NPC SET TO VOTE FOR NEW CHINESE GOVERNMENT

C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 002438

TREASURY FOR OASIA/INA - KEIDEL/DUPUY
STATE PASS FEDERAL RESERVE BOARD FOR JOHNSON, NEW YORK
FRB FOR DAGES/CLARK/CHU, SAN FRANCISCO FRB FOR CURRAN

STATE PASS USTR FOR FREEMAN/NEUREITER

E.O. 12958: DECL: 3/05/13
TAGS: PGOV PINR ECON EFIN ETRD CH
SUBJECT: NPC SET TO VOTE FOR NEW CHINESE GOVERNMENT

REFS: A) BEIJING 1176; B) SECTO 0018; C) BEIJING 2230

(U) CLASSIFIED BY POLITICAL MINISTER COUNSELOR JON
ALOISI. REASON 1.5 (B) (D).

SUMMARY
--------------


1. (C) THE UPCOMING NATIONAL PEOPLE'S CONGRESS (NPC)
PLENARY SESSION WILL SELECT CHINA'S NEW STATE AND
LEGISLATIVE LEADERS, ALONG WITH THE LEADERS OF THE NEW
STATE COUNCIL, STATE CENTRAL MILITARY COMMISSION (CMC)
SUPREME PEOPLE'S COURT (SPC) AND SUPREME PEOPLE'S
PROCURATORATE (SPP). WHILE THE NPC'S ROLE IN THIS
PROCESS IS LITTLE MORE THAN THAT OF A RUBBERSTAMP, THE
VERY FACT THAT THE VOTING RESULTS WILL BE MADE PUBLIC
FORCES THOSE WHO ARE REALLY CALLING THE SHOTS TO
NOMINATE TECHNICALLY "QUALIFIED" CANDIDATES WHOSE
SELECTION CAN BE DEFENDED. RELATIVELY LOW "VOTING"
OUTCOMES WILL ALSO INDICATE DELEGATES' CONFIDENCE, OR
LACK THEREOF, IN THE NEW LEADERS. END SUMMARY.


2. (U) THE MOST IMPORTANT JOB THAT DELEGATES WILL
PERFORM AT THE NPC SESSION, WHICH WILL BEGIN MARCH 5, IS
THE SELECTION OF CHINA'S NEW STATE LEADERS.
SPECIFICALLY, DELEGATES MUST APPROVE IN A CONFIRMATION-
LIKE "ELECTION" CHINA'S STATE PRESIDENT AND VICE
PRESIDENT, CHINA'S NEW PREMIER, VICE-PREMIERS, STATE
COUNCILLORS, HEADS OF STATE COUNCIL MINISTRIES AND
COMMISSIONS (CURRENTLY 29 BODIES, THOUGH THIS WILL
CHANGE AS A RESULT OF A RESTRUCTURING PLAN WHICH WILL
ALSO BE INTRODUCED AT THIS NPC SESSION),THE STATE
COUNCIL SECRETARY-GENERAL, THE CHAIRMAN AND MEMBERS OF
THE CMC, THE MEMBERS OF THE NPC'S STANDING COMMITTEE,
THE NPC STANDING COMMITTEE CHAIRMAN AND CHAIRMEN OF THE
LEGISLATURE'S 14 FUNCTIONAL COMMITTEES, THE SPC
PRESIDENT AND THE SPP PROCURATOR-GENERAL. THIS PROCESS
WILL END THE TWO-PART GENERATIONAL TURNOVER OF LEADERS
WHICH BEGAN WITH THE COMMUNIST PARTY'S (CCP'S) 16TH
NATIONAL CONGRESS LAST NOVEMBER.


