PBSC UNRESOLVED; HU FLEXING HIS POLITICAL MUSCLES

S E C R E T SECTION 01 OF 02 SHANGHAI 000641 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, WRIGHT USDOC FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN NSC FOR WILDER AND TONG E.O. 12958: DECL: X1 MANUAL REVIEW TAGS: PGOV PINR ECON SOCI CH SUBJECT: PBSC UNRESOLVED; HU FLEXING HIS POLITICAL MUSCLES REF: SHANGHAI 662 SHANGHAI 00000641 001.4 OF 002 CLASSIFIED BY: Simon Schuchat, Deputy Prinicpal Officer, U.S. Consulate , Shanghai . REASON: 1.4 (b),(d) ¶1. (C) Reflecting the rapidly shifting trends on the ground, Shanghai contacts present differing accounts of top-level decision making on Communist Party personnel issues four and three weeks before the 17th Party Congress. Our contacts are divided over whether Vice President Zeng Qinghong, Premier Wen Jiabao, National People's Congress Chairman Wu Bangguo, and propaganda chief Li Changchun will remain on the Politburo Standing Committee (PBSC). Thus far, the only current PBSC member that all Shanghai contacts agree will remain in place is President Hu Jintao. Perennial favorites Liaoning Party Secretary Li Keqiang, and Organization Department Head He SIPDIS Guoqiang remain on the recent roster. One contact pointed out that Hubei Party Secretary Yu Zhengsheng, often a name mentioned as a PBSC candidate, may not be able to overcome his past to get the promotion; his brother, a former government official, defected to the United States in the late 1980s. End summary. -------------- Questions Linger About Current PBSC Leaders -------------- ¶2. (S) During a September 17 discussion, Shanghai Municipal People's Congress (MPC) Researcher Zhou Meiyan said that according to information she had heard from well-connected scholars at a meeting the night before, National People's Congress (NPC) Chairman Wu Bangguo will retire. This news has caused much rejoicing among her MPC colleagues who dislike Wu for his conservatism and unwillingness to press for the NPC or local People's Congresses to move outside of their rubber stamp roles. She also heard that Vice President Zeng Qinghong will definitely be staying on, leaving Hu, Wen, and Zeng as the current PBSC members to be retained at the Party Congress. ¶3. (S) Contrary to Zhou, Internet entrepreneur Tang Haisong during a September 19 discussion said he had recently heard from a friend who works in the State Council that Premier Wen is going to step down. Wen has made many enemies over his handling of the economy. Like many people in his position, Tang was none too happy with Wen's handling of the economy. ¶4. (C) During a September 20 discussion, Shanghai Institute of International Studies Director of Strategic Studies Institute --and former military officer--Xia Liping said that the four top PBSC members would remain in position. In particular, he thinks it unlikely that Zeng will step down. ¶5. (C) During a separate September 20 discussion, Dean of Jiaotong University's International and Public Affairs School Hu Wei opined that Hu, Wu Bangguo, and Wen will all be staying on. He added that Wen is the "most liberal and open minded" member of the PBSC and the most inclined towards political reform. He also believes it unlikely that propaganda chief Li Changchun will step down. It would be too blatant a power play to try and remove Li over any sort of illness so long as he is continuing to function. (There are rumors Li Changchun has cancer; see reftel.) More likely, Li will be kept in place but marginalized and made ineffective. For instance, Li would no longer receive the documents he ought to see or be invited to meetings he otherwise ought to attend. -------------- We're Moving On Up -------------- ¶6. (C) Professor Hu further said on September 20 that he believes the PBSC roster will be reduced from nine members to seven at the October Party Congress, and that the party will hold fast to the "seven-up, eight-down rule" established at the last Party Congress in 2002. In addition to Hu, Wen, Wu Bangguo, and Li Changchun, Liaoning Party Secretary Li Keqiang and Organization Department head He Guoqiang will be joining the SHANGHAI 00000641 002.3 OF 002 lineup. He did not say who he thought the seventh member will be. ¶7. (C) Professor Hu had a mixed assessment of Hubei Party Secretary Yu Zhengsheng's prospects for promotion to the PBSC. SIPDIS He noted that in the 1980s, Deng Xiaoping had hand-picked Yu as a future Premier. Yu, at the time, worked with Deng's elder son, Deng Pufang, at the Kanghua Corporation. However, in the late 1980s, Yu's older brother, who worked in either the Ministry of State Security or the Ministry of Public Security, defected to the United States, effectively killing Yu's career. Although Yu eventually made a comeback of sorts, Professor Hu wonders if Yu will be able to cast off the shadow of his brother's "treason." ¶8. (C) Professor Hu said that Minister of Commerce Bo Xilai, and President Hu proteges Jiangsu Party Secretary Li Yuanchao and head of the United Front Work Department Liu Yandong are all heading for slots on the Politburo. Hu protege Ling Jihua, recently promoted to be Director of the Party's General Office, is also a probable candidate. -------------- Hu: Great Wisdom That Appears Foolish -------------- ¶9. (C) Professor Hu was amused by observers who underestimate President Hu's political strength. Throughout history, the most effective Chinese politicians have been Daoists, not Confucians, and President Hu is more the former. President Hu's career strategy is based on "using the soft to overcome the hard" (yi ruo ke gang) and hiding his strengths. Hu is an example of "great wisdom under the guise of foolishness" (da zhi ruo yu). Professor Hu noted that no one rises to the top of the Chinese political system as President Hu has done--especially spending ten years at the center as the heir apparent with his predecessor, Jiang Zemin, constantly gunning for him--without great skill. Professor Hu opined that President Hu has always been a much better politician than Jiang. ¶10. (C) President Hu is a man of few words, an effective compromiser when appropriate, but not afraid to "rule with an iron fist" when needed, Professor Hu continued. In that sense, President Hu strongly resembles Russia's President Vladimir Putin. For instance, the arrest of former Shanghai Party Secretary Chen Liangyu caught everyone by surprise. Professor SIPDIS Hu said he might have predicted that Chen would have been transferred out of Shanghai or moved into a sinecure position but never would have guessed at how quickly President Hu moved against Chen. For further evidence of Hu's "iron will," Professor Hu pointed to his brutal crackdown against demonstrators in Tibet in the late 1980s--a move that proved to Deng Xiaoping that Hu was capable enough to lead the party. Hu had purposefully kept his intentions, ambitions, and strategies close to himself during his first decade on the PBSC and played the role of respectful subordinate. However, Professor Hu believes that as Hu grows in power and influence--particularly after October's Party Congress when he will likely secure posts for his supporters--the more Hu will show his "iron" side. -------------- Scientifically Including Harmony -------------- ¶11. (C) Professor Hu noted that based on press reports, it is all but certain that President Hu's "Scientific Development Concept" will be written in the Party Constitution. President Hu's "Harmonious Society" formulation--the formulation President Hu initially favored--would also be written in, albeit in a more subservient role. The "Scientific Development Concept" is easier for party ideologues to accept. Some feel that the concept of "harmony" is too much at odds with the Marxist-Leninist tradition and requires too many mental hoops to jump through in order to square the ideological circle. Moreover, many wealthy Chinese are opposed to the formulation as well since they believe that achieving "harmony" would mean a greater focus on wealth redistribution.JARRETT