Identifier
Created
Classification
Origin
06SHANGHAI7140
2006-12-21 09:55:00
CONFIDENTIAL
Consulate Shanghai
Cable title:  

WENLING PUSHING THE BOUNDARY OF POLITICAL REFORM

Tags:  PGOV PINR EINV ECON CH 
pdf how-to read a cable
VZCZCXRO0967
RR RUEHCN RUEHVC
DE RUEHGH #7140/01 3550955
ZNY CCCCC ZZH
R 210955Z DEC 06
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5386
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 5717
C O N F I D E N T I A L SECTION 01 OF 05 SHANGHAI 007140 

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DEPT FOR EAP/CM, INR/B, INR/EAP, AND DRL
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE
TREAS FOR OASIA - DOHNER/CUSHMAN
USDOC FOR ITA/MAC - A/DAS MELCHER, MCQUEEN
NSC FOR WILDER AND TONG

E.O. 12958: DECL: X1 MANUAL REVIEW
TAGS: PGOV PINR EINV ECON CH
SUBJECT: WENLING PUSHING THE BOUNDARY OF POLITICAL REFORM

REF: A) SHANGHAI 7139; B) SHANGHAI 6460; C) BEIJING 24346, SHANGHAI 7137

SHANGHAI 00007140 001.2 OF 005


CLASSIFIED BY: Veomayoury Baccam, Acting Policital/Economic
Section Chief, U.S. Consulate, Shanghai, Department of State.

REASON: 1.4 (b),(c),(d)



C O N F I D E N T I A L SECTION 01 OF 05 SHANGHAI 007140

SIPDIS

SIPDIS

DEPT FOR EAP/CM, INR/B, INR/EAP, AND DRL
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE
TREAS FOR OASIA - DOHNER/CUSHMAN
USDOC FOR ITA/MAC - A/DAS MELCHER, MCQUEEN
NSC FOR WILDER AND TONG

E.O. 12958: DECL: X1 MANUAL REVIEW
TAGS: PGOV PINR EINV ECON CH
SUBJECT: WENLING PUSHING THE BOUNDARY OF POLITICAL REFORM

REF: A) SHANGHAI 7139; B) SHANGHAI 6460; C) BEIJING 24346, SHANGHAI 7137

SHANGHAI 00007140 001.2 OF 005


CLASSIFIED BY: Veomayoury Baccam, Acting Policital/Economic
Section Chief, U.S. Consulate, Shanghai, Department of State.

REASON: 1.4 (b),(c),(d)




1. (C) Summary: Riding on the coattails of the successes with
"democratic consultative meetings (minkenhui) and participatory
democracy reforms in other townships, Wenling municipality in
Zhejiang Province has moved forward and implemented further
reforms in the township of Xinhe, which put the entire budget
under scrutiny and, in a rare move, empowered the local
legislature with real budgetary authority. While this move
toward "legislative democracy" had earned praise from some top
leaders, efforts at strengthening legislative democracy through
electoral reforms in Luoheng Township have stalled. However,
some of the organizers of the Luoheng reforms are working with
officials in Yunnan Province's Honghe to implement similar
reforms. Support for these reforms has been mixed, with
National People's Congress Chairman Wu Bangguo reportedly
cracking down on budget reforms that strengthened legislative
authority over the government. Moreover, with a recent
reshuffling of party leadership, some localities have grown at
least temporarily skittish about pushing the envelope on
political reform. Nevertheless, reformers remained committed to
moving democratic change forward in Wenling and elsewhere. This
is the second of two cables about political experimentation in
Wenling. The first addressed Wenling's experiments with
consultative democracy. End summary.


2. (C) Poloff traveled on October 6 to Wenling, an
administrative region under Zhejiang Province's Taizhou City to
meet with Chen Yiming, Head of the Wenling Municipal Propaganda

Department's Theory Office, Deputy Director of the Wenling
Municipal People's Democratic Consultation Work Office, and
author of Wenling's political experimentation. Poloff also met
on June 21 and 22, October 25, and December 5 and 20 with
Shanghai Municipal People's Congress researcher Zhou Meiyan;
Beijing-based democracy advocate and World China Institute
President Li Fan accompanied Zhou on June 22. Both Zhou and Li
have been advising Chen on his reform efforts and have been
promoting Chen's experiments within Shanghai and national-level
political circles. Li and his China and the World Institute
have received money through the Mission's small grant program to
help fund the Wenling experiments. Zhou also forwarded Poloff
the summary of a May 13-14 2006 "Workshop on the Legislature,
Budget Supervision, and Public Finance," hosted jointly by the
China University of Politics and Law, Peking University, and
Yale Law School that primarily discussed the Wenling experiments.

