THE SCIENCE OF HARMONY--VIEWS FROM EAST CHINA

C O N F I D E N T I A L SECTION 01 OF 07 SHANGHAI 000374

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STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE
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E.O. 12958: DECL: 06/19/2057
TAGS: PGOV PINR EINV ECON CH
SUBJECT: THE SCIENCE OF HARMONY--VIEWS FROM EAST CHINA

REF: A) BEIJING 2188; B) SHANGHAI 6459 (06); C) SHANGHAI 3844 (06); D) CHENGDU

146

SHANGHAI 00000374 001.2 OF 007


CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate,
Shanghai, Department of State.
REASON: 1.4 (b),(d)




1. (C) Summary. According to several East China contacts, the
"Scientific Development Concept" [kexue fazhan guan] (SDC) now
is the core guiding ideology for the Communist Party, building
on and supplanting the "Three Represents." The SDC takes as its
goal the building of a Harmonious Society which has the end goal
of doing away with all "social contradictions." Both the SDC
and Harmonious Society put an emphasis on fairness of
opportunity, although not necessarily fairness of outcome and
both are designed to compensate for decades of overemphasis on
efficiency in economic development at the cost of societal
inequities. The stress on harmony highlights the party's
30-year move away from the traditional Marxist notion of "class
struggle." In fact, the ideological shift, while ostensibly
holding the Marxist road, is essentially taking China
irrevocably down a decidedly un-Marxist path. Taken together
with the emerging "Socialist Core Values," the SDC and
Harmonious Society form a complete ideological package that
seeks to provide purpose, direction, and relevance to the Party.
It remains to be seen if Hu, like his predecessors Jiang Zemin
and Deng Xiaoping, will be able to write his ideological
contributions into the party constitution. End summary.

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Defining Scientific Development, "The Guiding Doctrine"
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2. (C) In a series of conversations in recent months, Poloff
probed East China contacts on Hu Jintao's two core ideological
ideas, he Scientific Development Concept (SDC) and Harmonious
Society. Unlike Embassy contacts, who expressed diverse views
on which of these two concepts would be the "controlling
element" in the final version of Hu's ideology (Ref A),our
contacts uniformly considered the SDC, adopted by the Central
Committee at the October 2003 Third Plenum of the 16th Party
Congress, to be the core of the current leadership's ideological
canon. On January 22, Shanghai Party School (SPS)
Administration Institute Dean Chen Xichun stated that in recent
years, the SDC had been the most important ideological
formulation, occupying a "commanding and guiding" position. The
SDC, Chen said, was the next stage in ideological development,
growing out of both Deng Xiaoping Theory and Jiang Zemin's
"Important Thinking of the Three Represents."


3. (U) The 2005 Fifth Plenum elaborated that the SDC spelled
out that in order to develop scientific development--in contrast
to the "GDP-at-all-costs" mindset that had dominated the first
two decades of reform--involved "six imperatives." Those
included: 1) maintaining steady and fairly rapid economic
growth; 2) accelerate changing the mode of economic growth (or
as Professor Wang Xiaoguang with the National Development Reform
Commission put it in an October 2005 Liaowang article, shifting
from a growth model that relied on "high resource inputs" to
something more sustainable); 3) enhancing independent innovative
capabilities; 4) coordinating development between urban and
rural areas; 5) building a "harmonious society;" and 6)
deepening reform and opening up.


4. (C) Chen explained that the SDC took "putting people first"
as its motto. The SDC was not just an economic program, but
also encompassed political, cultural, and social development.
These different types of development also needed coordination,
with social development being key among these. To that end, the
Party had put into effect new evaluative standards for cadre
that emphasized not just GDP growth, but overall development.
During a January 22 meeting, Tongji University Professor Frank
Peng said that these changes in evaluative criteria reflected
the shift towards "common prosperity" from Deng's "let some get
rich first" mindset. He noted that Shanghai was now calculating
"green GDP" and explained that the subtext of cadre training was
to instill ideals in the cadre and give them reasons to do their
jobs other than for personal financial gain. Peng opined that
such efforts still did not have much traction.

