EAST CHINA CONTACTS ON LEADERSHIP GOSSIP

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000213 SIPDIS SIPDIS DEPT FOR EAP/CM, INR/B AND INR/EAP STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE TREAS FOR OASIA - DOHNER/CUSHMAN USDOC FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN NSC FOR WILDER AND TONG E.O. 12958: DECL: X1 MR TAGS: PGOV PINR EINV ECON CH SUBJECT: EAST CHINA CONTACTS ON LEADERSHIP GOSSIP REF: SHANGHAI 101 SHANGHAI 00000213 001.2 OF 003 CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate, Shanghai, Department of State. REASON: 1.4 (b),(c),(d) ¶1. (C) Summary. Shanghai Party Secretary Xi Jinping, Jiangsu Party Secretary Li Yuanchao, Liaoning Party Secretary Li Keiqang, and Trade Minister Bo Xilai are emerging as the public face of the Fifth Generation of the Chinese leadership. Two East China contacts believed that of the four, Li Yuanchao stood the best chance of getting promoted to the Politburo Standing Committee and eventually replacing Hu Jintao as Party Secretary. While frequently mentioned as the leading candidate to replace Hu, Li Keqiang was tainted by rumors of corruption due to his having served in some of China's most corrupt provinces. Li Yuanchao, on the other hand, was virtually free of such rumors. Although he had a reputation for using people, Bo Xilai was deemed the odds on favorite to replace Wu Yi on the Politburo as Vice Premier responsible for trade issues. Meanwhile, Xi Jinping's personal life was the subject of much speculation, with rumors circulating about a pending divorce from his superstar wife. One contact noted that, with important leadership changes pending, President Hu was still resistant to the idea of reconvening the Party's traditional back-room deal making this summer at the seaside resort of Beidaihe to facilitate the decision-making process. Vice President Zeng Qinghong had organized his own meetings at Beidaihe last year and had been taken to task for it by several party elders. End summary. ¶2. (C) This message summarizes views on leadership issues expressed by a range of contacts over separate meetings, including: a March 23 discussion with Nanjing University Professor Gu Su; an April 6 meeting with Nanjing Party School Foreign Affairs Office Director Dou Ruilin; an April 12 discussion with Fudan University Journalism graduate student Lu Lei; and a March 25 discussion with Zhejiang High Court judges. -------------- The Four Great Heavenly Kings -------------- ¶3. (C) During the April 12 discussion with Poloff, Fudan University graduate student Lu Lei said that Chinese, Taiwan, and Hong Kong press, as well as local Bulletin Board System (BBS) users all referred to Shanghai Party Secretary Xi Jinping, Jiangsu Party Secretary Li Yuanchao, Liaoning Party Secretary Li Keiqang, and Trade Minister Bo Xilai as the rising political stars of the Fifth Generation. Although none were currently on the Politburo, the four had been dubbed the "Four Great Kings of Heaven" (si da tian wang),a play on the same title given to four male superstar Canto-pop singers. Lv noted it was also widely discussed how at least three of the four--Xi, Bo, and Li Yuanchao--were members of the so-called "princeling faction." -------------- Li Yuanchao: Same Story, Different Twist -------------- ¶4. (C) During the April 6 meeting, Nanjing Party School Foreign Affairs Office Director Dou Ruilin told Political Assistant FSN that with Xi's move to Shanghai, Li Yuanchao's transfer to Beijing was a done deal. Dou said that Li would move to Beijing "soon" to assume responsibility for propaganda. Dou was confident that Li would also be in line for a slot on the Politburo Standing Committee (PBSC) at the 17th Party Congress and would be designated as Hu Jintao's successor. (Comment: It was unclear if Dou meant that Li would fill a slot on the PBSC being vacated by Li Changchun, who currently holds the overall propaganda portfolio, or if he would take over from Liu Yunshan as head of the Propaganda Department. Either way, if Li Yuanchao--who has a reputation for openness and allowing the media greater freedoms in Jiangsu--does take over propaganda, it will likely be a positive thing for China's press. End comment.) ¶5. (C) During the March 23 discussion, Nanjing University Professor Gu Su said that of the current provincial front runners, Li Yuanchao had the best odds of getting a seat on the PBSC. He noted that Liaoning Party Secretary Li Keqiang--the other most frequently cited candidate--had served in some "problematic" places like Hunan and Liaoning that had long been tainted by the stain of corruption. Gu said that as a result, SHANGHAI 00000213 002.2 OF 003 there were sometime disparaging remarks made and unflattering stories told about Li Keqiang. Li Yuanchao, on the other hand, was rarely, if ever, bad