-------------- --------------
Xinhe: The Next Stage in Democratic Budget Reform
-------------- --------------


3. (C) Chen said that with the successful implementation of the
Zeguo budget reform experiment in 2005 (Ref A),he wanted to
push the envelope further and had begun designing a modified
version of budget review for Wenling's Xinhe Township with the
cooperation of Xinhe Party Secretary Jin Liangmin. Unlike
Zeguo, where the minkenhui examined a small part of the budget,
Chen put the entire budget under scrutiny in Xinhe. The plan
also sought to strengthen the role of the local People's
Congress, vesting it with real power in relation to the
government. (Note: According to Zhou and other Chinese
academics with whom Poloff has met, the legislatures, or
People's Congresses, are not considered part of the government
in the Chinese political system. End note.)


4. (C) On March 6, 2006, Xinhe Township held a minkenhui with
190 self-selected volunteer representatives. Participants were
divided into three groups focused on industry, agriculture, and
social development. The groups examined the township's detailed
draft budget. Chen said any resident was welcome to attend and,
at present, there were no restrictions on the number of
volunteer representatives who could be involved. All government
leaders and bureau heads, however, were required to attend and
answer any questions the participants had.


5. (C) All suggestions and questions about the budget were
recorded and then discussed at a Joint Conference (lianxi hui)
attended by the government officials, relevant People's Congress
committees, and the party's Economic Small Group. The Joint

SHANGHAI 00007140 002.2 OF 005


Conference decided which suggestions were reasonable and could
be adopted, which were unreasonable, and which dealt with
restricted issues and were off limits. Of the 50 suggestions
put forward by the minkenhui, the Joint Conference adopted 20
recommendations into its draft, impacting 6 million RMB of the
town's 98 million RMB budget.


6. (C) On March 7, the Joint Conference presented its draft
budget based on the minkenhui suggestions to the entire body of
the People's Congress--98 members--plus any interested observers
from among the public (Note: There were 110 observers who
attended in 2006. End note.). After the initial meeting, the
People's Congress divided into five groups, based on the
representatives' geographical districts, each with a group
leader who recorded the group's ideas about the draft budget.
The People's Congress then reconvened to listen to the group
leaders' presentations. Observers were not allowed to speak at
the meetings, but were able to lobby the representatives on the
margins. If the representatives liked their suggestions, then
they could bring them before the body or the committee. The
People's Congress then sent a draft revised budget back to the
government who examined it in a second Joint Conference.


7. (C) After discussing the People's Congress recommendations,
the Joint Conference redrafted the budget and sent it back to
the People's Congress on March 8 where the entire body listened
to the proposed budget and offered suggestions before breaking
again into the five district groups. The People's Congress then
reconvened to approve the draft. At this point, if they were
still unable to agree on the budget, People's Congress
representatives could introduce amendments for consideration.
Chen said that if five representatives put forward a
recommendation, it was voted on by the People's Congress. If
more than half of the members voted for it, the amendment was
adopted. After the People's Congress approved the budget and
any amendments, it was then binding on the government. In 2006,
representatives successfully introduced eight amendments, of
which two were ultimately adopted.


8. (C) At the May workshop, Xinhe People's Congress Deputy
Director Lou Jianrong added that the People's Congress also
established a permanent "financial inspection team" that had the
right to inquire about, inspect, and hear the government
financial report and to participate in the government budgeting
for the next quarter. At the same meeting, Xinhe Deputy Mayor
Jin Liangmin noted that the reforms had limited the power of
government and party leaders to determine fund allocation, while
strengthening the local People's Congress. Jin said that this,
in turn, had raised the credibility of the government in the
eyes of the people.


9. (C) Chen stressed that this type of budget oversight by the
legislature was highly unusual in China in that a People's
Congress was able to exercise its constitutional veto authority
over the government. Although, Chen said, the People's Congress
was not a truly representative elected body, it was a step in
the right direction of introducing independent oversight of
governmental decision-making. Moreover, the minkenhui and
observer/lobbyist elements provided a way for the people's
voices to be heard throughout the process.