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It May be Fast, But is it Good and Fair?
--------------


SHANGHAI 00000374 002.2 OF 007



5. (C) Chen said that the SDC was a reaction to the "excessive"
focus on GDP growth at all costs, the lack of control over the
consumption of natural resources, and the neglect of the needs
of workers and safety issues of Hu's predecessors. According to
Chen, China had "developed quickly, but it has not been
sustainable." During a January 23 discussion, China Executive
Leadership Academy Pudong (CELAP) International Exchange and
Program Director Jiang Haishan said that the policy towards
economic growth had now shifted from "both fast and good" to
"both good and fast," thereby switching the relative weight of
the two adjectives. During an April 6 discussion with scholars
from the Jiangsu Academy of Social Sciences (JASS),Director of
the Research Coordination Office Tian Boping explained that
whereas Deng Xiaoping had said "development is the last word"
Hu, under the auspices of the SDC, was saying "allowing people
to live better lives is the last word."


6. (C) During an April 3 meeting, Shanghai Academy of Social
Sciences (SASS) Deng Xiaoping Thought Research Institute
Director Xia Yulong explained that the contradictions between
coastal China and China's interior had developed over decades
and that China would need a long time to narrow the gap. The
current priority of the SDC was not to shrink the gap, but to
stop its growth. Xia said that there were some good trends in
this regard, noting that in 2006, the GDP growth rate in some
Western provinces was faster than that in the Eastern provinces.
However, the overall growth in the West was still far below
Eastern China. Eastern China enjoyed certain favorable
geographical conditions that dictated it would likely always
have a more advanced economy than the landlocked Western
provinces. The only way China was going to narrow the gap
between the coast and interior, Xia opined, was to slow
development in coastal areas. The central leadership through
the SDC had done away with the policy of favoring the coast and
adopted a "fair" policy that favored neither region.

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The Origins of an Ideology
--------------


7. (C) During a January 23 discussion, SASS Deng Xiaoping
Thought Research Institute Deputy Director Cheng Weili agreed
that the SDC was the guiding doctrine of the party and said it
was identified personally with President Hu Jintao. Cheng
explained that it emerged out of the nexus of three
circumstances. First was the SARS epidemic of winter/spring
2002-2003. In response to the crisis, Chinese Academy of
Engineering Secretary Xu Kuangdi came up with the "putting
people first" slogan to characterize Hu and Wen's approach to
dealing with the outbreak. (Note: Xu was also a popular former
mayor of Shanghai who was removed abruptly and demoted to the
engineering academy in 2001 due to personality conflicts with
then-Shanghai Party Secretary Huang Ju. End note.) Second,
during this period, the leadership began to recognize that
development was at a crossroads and that China could no longer
rely on natural resource-driven growth. Third, in the summer of
2003, the Rand Corporation published a report discussing eight
problems with China's development (Note: Cheng did not elaborate
on what the eight problems were. End note.). Chinese
think-tanks and policymakers took note of the report, which,
Cheng claimed, highly influenced the development of the SDC.

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I'd Like to Teach the World to Sing in Perfect Harmony
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8. (C) Cheng explained that under the guiding ideology of the
SDC, the Party had established the goal of building a Harmonious
Society. The idea of building a Harmonious Society was
officially written into party ideology at the Sixth Plenum in
October 2006, although it had been in discussion for several
years before that. As laid out at the Fifth Plenum, the
creation of a Harmonious Society was one of the "six
imperatives" that the SDC was to address. The two main elements
of building a Harmonious Society as laid out in official press
reports were a focus on harmony between people and harmony
between people and nature.


9. (C) Cheng argued that Harmonious Society was the main goal
of the SDC. In other words, as Nanjing Normal University
Professor Zou Nongjian explained during an April 5 meeting,
building a Harmonious Society--which was aimed at overcoming
contradictions in society, the world order, and in all areas of
life--was the goal and the SDC was the means to reach it. Zou's

SHANGHAI 00000374 003.2 OF 007


sentiment was expressed more or less uniformly by all of the
contacts with whom we spoke.


10. (C) According to Cheng, this goal was as much propaganda
and utopianism as it was science. Harmonious Society was the
"strategic direction" (zhanlue fangzhen) for social construction
and, in fact, had as its endpoint only "relative harmony," since
"ultimate harmony" could only be realized under the
establishment of communism. Chen Xichun explained that
Harmonious Society was a "practical plan" (shiyong jihua) with a
series of systemic goals and would be used to meet the public's
desires when it came to overall development. Harmonious Society
was now considered an "essential element" (benzhi shuxing) of
socialism and was key to understanding what socialism was.