3. (C) NOTWITHSTANDING THE NPC'S CONSTITUTIONAL MANDATE
TO SELECT LEADERS AND MEMBERS OF CHINA'S HIGHEST STATE
ORGANS, DELEGATES IN REALITY WILL ONLY BE ASKED TO
RUBBERSTAMP CANDIDATE NAMELISTS FINALIZED DURING THE
FEBRUARY 24-26 SECOND PLENUM OF THE CCP'S CENTRAL
COMMITTEE. MANY OF THOSE ELECTED INTO THE PARTY'S TOP
BODIES (I.E., THE STANDING COMMITTEE AND POLITBURO)
IMMEDIATELY AFTER LAST NOVEMBER'S PARTY CONGRESS WILL
ASSUME GOVERNMENT POSITIONS COMMENSURATE WITH THEIR
PARTY RANK (I.E., PREMIER, VICE PREMIER OR STATE
COUNCILLOR). MOST OF THE REMAINING CANDIDATES ON THE
LISTS PRESENTED TO NPC DELEGATES WERE PREVIOUSLY PLACED
IN POSITIONS WHICH WILL ALLOW THEM TO EMERGE DURING THE
NPC SESSION AS THE "MOST QUALIFIED" CANDIDATES.

EMPHASIS ON QUALIFICATIONS, NOT PARTY CONNECTIONS
-------------- --------------


4. (C) OUR CONTACTS CONCUR, HOWEVER, THAT THE DYNAMICS
OF THE GOVERNMENT TURNOVER DIFFER FROM THOSE OF THE
PARTY LEADERSHIP TRANSITION. MOST IMPORTANT IN THIS
REGARD IS THAT, UNLIKE THOSE PARTICIPATING IN THE PARTY
CONGRESS, NPC VOTE TOTALS ARE MADE PUBLIC. WHILE CHOSEN
FOR THEIR POLITICAL RELIABILITY, EXPERIENCE HAS SHOWN
THAT SOME NPC DELEGATES ARE WILLING TO VOTE "NO" OR TO
ABSTAIN IN CASES WHERE THE CANDIDATES ARE UNPOPULAR.
THIS PUTS PRESSURE ON PARTY LEADERS TO NOMINATE
TECHNICALLY "QUALIFIED" CANDIDATES WHOSE SELECTION CAN
BE DEFENDED TO NPC DELEGATES. OTHERWISE, THE PARTY
RISKS SEEING ITS CHOSEN CANDIDATES RECEIVE
EMBARRASSINGLY LOW (I.E., BELOW 90 PERCENT) SUPPORT
RATES, THOUGH THE NPC HAS NEVER REJECTED OUTRIGHT ANY OF
THE CENTRAL COMMITTEE'S "OFFICIAL" CANDIDATES.

PRESIDENT AND VICE PRESIDENT
--------------


5. (C) GIVEN JIANG ZEMIN'S PHASED RETIREMENT THAT BEGAN
WITH HIS RELINQUISHING THE CCP'S GENERAL SECRETARY
POSITION LAST NOVEMBER, THE BIG PRIZE AT THIS NPC
SESSION WILL BE HIS STATE PRESIDENT POSITION. THE 76
YEAR-OLD PRESIDENT HAS SERVED HIS CONSTITUTIONAL TWO-
TERM LIMIT. JIANG CONFIRMED TO SECRETARY POWELL ON
FEBRUARY 24 THAT HE WILL, AS EXPECTED, TURN OVER HIS
STATE POSITION TO 60 YEAR-OLD CCP GENERAL SECRETARY HU
JINTAO (REF B). EMBASSY SOURCES CONCUR THAT JIANG'S
PROTEGE, FIFTH-RANKED STANDING COMMITTEE MEMBER ZENG
QINGHONG, WILL TAKE OVER HU'S VICE PRESIDENCY. WORTH
WATCHING WILL BE THE NUMBER OF VOTES RECEIVED BY BOTH
MEN; A LOW APPROVAL LEVEL FOR ZENG, PARTICULARLY IF HU'S
POSITIVE VOTE IS HIGH, COULD PROVE EMBARRASSING TO
JIANG.

