) - Strike two against China's once invulnerable domestic security chief, Zhou Yongkang. An audacious escape by blind dissident Chen Guangcheng is the second uproar this year to hit Zhou, who has expanded China's policing apparatus into a vast, costly and - now for all the world to see - a flawed tool of Communist Party control. But even one of the biggest domestic security embarrassments in more than a decade is unlikely to knock him out before a party congress late this year that will appoint successors to him and other retiring leaders, said several experts. The question will be whether his successor gets to rethink his legacy and rein in the domestic security establishment whose $110 billion budget exceeds the People's Liberation Army's. Chen outfoxed a cordon of guards and security cameras to flee home imprisonment in Shandong province in east China, escaping to what supporters have said is U.S. protection in Beijing. His feat was a rebuff to Zhou's security forces and it threatens to turn into a standoff with Washington. Zhou was already bruised by a scandal in Chongqing in southwest China, after that city's former police chief, Wang Lijun, fled into a U.S. diplomatic compound in February for more than 24 hours. Wang revealed allegations of murder and corruption that have felled Bo Xilai, the ambitious Chongqing party chief who had courted Zhou as a patron. The domestic security establishment was humiliated in 1999, when members of the Falun Gong spiritual movement held a surprise protest around the party leaders' compound in Beijing. Although smaller in scale, the two latest incidents are also embarrassing setbacks for the guardians of stability. "All of the recent astonishing episodes - police brutality in Chongqing and Shandong, Wang Lijun's rise and his attempted defection to the U.S. consulate, and Chen Guangcheng's adventurous escape - have revealed severe flaws of the Chinese security system," said Cheng Li, an expert on Chinese politics at the Brookings Institution in Washington D.C. "Zhou Yongkang, as the leader in charge of this functional area, deserves some blame," Li said in emailed comments. But Li added that China's top leadership was extremely cautious and hesitant to fire more senior leaders, especially someone whose status was even higher than Bo. Since 2007, Zhou has been the member of the Politburo Standing Committee - the party's core council of power - who steers the police, law and security agencies. The recent crises have intensified long-standing criticisms in China that Zhou's fiefdom has grown too powerful, unaccountable and yet incapable of meeting the party's expectations of defending social stability. "You can't separate the case of Chen Guangcheng from Zhou Yongkang and his making stability preservation a national policy that has overridden all boundaries and rules," said Pu Zhiqiang, a lawyer in Beijing who takes on contentious cases about human rights and freedom of speech. "This all comes down to Zhou Yongkang's policies for social control and domestic security, and this shows that in the end they can't work," added Pu, who said he hoped China's next leaders would rein in what they call the "stability preservation" apparatus after taking power from later this year. Despite Internet-fed rumors that Zhou could fall because of ties to the disgraced Bo, he remains a hulking presence in politics. His recent regular appearances and speeches appear intended to show he remains out of political danger. Zhou, 69, must retire at the forthcoming party congress, and ousting him before then could fan panic discord at a vulnerable time, said Xie Yue, a professor of political science at Tongji University in Shanghai. Xie studies domestic security. "It is rumored that Zhou Yongkang has been under pressure internally, and the Chen Guangcheng incident offers more reasons to criticize him," Xie said in a telephone interview. "But the priority is a smooth transition for the 18th Party Congress, and if Zhou Yongkang was ousted before then, that could be too much of a shock for the handover of power by the top levels of the Communist Party," said Xie. For 19 months, Chen Guangcheng endured extra-judicial home jail in his village, a living symbol of the Communist Party's willingness to mobilize enormous resources to stifle the dissent and protest that it fears could challenge its power. Chen, a self-schooled legal advocate who campaigned against forced abortions, had been held in his village home in Shandong province since September 2010 when he was released from jail for charges that he called spurious. Chen's supporters have described a relentless effort to keep him locked up, while maintaining the official fiction that he was free. Squadrons of guards patrolled his Dongshigu village to keep him in and unwelcome visitors, including reporters, out. A web of security cameras watched his home. Officials told Chen they estimated well over 60 million yuan ($9.5 million) had been spent to keep him penned up, he said in a video released after his escape, adding that sum did "not include cash for paying off senior officials in Beijing." "It's clear just how serious the corruption was, and how badly money and power have been abused," Chen said in the statement addressed to Chinese Premier Wen Jiabao and carried on YouTube. Chinese officials and police have refused to answer repeated questions from reporters about Chen and his comments. His confinement was just part of a much larger "stability preservation" campaign to deter threats to party power. Chinese spending on police, militia and other domestic security arms will increase by 11.5 percent in 2012 to 701.8 billion yuan, according to the budget approved in March. By comparison, China's defense budget for 2012 is 670.3 billion yuan. The security spending surge has inflated the power of the police and militia forces under Zhou, an avid supporter of President Hu Jintao's campaign to strengthen "social management" and pre-empt unrest. "Every province, every place has its own Chen Guangchengs, people who are kept under control and silenced without any legal basis or appeal," said lawyer Pu. Chen Guangcheng was the most prominent example of this unfettered abuse of power. Echoing the views of many liberal supporters of rule of law, Pu said he hoped the setbacks to China's domestic security agencies would give the country's next generation of leaders impetus to tether their power more tightly. Vice President Xi Jinping is expected to replace Hu as party chief and president. "The next generation of leaders can make a break, and use these incidents to make their case," he said. The stability preservation sector is a powerful interest group, but if leaders are determined to change it, it won't be able to resist. There is uncertainty about who will succeed Zhou as domestic security chief. He was a provincial leader with a background in oil, and his successor could be another provincial boss. Still, the standoff over Chen's fate is unlikely to force leaders to fundamentally revise their entrenched security policies, said several experts. I'm not optimistic that there will be much change. The whole model of stability preservation is part and parcel of the mode of rule, not the work of just one man," said Xie. Zhou Yongkang will retire, but the stability preservation model will not. Editing by Brian Rhoads and Mark Bendeich