11. (C) Cheng believed that leftists such as economist Liu
Guoguang and television business analyst Lang Xianping (Larry
Lang) had figured prominently in the formulation of the
Harmonious Society doctrine in 2004-05. Cheng also praised the
work of Professor Zheng Yongnian, who identified two extreme
forms of "worship" that Harmonious Society was meant to correct.
First, was worship of the market, which did not resolve all the
problems with education, the environment, and other areas.
Second, was the worship of government power, which Cheng said
was characterized by the works of the Chinese Academy of Social
Sciences' Marxist Academy. (Note: Zheng Yongnian is a professor
in Singapore. He was originally from the PRC and earned his PhD
in the United States. End note.)


12. (C) Cheng also explained that the only way for China to
develop a Harmonious Society was to maintain a peaceful
international environment. To that end, Cheng said, the central
leadership had also developed the "Harmonious World" concept to
govern its foreign policy. (Ref B)

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Harmony: It's all in Your Mind
--------------


13. (C) The overarching purpose of Harmonious Society was to
establish social stability, according to Cheng. In order to do
this, it was crucial to change people's attitudes and make them
feel cared for. He stressed that a key element of building a
Harmonious Society was the notion of justice. Previously, the
party leadership had largely ignored social dynamics but now it
was moving to address the bifurcation of society and ensure that
there was a social safety net for everyone. The goal of
changing people's attitudes, summed up by the slogan "Harmonious
Civilization," was crucial to social stability. The government
wanted to end the majority's sense of relative deprivation,
which it perceived as the root cause behind many protests, and
instead create a "harmonious" popular psychological outlook.

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Let Them Eat Cake
--------------


14. (C) During an April 5 discussion, Nanjing University
Professor Hua Tao said that in simplest terms, Hu's ideological
theories were designed to coordinate different societal
interests and were a reaction to top leaders' concerns over
social stratification, or the emergence of different interest
groups. According to Hua, every society had some stratification
of interest groups, but when that stratification became too
pronounced, it threatened social stability. Increasing unrest
in recent years had led Hu and Wen to be more concerned with
equitable development and satisfying the many diverse societal
constituency interest groups than their predecessors had been.
In the past, the mindset was that if the cake was bigger,
everyone would get to eat some. Now, they realized that it was
not enough just to have a big cake, but that it must also be
divided properly.


15. (C) During a March 16 meeting, China Europe International
Business School (CEIBS) Honorary President and former Chinese
Academy of Social Sciences Vice President Liu Ji also used the
"cake" analogy, noting that Deng Xiaoping had been focused on
expanding the economic "cake" so that there was enough for
everyone through marketization. Jiang's Three Represents, had
also focused on growing the cake through harnessing the
productive forces represented by entrepreneurs on the one hand,
and expanding the educated class and giving them a greater
leading role on the other. Hu, with his ideological
contributions, aimed to rectify some of the "contradictions"

SHANGHAI 00000374 004.2 OF 007


that had arisen through the past quarter century, without
undoing China's burgeoning market economy. In other words, Hu
was trying not only to make the cake larger, but ensure that
everyone had the opportunity to have some. Liu was quick to
point out, however, that there were no guarantees that everyone
would eat the same size piece.


16. (C) Cheng Weili argued that China's development was not a
zero-sum game. He explained that the party was focused now on
national participation as the key to continued development. A
bigger cake could only be obtained if everyone--not just coastal
provinces--contributed to growth. According to Cheng, in the
past, development theory advocated allowing some to get rich
first. Now, however, the party's new theory said that China
must focus on building a better social safety net--including
retirement payments, education, and health care--and growing its
infrastructure in order to allow everyone a good basis to
actively contribute to China's overall economic development. He
added that a fleet of ships could only travel as fast as its
slowest ship. If China did not improve its poorest performing
provinces, overall economic development would suffer. Xia
emphasized that opportunity fairness and outcome fairness were
not the same thing and noted that whereas past economic
development plans had focused on opportunity, current plans now
strove to strike a balance between the two. Only when there was
a balance, Xia argued, could China achieve a harmonious society.