--------------
Top Leaders Mixed on Support
--------------


10. (C) Chen said that it was easier for a small municipality
like Wenling to implement political reform than a large city
like Shanghai because it attracted less attention. This meant
that reforms could be fully established and produce positive
results that were difficult to argue with before someone up the
chain had the chance to veto it. He noted that the type of
budget reforms he was implementing in Wenling that empowered the
People's Congresses were in line with many National People's
Congress (NPC) representatives' desires to increase their
overall authority and oversight. In fact, Zhou had passed Chen
a draft budget reform law for Shanghai that looked strikingly
similar to the Xinhe model. Chen stressed that he was not
engaging in anything illegal, but that he was, in fact, trying
to turn the People's Congresses into what they were described as
on paper.


11. (C) Chen said that the Central Party School was supportive
of Wenling's initiatives and that (CPS) Vice President Li Junru
was focused on the experiments. During a March or April meeting

SHANGHAI 00007140 003.2 OF 005


at People's University in Beijing, Li said that Wenling was
China's most successful, most worthy of study and
implementation, and best model of consultative democracy in
China. Chen argued that Li wanted to move beyond participatory
democracy and harbored a secret admiration for U.S.-style
democracy (Ref B). Given his position as a high-level party
leader, however, Li was unable to voice his opinions. Li could,
however, give tacit support. Chen noted, for instance, that he
was able to publish an article in the CPS "Xuexi Shibao" on
Xinhe's reforms.


12. (C) Li Fan argued during a June 22 meeting with Poloff that
the experiments going on in Wenling showed that Zhejiang Party
Secretary and princeling Xi Jinping was not as conservative as

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some paint him, but was actually reform minded. Li--himself
also a princeling--speculated that Xi could be elevated to the
Politburo Standing Committee in 2007. Chen, however, was less
convinced of Xi's reform orientation. He said that he had
conducted his experiments without informing the provincial
authorities. By the time word reached Xi, the experiments had
already proven successful and Xi had little alternative but to
put his stamp of approval on them.


13. (C) Li Fan also noted that there were a number of budget
reforms happening around the country, although not everyone was
happy with them. For instance, Guangdong Party Secretary and
Politburo member Zhang Dejiang was upbraided by NPC Chairman Wu
Bangguo for allowing unspecified budget reform experimentation
to take place in Guangdong. Ironically, according to Li, Wu was
not interested in reforms that strengthened the legislative
branch at the expense of the government or party. Tangentially,
Li explained, this showed that Jiang Zemin's protigis were not a
cohesive group. According to Li, Zhang had been promoted by
Jiang but was not necessarily Jiang's man, nor did he always
mesh well with members of the "Shanghai Clique."


14. (C) Bio comment: According to a press report, Li's father
was an advisor to former Premier Zhou Enlai. Li, born in 1949,
attended school with Chairman Mao Zedong's daughter and during
famine years enjoyed out-of-season oranges that his father would
bring home from official meetings. Li also helped form a
princeling Red Guard unit during the Cultural Revolution
(1966-76) with fellow princeling and later Tiananmen democracy
activist Wei Jingsheng. According to Zhou, who works closely
with Li, Li has avoided arrest and excessive political
persecution while actively promoting political reform because
his father is still alive. She also confirmed Li's
participation with Wei in the Red Guard unit. Zhou worried that
Li might not be able to continue his work much longer since his
father was very ill and would likely die soon. End comment.

-------------- --------------
Luoheng: Towards Legislative Democracy With Fits and Starts
-------------- --------------


15. (C) Chen said that he was using the successes of the
Songmen and Zeguo experiments in "consultative democracy" to
spur and support "parliamentary democracy," or the use of an
elected legislature to provide a check on the government.
However, both Chen and Zhou said that all of these reforms fell
short of real "parliamentary democracy" since the legislative
representatives in China had not been chosen by a democratic
process. At the May conference, Li Fan argued that in order to
truly reinvigorate the role of the People's Congress, elections
needed to be "properly opened" so the delegates were truly
representative of their constituencies. In the meantime, it was
important to teach existing People's Congress representatives
about regulations and procedures--what is clearly stipulated in
the law but not practiced--so that they could be more effective
organizations and better assert their influence. Zhou said that
she, Li, and Zhongshan University Professor Ma Jun had been
involved in training the Xinhe legislature and others on their
constitutional authorities.