mouthed by colleagues or the people. Like Dou, Gu also thought Li Yuanchao had a good chance of being named as Hu's successor. ¶6. (C) Gu said that if Li were promoted, he expected Nanjing University Party Secretary Hong Yinxing to go to Beijing with him. Hong, an economist by training, was formerly the dean of Nanjing University's Business School. Hong had earned his Masters at Nanjing University and his PhD at People's University and had studied under planned economy guru Liu Guoguang. Hong was close to Li and would "do what Li asks." Hong had, for instance, helped Li independently organize a press conference at the March People's Congress and helped Li organize twice-a-year symposiums at Nanjing University. Gu and Hong were classmates during their stints at Nanjing University and Gu assessed Hong to be neither "too conservative" nor "too liberal." -------------- Change of Guard in the Trade Bureaucracy -------------- ¶7. (C) According to Professor Gu, Vice Premier Wu Yi would be replaced by Trade Minister Bo Xilai. Wu, Gu said, really did not want to step down, but would have little choice. Hu had supported promoting Wu to the Politburo Standing Committee at the last Party Congress but was blocked by Jiang Zemin, who for an unknown reason opposed Wu's continued ascent. Gu said Bo had a reputation for using people and trading on his father's name. (Note: Bo's father is party elder Bo Yibo. End note). Bo could also be vindictive. Gu noted that when Bo was serving in Liaoning, he had a Hong Kong journalist sentenced to eight years in prison for "business wrong doings" after the reporter wrote an unflattering article about Bo, his wife, Bo's family ties, and Bo's policies. Pettiness aside, Gu said Bo was "quite liberal" in his views, was "typical" of the open-mindedness of graduates of Beijing University, and was very concerned about foreigners' views of China. Gu assessed that Bo's policy orientation was much more open than that of Premier Wen Jiabao. He noted that Bo's father had also held very liberal views. -------------- -------------- Xi Jinping: Marital Troubles? What Marital Troubles? -------------- -------------- ¶8. (C) During a March 25 discussion with FSN Rule of Law Coordinator, Zhejiang High Court judges reported rumors that Xi was preparing to divorce his wife, Peng Liyuan. According to Lu Lei, Peng is a famous singer with a PLA troupe who resides in Beijing. Lu said that the rumors of Xi's divorce had spread rapidly along the Fudan University BBS when Xi was named as Shanghai Party Secretary. She believed these were based in part on the couple's long-standing long-distance relationship. She said that shortly after these rumors appeared, Chinese media published an account of the couple's love for each other, explicitly stating that after the birth of their daughter, the couple's "feelings for each other stabilized." She said several netizens posted entries questioning why the media needed to clarify that their feelings for each other had stabilized. They speculated that perhaps Xi's marriage had been rocky in the past, but had since resolved itself, or that the reference to marital bliss was an indication that things perhaps were still rocky. Lu noted that such postings quickly disappeared and that there was currently no speculation on Xi's family situation on the BBS. She said that Xi's daughter was about 18 years old and studying in college, although she was not sure where. -------------- No Beidaihe; Zeng Called to the Mats -------------- ¶9. (C) Gu reiterated that he expected the political infighting to heat up this summer (Reftel),especially over remaining top positions in Shanghai, Zhejiang, and Jiangsu. Gu said he did not believe that Hu planned to reconvene the traditional Beidaihe leadership conference this summer, despite that venue's traditional role as a vehicle to facilitate personnel moves in a more relaxed atmosphere. He said that last year, Vice President Zeng Qinghong had organized his own leadership meetings at the seaside resort at party elder Jiang Zemin's behest. Jiang had wanted a forum to discuss personnel moves in the run up to the Party Congress as well as economic policy. However, the meetings turned out to be "a disaster" for Zeng, with several SHANGHAI 00000213 003.2 OF 003 party elders criticizing Zeng for trying to roll back transparency. The meetings were also divisive, with some top leaders, like Vice Premier Huang Ju, attending and others, like legislative chief Wu Bangguo, staying away to avoid being tarred as a "splitist." Gu said that there were many people within the party who compared last year's Beidaihe fiasco to the infamous "Lushan Conferences" held by Mao Zedong. Gu said that Mao had convened three conferences at Lushan, each marked by a violent power struggle and each a disaster for the party. JARRETT