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The Fulcrum of Fairness and Efficiency
--------------


17. (C) During a May 11 discussion, Nanjing University
Professor Hua Tao said that during China's socialist period
under Mao, there had been too much emphasis on "fairness," or
equality of outcomes. During the past 20 years of capitalism,
however, the pendulum had swung too far the other direction
emphasizing "efficiency," or allowing economic disparities to
develop while China focused on the most efficient methods of
production and wealth building. Harmony--attained through
Scientific Development--was the balance needed between the two
concepts. Given the excesses of efficiency that China had
experienced, it was only natural that there be a slight emphasis
on fairness at the present to correct for this.


18. (C) Professor Chen Xichun argued that while it was
impossible for the Party to get rid of its strong ideological
bias toward "fairness," it should not allow the gap between
"fairness" and "efficiency" to get too big. He said that if
"fairness" came to hold a significant lead over "efficiency," it
would breed the re-emergence of government re-distributive
programs that would reduce much-needed competition.
Nevertheless, he agreed with the current thrust of party policy,
noting that more attention needed to be paid to "fairness" and
that "fairness" was currently the focus of cadre training.

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Harmony Requires a Strong Central Hand, But Not Too Strong
-------------- --------------


19. (C) According to CELAP's Jiang, and CELAP General Office
Deputy Director Liu Jingbei, most areas in China would require
transfer payments from the central government to build a
Harmonious Society. The key to doing so was macroeconomic
control, particularly regarding investment. Liu noted that
Beijing must be able to prevent each province from independently
planning its investment strategy, thus creating great economic
inefficiencies. Towards this end, the central government needed
to centralize power in the near term, both to institute
macroeconomic controls and also to tighten up enforcement of
administrative measures, which were often related to the
macroeconomic strategy, such as the recent punishment of leaders
in Mongolia and Henan for violating policies on the construction
of power plants and the use of land, respectively.


20. (C) During an April 5 discussion, Nanjing University
Sociology Professor Zhou Xiaohong explained that Beijing was
caught between a rock and a hard place. On the one hand, the
center needed to maintain control or it could not implement
national-level macroeconomic policy. However, if it became too
controlling it also risked smothering local economic growth.
"If you release, it is chaos, but if you grasp, it will die."

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The Shift From Class Struggle to Capitalism

SHANGHAI 00000374 005.2 OF 007


--------------


21. (C) Several contacts emphasized that Hu's Harmonious
Society formulation epitomized the Party's movement away from
its revolutionary roots and doctrine of class struggle over the
past 30 years and its search for a new form of Marxism to suit
today's realities. (Note: The 1978 3rd Plenum that returned
Deng Xiaoping to power formally rejected class struggle as the
Party's core policy framework, substituting economic development
in its place. End note.) During a May 8 conversation with the
Consul General and Pol/Econ Section Chief, Weyerhaeuser China
General Manager Zhang Renren said that Hu was "rewriting"
Communist ideology to replace class struggle with "harmony."
During a January 18 discussion, Shanghai University Professor
Zhu Xueqin said that at its core, Harmonious Society was about
doing away with conflict. That, Zhu said, put it in direct
conflict with the fundamental tenets of Marxism which advocated
class struggle. He believed that today's leaders were focused
on the practical aspects of retaining power, and left it up to
state-sponsored scholars to perform the mental gymnastics
necessary to make the contradictions with past ideological lines
mesh.


22. (C) Zou Nongjian explained that the struggle laid out under
traditional Marxism--class struggle--was over. China had now
entered the "societal building" phase where it was crucial to
focus on cooperation and establishing harmony. The move away
from "struggle and revolution" phase of Marxism began under Deng
and had only deepened over the past 28 years. SASS Vice
President Tong Shijun explained during an April 12 meeting, Marx
had argued that struggle was only a tool to reach harmony and
Chinese Marxism had advanced past the need for that tool.


