"Better to control them itself." is short for "It is better (for it) to control them itself", where "itself" (and "it") means the Communist Party. The other possibility is "The Communist Party had better control them itself" (had better + VERB = should VERB), which has nearly the same meaning. But in this case you would shorten it to "Better control them itself" without the "to", and it is too colloquial to use in a formal writing like this.

Here its used as a reflexive pronoun. Here is some examples: Itself is a reflexive pronoun, being the reflexive form of it. It can be used especially in the following ways: as an object that refers to the same thing that is the subject of the sentence or that was mentioned earlier in the sentence: The machine turns itself off when it has finished printing. The civil war divided the country against itself. after a singular noun or pronoun for emphasis: The document itself is divided into three parts. That itself is the problem.