STATE COUNCIL LEADERSHIP POSITIONS
--------------


6. (C) THERE WILL BE A CONSIDERABLE TURNOVER AT THE TOP
LEVELS OF CHINA'S (GOVERNMENTAL) STATE COUNCIL THIS
YEAR. PREMIER ZHU RONGJI, TWO OF FOUR VICE PREMIERS (LI
LANQING AND QIAN QICHEN),THREE OF FIVE STATE
COUNCILLORS (CHI HAOTIAN, ISMAIL AMAT AND WANG ZHONGYU),
AND THE STATE COUNCIL SECRETARY-GENERAL (ALSO WANG
ZHONGYU) ARE ALL WELL OVER THE MANDATORY RETIREMENT AGE
OF 65. THE REMAINING TWO VICE PREMIERS (WU BANGGUO AND
WEN JIABAO) AND STATE COUNCILLOR LUO GAN ARE ALL MEMBERS
OF THE CCP'S NEW STANDING COMMITTEE, INDICATING THAT
THEIR RETIREMENT IS NOT IMMINENT. WU YI, THE REMAINING
STATE COUNCILLOR AND THE ONLY WOMAN AT THE TOP LEVELS OF
CHINA'S POLITICAL LEADERSHIP, WAS ELECTED TO FULL
POLITBURO MEMBERSHIP (ALBEIT NOT TO THE STANDING
COMMITTEE) AT THE 16TH PARTY CONGRESS.


7. (C) EMBASSY CONTACTS ARE ALSO IN AGREEMENT THAT WEN
JIABAO, WHO HAS BEEN PERFORMING MANY OF THE PREMIER'S
RESPONSIBILITIES SINCE LAST NOVEMBER, WILL REPLACE ZHU.
THEY ALSO AGREE THAT SIXTH-RANKING STANDING COMMITTEE
MEMBER HUANG JU WILL REPLACE LI LANQING AS EXECUTIVE
VICE PREMIER, WHILE POLITBURO MEMBERS WU YI, ZENG PEIYAN
AND HUI LIANGYU WILL ALL BE "ELECTED" VICE PREMIERS.


8. (C) WITH THE EXCEPTION OF POLITBURO MEMBER AND
PEOPLE'S LIBERATION ARMY GENERAL CAO GANGCHUAN, WHO
SEEMS CERTAIN TO REPLACE CHI HAOTIAN, THERE IS LESS
CERTAINTY OVER THE NEW STATE COUNCILLORS. VARIOUS
SOURCES HAVE SUGGESTED THAT POLITBURO MEMBER (AND
MINISTER OF PUBLIC SECURITY) ZHOU YONGKANG (60),AND
CENTRAL COMMITTEE MEMBERS TANG JIAXUAN (65),DOJE CERING
(63),DAI BINGGUO (62) AND HUA JIANMIN (63) ARE POSSIBLE
CANDIDATES. HUA, WHO HAS BEEN SERVING AS THE DIRECTOR
OF THE OFFICE OF THE CENTRAL COMMITTEE'S LEADING GROUP
FOR FINANCE AND ECONOMICS, MIGHT ALSO BE A CANDIDATE TO
REPLACE WANG ZHONGYU AS STATE COUNCIL SECRETARY-GENERAL.
OF THESE INDIVIDUALS, SOURCES HAVE SUGGESTED THAT HUANG
JU, WHO SUFFERS FROM A REPUTATION FOR CORRUPTION AND
IMMORAL BEHAVIOR, AND ZHOU YONGKANG, WHOSE CONTROVERSIAL
ASSIGNMENT LAST DECEMBER AS MINISTER OF PUBLIC SECURITY
IS SEEN BY MANY AS REVERSING A 20-YEAR EFFORT TO
DECREASE HIS MINISTRY'S POWER, ARE MOST LIKELY TO
RECEIVE LOW NPC VOTES.