23. (C) Tong was adamant, however, that moving past
class-struggle did not mean that China had given up on Marxism
in favor of becoming a capitalist country. He said that as part
of the shift from struggle to harmony, China had learned to
co-opt capitalism rather than struggle against it as a means to
work towards a non-capitalist utopia. China had adopted the
motto of "capital, yes; capitalism, no," meaning that China did
not see capital in and of itself as evil, but if profit was the
sole criteria for evaluation, then that was unacceptable.
According to Tong, the only way to build a sustainable market
economy was to combine it with socialism, citing both Marx and
George Soros as saying that a strictly market economy left to
its own devices was ultimately doomed.

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Death Knell for Marxism?
--------------


24. (C) During a March 23 discussion, Nanjing University
Professor Gu Su argued that President Hu Jintao, through SDC and
Harmonious Society, had in effect managed to kill Marxism.
While former President Jiang Zemin had succeeded in halfway
dismembering the concept of Marxism in China, Hu's ideological
contribution was "the last nail in the coffin." Three of the
core elements of Marxism--dictatorship of the proletariat,
scientific socialism (i.e. public ownership and the command
economy),and class struggle--had now irrevocably been
abolished. Jiang started with his inclusion of entrepreneurs
into the Party. Hu finished the process with his ideological
shift toward harmony and pushing through the private property
law at the 2007 NPC.


25. (C) Like the apocryphal scientist who boiled the frog by
gradually increasing the heat, Gu said Hu was a master of
pushing changes through the Chinese political system in a
gradual way so that by the time party hardliners figured out
what was happening, it was too late for them to change the
course Hu had laid out. The beauty of Hu's prowess was that
since he structured his ideological shift in Marxist terms,
party leftists had no platform from which to attack him. Hu had
initially made a great show of supporting party leftists through
reassuring words and actions, such as reinstating the Marxist
Institute, which had led party reformers to lose hope that
change would come. However, as Hu's power base had firmed and
his strategy was becoming clear, Gu said it was the leftists who
were now "feeling cheated" by Hu.

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Socialist Core Values or Sex, Drugs, and Rock and Roll
-------------- --------------


SHANGHAI 00000374 006.2 OF 007



26. (C) As part of building a Harmonious Society, the party had
recently adopted what it referred to as the "Socialist Core
Values." According to a December 20, 2006 People's Daily online
article, the four main values were: 1) "the Marxist guiding
ideology; 2) the common ideal of socialism with Chinese
characteristics; 3) the national ethos with patriotism as the
core and the spirit of the times with reform and innovation as
the core (what Professor Tong referred to as "zeitgeist"); and
4) the socialist concept of honor and disgrace" "with `the eight
honors and the eight disgraces' as the major content" (Ref C).
JASS Professor and President of the Political Science School
Bian Min explained that a national ethos was needed given the
pervasive selfishness that had developed since reforms began.
He said that only if the people were united behind the nation
could the nation truly develop. He added that the focus on
reform and innovation was a reaction to a backlash within the
party against reform and opening.


27. (C) According to Tong, the Party had formulated the
Socialist Core Values for two main reasons. First, the
government was worried about maintaining a leading role in an
increasingly pluralistic society. Second, there was a pervasive
underlying fear that chaos might arise if society lacked common
values. JASS Professor Tian said the Chinese value system had
become too diversified and had adopted too many Western ideals
wholesale. He acknowledged that some Western values, such as
charity and respect for human rights, were good and should be
adopted. However, Chinese were also adopting negative aspects
of Western values, such as "whoring, drugs, and free sex." The
Socialist Core Values was aimed at overcoming these negative
influences. According to Tong, by providing a core set of
social morals, the Party hoped to provide a unifying set of
beliefs to maintain social stability while rallying the people
around the party.


28. (C) Hua noted that there were still many different
interpretations of what constituted the Socialist Core Values
but that they all had a common theme. Whereas Harmonious
Society was the goal of the Party and the Scientific Development
Concept was the method and ideology used to reach it, Socialist
Core Values were the spiritual essence of the party that people
could cling to, helping define the relevance of party leadership
to achieve its goals. According to Hua, many scholars had long
been arguing that China had "walked too far to the right" and
lost its basic values system. They argued that economic reforms
in and of themselves had limited utility, in that they contained
no values for which to reach. Once people lost their values,
they lost their spirituality and "getting rich" became the only
goal. Hua explained that it was problematic for a ruling party
whose platform was built on lofty ideals when the people lost
all belief in idealism. The party had done little to help its
image by allowing corruption to become such a pervasive problem
among officials at all levels. When people did not believe in
ideals and there were no guiding values or beliefs, people began
seeing the party as having little relevance and questioning why
it should hold a monopoly on power.


