BO XILAI, MAYOR OF DALIAN, IS SAVVY, WELL EDUCATED and extremely successful in luring Japanese and Korean investment to his booming port city, 440 km east of Beijing. But after four years on the job, the mayor is still best known as a chip off the old Bo: his father, Bo Yibo, is one of the elders of the Communist Party. That's the kind of pedigree that gets people ahead in China.

Or it has in the past. As China slips further into the post-Deng Xiaoping era, an unusually harsh spotlight is being thrown on Bo and his fellow taizi (princelings). These are the sons and daughters of Communist Party officials--from the hallowed heroes of the 1949 revolution to obscure but influential bureaucrats--who have parlayed their parents' positions into perquisites, prestige and power. No one doubts that a shake-out of the princelings is imminent. The real question is whether the entire nepotistic system will be altered--and if so, what system will evolve in its place.

Depending on how you define an upper-echelon official, the princelings number anywhere from 5,000 to 100,000. They include a wide range of worthies and profligates, lawmakers in the National People's Congress and lawbreakers in enterprises everywhere. Princelings span several generations, from this year's graduates of Peking University to many of the country's aging eminences. Premier Li Peng, 66, is the son of a revolutionary martyr, Li Shouxun, and was adopted by Mao's Premier, Zhou Enlai. Ye Xuanping, 70, vice chairman of the Chinese People's Political Consultative Conference, is the son of Marshal Ye Jianying. Jiang Zemin takes his name from adopted father Jiang Shangqing, another revolutionary martyr.

But the manner in which each princeling generation has beaten the system continually mutates, mirroring the momentous changes within China. Jiang's generation wanted positions of power from which to rule the country. Their offspring needed protection from the Cultural Revolution's worst excesses: many received commissions in the People's Liberation Army, preventing them from being sent to the countryside for re-education. When universities were reopened after the upheaval, some princelings got seats supposedly reserved for workers and peasants. And in the Deng era, the children of officials were often the ones who went abroad to study and came home to start businesses or run state companies. Central Bank vice governor Chen Yuan, 50, is son of Chen Yun, who died in April at age 89 and was one of the so-called immortals of the revolution. Deng's children and their spouses are involved in a range of ventures: son-in-law He Ping, for example, manages a commercial unit of the People's Liberation Army that sells arms and makes heavy industrial equipment. Wang Jun, chairman of China International Trust and Investment Corp., is the son of former Vice President Wang Zhen. The list goes on.

But will it? There is an argument that by virtue of their premier education and intimate knowledge of the system, the princelings are truly China's best and brightest. "These princelings get a bum rap," says a foreign banker in Beijing, one of many who compete to lend to businesses run by these powerful sons and daughters. "People assume that they rose to senior posts because of their connections and not competence. It's like being a talented African American who gets maligned as a beneficiary of affirmative action." That's not an argument you hear often on the streets. Nepotism was a major complaint of the Tiananmen Square protesters in 1989. One of the most perused of the inflammatory "big-character posters" at the time was a chart with the names of senior officials, their children and in-laws, and their positions in the government, the party, the army and in business circles.

During the last major power shift in China, after Mao's death in 1976, there was a shake-up at the very top of the princeling pyramid. Mao's family plummeted from privilege: wife Jiang Qing was arrested, convicted of treason and sentenced to life in prison, where she committed suicide in 1991. Nephew Mao Yuanxin, sentenced to a long prison term, now labors in an obscure Shanghai factory. Daughter Li Na was retired from her newspaper-editing job, and is still seen being chauffeured around Beijing, though her car is an ancient Soviet-made Lada.

Of the post-Deng shake-out, only one thing is certain: it has already begun. One of Deng's intimates, Shougang chairman Zhou Guanwu, resigned earlier this year after his high-flying son, Zhou Beifang, was arrested on charges of corruption, throwing a shiver through the princeling network. The big question is whether the alite are in for a cleanup or a witch hunt. In May the government said new "sunshine regulations" will require senior government leaders and party officials to declare their incomes for the first time. But the declarations would not be released to the public. This suggests strongly that only selected princelings--the egregiously corrupt or those in political disfavor--will have to worry about unwanted sunshine coming into their lucrative principalities.

--Reported by Jaime A. FlorCruz/Beijing