16. (C) Chen explained that he was currently working with Zhou
and Li on electoral reforms in the nearby town of Luoheng, which
is also under Wenling. Zhou said that Chen had worked out with
the Luoheng Party Secretary that the party would control the
selection of no more than half of the candidates on the ballot,
as compared to the current practice of the party filling
virtually the whole slate. As part of this, Chen was also
pushing the use of preliminary elections to narrow down the
numbers of preliminary candidates, as opposed to relying on
party-controlled "voter small groups" (Ref C). (Note: Chinese

SHANGHAI 00007140 004.2 OF 005


law dictates that there be 33 percent to 50 percent more
candidates than the number of slots being voted on. End note.)
Moreover, Chen had garnered the Luoheng Party Secretary's
consent to allow for campaigning in the form of open,
non-scripted debates this election. Eventually, Zhou said, Chen
planned to push for allowing both party and non-party candidates
access to television, newspaper, and other forms of propaganda
traditionally open only to party candidates.


17. (C) Chen planned to combine election reforms with
Xinhe-style budget reforms to achieve a true "parliamentary
democracy." Zhou said that it would be possible under such a
system to have truly competitive elections and a People's
Congress that was divorced from Party control overseeing the
Party-appointed government. Chen said that, holding true to his
modus operandi, he was not telling his superiors about his
efforts until he had successfully implemented them. He stressed
that such reforms were, in actuality, simply implementation of
existing law and that his supervisors would have no legal basis
to oppose him, even if they found out. While in theory, these
reforms were innocuous, in practice, such reforms would be
unprecedented, according to Zhou. Both Zhou and Li had traveled
to Luoheng to provide training to all interested candidates and
the current People's Congress.


18. (C) In December, Zhou told Poloff that the Luoheng
experiment had been put on hold. She explained that over the
past few months, all of the township party secretaries in
Wenling had been reshuffled in the run up to the People's
Congress elections. The Luoheng People's Congress was still on
board with the election reforms but the new party secretary
thought the issue was too controversial and did not want to rock
the boat so soon into his tenure. As an aside, Zhou noted that
party leaders were often transferred prior to People's Congress
elections as part of Beijing's effort to keep local party bosses
from becoming too strong. Zhou said that Chen would try again
in another five years when the elections rolled around. The new
Luoheng party secretary was still willing to work on budget
reform, however, which was seen as safer since it had already
been approved by the Provincial government.


19. (C) Zhou assessed that despite these setbacks, reforms
would continue to move forward in Wenling. She noted that the
current reform experiments were too entrenched and popular with
the people for new party bosses to try and roll back. Nor was
there a good justification for them to do so. Moreover, Chen
was popular with the Wenling party leaders. His efforts had
garnered significant positive international attention and earned
the city praise from all levels of the Chinese government.
Ironically for Chen, but fortunately for Wenling and China,
Chen's success had not earned him any promotions, since his
bosses were anxious to keep him in place for the time being to
continue his work.

--------------
Eyes on Yunnan
--------------


20. (C) Zhou said that while electoral reforms had stalled in
Xinhe, they were moving forward and on track in Yunnan's Honghe
township, part of a minority-controlled district. Zhou said
that she and Li had been working to train and, eventually,
implement the same reforms there that they had been working on
in Luoheng. She said that unlike Wenling, when she visited
Honghe in September, party leaders were excited to move forward
with these reforms when they held their elections next year. As
a hedge against local leadership transfers, Zhou said they had
been working with many of the neighboring areas and party
officials to build a base of support for these programs that
would hopefully be sufficient to overcome any hesitancy from a
new incoming party secretary.

--------------
Comment: Hints of Real Change
--------------


21. (C) In a country where political pageantry is paraded as
democracy, and scholars and officials vehemently argue that the
people neither want nor need real authority over the government,
it is refreshing to find people of influence committed to real
reform and genuine democratization. While Beijing is currently
on board with the Wenling experiments, as Chen and others like
him push the boundaries, Beijing's tolerance for political
reform and willingness to share power--even at the local

SHANGHAI 00007140 005.2 OF 005


level--may ultimately be tested. End comment.
JARRETT