29. (C) According to Hua, beginning with the Three Represents,
the party began trying to redefine its relevance. The party had
been the party of the workers, but workers were being laid off.
It had been the party of the agricultural class, but the farmers
were largely impoverished. Under the Three Represents, the
party tried to broaden its appeal by claiming to represent
everyone, not just its traditional constituency. By trying to
institute a set of core values, Hu was trying to pick up where
Jiang had left off by redefining not just who the party
represented, but what the Party stood for.


30. (C) Xia noted that the Socialist Core Values was still only
a theory and that it would take a long time to become a reality.
He said that the decline of morality in Chinese society was a
"fact" that could not be avoided during societal transition.
Old beliefs had been erased, but new ones had not yet been
established. The morality needed to accompany the market was
still missing. Moreover, structural problems within the
political system had allowed many government officials to use
the market economy to parlay their positions into personal
profit. Until the structural issues were resolved, Xia said,
establishing a new morality would not be able to resolve all of
the problems. Xia argued that China needed a more complete
legal system and increased supervision of government officials
by the media and the people.

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SHANGHAI 00000374 007.2 OF 007


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Ideological Differentiation: No Contradictions, Merely
Expansions
-------------- --------------
--------------


31. (C) According to Nanjing University Sociology Professor
Zhou Xiaohong and Hua Tao, every new leader needed to
differentiate himself from his predecessor and each faced his
own unique problems and circumstances. JASS Institute of
Sociology Director Chen Yi argued, however, that none of these
ideological differentiations were mutually contradictive.
Indeed, each successor's contributions built on and deepened the
legacy of his predecessor. First, there was Deng Xiaoping's
Theory which took building a "well-off society" (xiaokang
shehui)--as defined by attaining a per-capita GDP of USD 800 by
the end of the century--as its goal. Then, Jiang Zemin
formulated the Three Represents and upped the ante to establish
an "all around moderately well-off society" (quanmian xiaokang
shehui). To do so, Jiang advocated the "Six Mores," including
having: 1) the economy be more developed; 2) politics be more
democratic; 3) culture being more civilized; 4) science and
technology becoming more advanced; 5) society becoming more
harmonious; and 6) people attaining more wealth. Now, Hu was
using the SDC to build a Harmonious Society. Each leader
expounded on some part of his predecessor's words in an effort
to adapt to the changing reality of a developing country.


32. (C) SASS Vice President Tong argued that since the
beginning of reforms, the leadership had pursued a straight
course that had to be adapted to the reality of the situation.
For instance, both Deng and Jiang had stressed socialism in
theory, but in practice, China was at a stage where it needed to
focus on market development. If it had not been for the
previous decades of stress on economic development and building
wealth, President Hu would not have the needed resources to fix
the problems of today. Unlike the other contacts with whom we
spoke, Tong argued that in fact, there had never been an
"ideological" shift in the party, rather a series of "policy"
shifts, which many leaders and scholars "mislabeled" as new
ideologies in order to differentiate themselves from their
predecessors. When pressed, however, Tong did acknowledge that
there was no clear line between policy and ideological theory.

-------------- -
Hu May Get the Constitution, But is it Needed?
-------------- -


33. (C) Cheng was confident that Hu would get the SDC into the
party constitution at the 17th Party Congress, making it a
matter of time before the state constitution was likewise
amended. Hua on the other hand, was less convinced that Hu and
Wen could succeed in changing the party constitution. He noted
that there were many academics opposed to Hu's desire to rewrite
the document. Although rewriting the party constitution to
reflect the leading ideology had become almost a perk of being
the top leader--the document was altered to reflect both "Deng
Xiaoping Theory" and "The Important Thinking of the Three
Represents"--the constant revisions had turned the constitution
into a meaningless document. Hua said that having "The
Scientific Development Concept" in the constitution was not
necessarily in and of itself a bad thing, but added "why is it
necessary for every new ideology to go in?
JARRETT