PBSC UNRESOLVED; HU FLEXING HIS POLITICAL MUSCLES

S E C R E T SECTION 01 OF 02 SHANGHAI 000641

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E.O. 12958: DECL: X1 MANUAL REVIEW
TAGS: PGOV PINR ECON SOCI CH
SUBJECT: PBSC UNRESOLVED; HU FLEXING HIS POLITICAL MUSCLES

REF: SHANGHAI 662

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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

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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.

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Questions Linger About Current PBSC Leaders
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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.

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We're Moving On Up
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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

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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.

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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.

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Hu: Great Wisdom That Appears Foolish
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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

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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.

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Scientifically Including Harmony
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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