COMMISSIONS AND MINISTRIES
--------------


9. (U) NINETEEN OF CHINA'S 29 MINISTERS AND COMMISSION
DIRECTORS ARE OVER 60. SIX ARE OVER OR NEARING
RETIREMENT AGE. THESE ARE: MINISTER OF NATIONAL
DEFENSE CHI HAOTIAN (73),MINISTER OF FOREIGN AFFAIRS
TANG JIAXUAN (65),MINISTER OF RAILWAYS FU ZHIHUAN (65),
MINISTER OF INFORMATION INDUSTRY WU JICHUAN (65),STATE
DEVELOPMENT PLANNING COMMISSION DIRECTOR ZENG PEIYAN
(64) AND STATE COMMISSION OF SCIENCE, TECHNOLOGY AND
INDUSTRY FOR NATIONAL DEFENSE DIRECTOR LIU JIBIN (64).
IN ADDITION, MINISTER OF CIVIL AFFAIRS DOJE CERING (63)
HAS SERVED MORE THAN ONE FULL TERM. (WHILE SERVING MORE
THAN ONE TERM DOES NOT NECESSARILY DISQUALIFY A MINISTER
FOR REMAINING IN OFFICE, IT DOES SUGGEST THAT THE
INDIVIDUAL IS LIABLE TO BE REASSIGNED.)


10. (C) WORKING-LEVEL CONTACTS AT THE MINISTRY OF
FINANCE (MOF) HAVE INDICATED THAT CURRENT FINANCE
MINISTER XIANG HUAICHENG (64) WILL BE REPLACED BY STATE
ADMINISTRATION OF TAXATION (SAT)_DIRECTOR JIN RENQING.
XIANG WILL TAKE OVER MANAGEMENT OF THE CENTRAL
GOVERNMENT'S SOCIAL SECURITY FUND FROM FORMER FINANCE
MINISTER LIU ZHONGLI. ADDITIONAL MOF SCUTTLEBUTT NAMES
JIN'S SUCCESSOR AT THE SAT AS XIE XUREN, A VICE MINISTER
OF THE STATE ECONOMIC AND TRADE COMMISSION WHO
PREVIOUSLY SERVED AS A VICE MINISTER OF FINANCE AND AS A
VICE SECRETARY OF THE CCP'S FINANCIAL WORK COMMISSION.
IN ADDITION, PEOPLE'S BANK OF CHINA GOVERNOR ZHOU
XIAOCHUAN, WHO ONLY ASSUMED HIS POST AT THE END OF
DECEMBER, WILL BE RECONFIRMED AS HEAD OF CHINA'S CENTRAL
BANK.


11. (C) GIVEN EFFORTS AT THE PARTY CONGRESS TO PUT
SIGNIFICANTLY YOUNGER CADRES IN LEADERSHIP POSITIONS, A
CENTRAL PARTY SCHOOL DIRECTOR SUGGESTED THAT THE
TURNOVER COULD BE SUBSTANTIAL, EVEN OF LEADERS WHO ARE
STILL SEVERAL YEARS AWAY FROM MANDATORY RETIREMENT AND
EVEN WITHIN THOSE MINISTRIES UNAFFECTED BY THE
RESTRUCTURING PLAN. OTHER SOURCES DISAGREE, SUGGESTING
THAT MANY OF THESE 60-SOMETHING INDIVIDUALS IN FACT HAVE
BEEN IN PLACE LESS THAN A FULL TERM AND ARE THUS LIKELY
TO REMAIN FOR AT LEAST A FEW MORE YEARS. SUPPORTING THE
LATTER ANALYSIS IS THE FACT THAT FEW OF THE EXECUTIVE
VICE MINISTERS WHO WOULD MOST LIKELY REPLACE OUTGOING
MINISTERS ARE FULL OR ALTERNATE CENTRAL COMMITTEE
MEMBERS.


12. (C) EMBASSY CONTACTS HAVE PICKED CAO GANGCHUAN TO
REPLACE CHI HAOTIAN, EXECUTIVE VICE FOREIGN MINISTER LI
ZHAOXING TO REPLACE TANG AND DEPUTY STATE COUNCIL
SECRETARY-GENERAL MA KAI TO TAKE OVER FROM ZENG PEIYAN
AT A RESTRUCTURED STATE DEVELOPMENT AND PLANNING
COMMISSION. SOURCES AT THE MINISTRY OF CIVIL AFFAIRS
CONTINUE TO SUGGEST THAT EXECUTIVE VICE MINISTER LI
XUEJU, ALTHOUGH NOT A CENTRAL COMMITTEE MEMBER OR
ALTERNATE, MAY REPLACE DOJE CERING.

CENTRAL MILITARY COMMISSION
--------------


13. (C) SINCE THE 1970'S, THE MEMBERSHIPS OF THE STATE
AND THE PARTY CENTRAL MILITARY COMMISSIONS HAVE BEEN
IDENTICAL; NO CHANGES IN THIS REGARD ARE LIKELY AT THE
10TH NPC. JIANG ZEMIN TOLD SECRETARY POWELL ON FEBRUARY
24 THAT HE WILL RETAIN HIS CMC CHAIRMANSHIP, DESPITE
SOME SPECULATION TO THE CONTRARY. REMAINING STATE CMC
MEMBERS WILL BE THE SAME INDIVIDUALS WHO ARE SERVING ON
THE PARTY CMC.

NPC POSITIONS
--------------


14. (U) PROBABLY THE LARGEST TURNOVER OF PERSONNEL WILL
BE OF THOSE WHO WILL LEAD THE NPC. STANDING COMMITTEE
CHAIRMAN LI PENG, WHO IS 74, WILL DEFINITELY RETIRE,
ALONG WITH 17 STANDING COMMITTEE VICE CHAIRMEN (ALL BUT
THREE OF WHOM ARE WELL OVER 65) AND AT LEAST 13 OF 14
CHAIRMEN OF THE NPC'S FUNCTIONAL COMMITTEES. THE NEW
NPC DELEGATES MUST ALSO ELECT A NEW STANDING COMMITTEE
(CURRENTLY 136 MEMBERS).


15. (C) WHILE EMBASSY SOURCES AGREE THAT CCP STANDING
COMMITTEE MEMBER WU BANGGUO WILL REPLACE LI PENG,
SOURCES ARE LESS CERTAIN ABOUT WHO WILL REPLACE THE
OTHERS. SOUTHERN WEEKEND ON FEBRUARY 27 SUGGESTED THAT
LEADERS MAY SEEK TO ADD TWENTY "SPECIAL MEMBERS" WHO ARE
BEING TRANSFERRED TO THE NPC FROM GOVERNMENT POSITIONS
DURING THE "PEAK OF THEIR CAREERS" IN ORDER TO CREATE A
MORE PROFESSIONAL, TECHNICALLY PROFICIENT STANDING
COMMITTEE, BUT DID NOT DISCLOSE ANY NAMES. SOURCES HAVE
INDICATED THAT MANY DELEGATES ARE DISSATISFIED WITH THE
LESS-THAN-DYNAMIC WU AS THE INDIVIDUAL WHO WILL GUIDE
THE NPC OVER THE COMING YEARS, BUT NOBODY EXPECTS THE
VOTE FOR WU TO BE ANYWHERE NEAR AS LOW AS THAT FOR THE
LIKELY NEW CPPCC CHAIRMAN, JIA QINGLIN (REF C).

SUPREME PEOPLE'S COURT AND SUPREME PEOPLE'S
PROCURATORATE
--------------


16. (C) EMBASSY SOURCES CONCUR THAT XIAO YANG (64),THE
PRESIDENT OF THE SPC, AND HAN ZHUBIN (71),PROCURATOR
GENERAL OF THE SPP, ARE BOTH LIKELY TO RETIRE. SPC
OFFICIALS HAVE SUGGESTED THAT XIAO'S EXECUTIVE VICE
PRESIDENT, CAO JIANMING, IS MOST LIKELY TO REPLACE HIM,
THOUGH CAO IS NOT A CENTRAL COMMITTEE MEMBER. SOURCES
OUTSIDE THE SPC HAVE SUGGESTED THAT CENTRAL COMMITTEE
MEMBER AND FORMER MINISTER OF PUBLIC SECURITY JIA
CHUNWANG (64) COULD REPLACE HAN.


RANDT