Identifier
Created
Classification
Origin
08SHANGHAI20
2008-01-16 09:11:00
CONFIDENTIAL
Consulate Shanghai
Cable title:  

TRANSPARENCY INTERNATIONAL/USA PRESIDENT BOSWELL'S LUNCH

Tags:  PGOV KJUS SOCI ETRD KPAO CH 
pdf how-to read a cable
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FM AMCONSUL SHANGHAI
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INFO RUEHBJ/AMEMBASSY BEIJING 1647
RUEHSH/AMCONSUL SHENYANG 1062
RUEHCN/AMCONSUL CHENGDU 1061
RUEHGZ/AMCONSUL GUANGZHOU 1032
RUEHHK/AMCONSUL HONG KONG 1189
RUEHIN/AIT TAIPEI 0872
RHEHAAA/NSC WASHINGTON DC
RUCPDOC/USDOC WASHDC 0197
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7139
C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000020 

SIPDIS

SIPDIS

DEPT FOR EAP/CM
STATE PASS USTR FOR STRATFORD, WINTER, WINELAND, READE
TREASURY FOR AMB. HOLMER, WRIGHT, TSMITH
TREASURY FOR OASI - DOHNER, HAARSAGER, CUSHMAN
COMMERCE FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN
NSC FOR WILDER AND TONG

E.O. 12958: DECL: 1/16/2033
TAGS: PGOV KJUS SOCI ETRD KPAO CH
SUBJECT: TRANSPARENCY INTERNATIONAL/USA PRESIDENT BOSWELL'S LUNCH
WITH SHANGHAI CONTACTS

REF: A) Shanghai 18; B) Shanghai 19

CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate
General, Shanghai, China, Department of State.
REASON: 1.4 (b),(d)
C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000020

SIPDIS

SIPDIS

DEPT FOR EAP/CM
STATE PASS USTR FOR STRATFORD, WINTER, WINELAND, READE
TREASURY FOR AMB. HOLMER, WRIGHT, TSMITH
TREASURY FOR OASI - DOHNER, HAARSAGER, CUSHMAN
COMMERCE FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN
NSC FOR WILDER AND TONG

E.O. 12958: DECL: 1/16/2033
TAGS: PGOV KJUS SOCI ETRD KPAO CH
SUBJECT: TRANSPARENCY INTERNATIONAL/USA PRESIDENT BOSWELL'S LUNCH
WITH SHANGHAI CONTACTS

REF: A) Shanghai 18; B) Shanghai 19

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

1. (C) Summary: During a January 15 lunch, Transparency
International/USA President and CEO Nancy Boswell engaged
representatives of the Shanghai Municipal People's Congress
(SMPC) and an academic specializing in NGO development on ways
of improving transparency in the budget process, organizing
public hearings, and protecting journalists. Interlocutors
complained that there are no clear guidelines on how government
budgets are administered and leaders have great "flexibility" in
allocating funds. There are also no clear guidelines on the
protection of journalists and the government continues to
control the media. Our guests downplayed government initiatives
at holding public hearings, saying the results are usually
pre-cooked and the hearings aren't well attended. They all
welcomed further communication and cooperation from Transparency
International on these issues. End Summary.


2. (U) Consul General hosted a lunch in honor of Transparency
International/USA and CEO President Nancy Boswell on January 15.
At the lunch were Shanghai Municipal People's Congress (SMPC)
Legislative Research Laboratory Secretary General Liu Xiaoming,
SMPC Training Committee Researcher Zhou Meiyan, and Jiaotong
University School of International and Public Affairs Dean Hu
Wei. Poloff and Cultural Affairs Officer also attended the
lunch. Ms. Boswell was in Shanghai as a Public Affairs
Section-supported Voluntary Speaker, following her participation
in a Yale-in-China legal conference at Beijing University.

Government Budgets

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


3. (C) Zhou noted the recent passage of the China Open

Government Information Act (OGIA) and said that although the law
has yet to take effect, it should lead to some positive changes.
Last year a Shanghai citizen sued the government under the
Shanghai Municipal Open Government Information regulations.
Such cases are very important in fighting corruption and she
hoped that the national level OGIA will lead to even more cases.


4. (C) Zhou said one focus of the Shanghai MPC is to increase
transparency in the local government's budget process.
Currently, it is very difficult to get clear information on
Shanghai's budget. Only one district, Xuhui district, openly
provides detailed information on its budget. Shanghai MPC
delegates are supposed to monitor the budget, but this is an
impossible task. First, delegates meet only a few days each
year. Second, only a small amount of the 800 Shanghai MPC
delegates have any understanding of accounting and budget
issues. There are two committees (the Standing Committee and
the Finance Committee) that meet regularly during the year.
But, it is too difficult for these committees to fully monitor
the budget given limited staffing.


5. (C) Jiaotong Professor Hu Wei added that the real problem is
that there are no clear guidelines and regulations on how to
develop and administer a budget in China. Leaders have "great
flexibility" on how to allocate funds. While there might be
debates about how to spend 50,000 RMB, a head of an institution
can easily allocate 1 million RMB without discussing the issue
with anyone. Hu, Zhou and Liu urged that Transparency
International provide more assistance in this area. Liu noted
it would be particularly helpful if Transparency International
could provide information on how other countries administer
their budgets. Boswell noted that international organizations
such as the IMF and World Bank have best practices on budgets.
In addition, the IMF has the responsibility to work with
governments on budget issues. She agreed to raise the issue
with the IMF when she meets with them in the near future.

Public Hearings

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


6. (C) Zhou and Hu downplayed the effectiveness of Shanghai
Municipal Government-organized public hearings on increasing

SHANGHAI 00000020 002 OF 002


transparency. According to Hu, there are no clear guidelines on
when or how hearings should be conducted and recent hearings
have experienced many problems. First, the government rarely
holds hearings on major infrastructure projects such as the
extension of the Maglev in Shanghai. (See reftels A and B for
more information on the Maglev controversy.) Rather when
hearings occur, they tend to be on proposal that affect people
such as public transportation issues. Second, hearing
organizers often hand-pick participants for the hearing,
allowing them to control the outcome. The organizers are also a
direct party to the hearing subject, which presents a clear
conflict of interest. This leads to a situation where hearing
organizers are just listening to themselves and not getting
different opinions. Zhou added that it is not clear where
opinions collected at hearings go. She urged that the
government publish results of the hearings.


7. (C) Liu, who helps organize hearings for the Shanghai MPC,
assured Boswell that the Shanghai government had good
intentions. The government really wants to hear a variety of
voices. However, based on her experience only a limited number
of people are interested in attending hearings. These people
are usually retired and not representative of the general
population. In addition, most ordinary citizens are only
interested in topics that affect their daily lives and do not
want to attend hearings on every issue. Hu countered that most
ordinary citizens feel no real connection to the law. It is
important to build this connection to increase public
participation.

The Media's Role

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


8. (C) Our guests all agreed that the media played an important
role in fighting corruption. Liu said, however, there are no
clear provisions in Chinese law protecting journalists. Zhou
noted that there are few independent voices in the media and
observed that the media is completely controlled by the Chinese
government. The Chinese Government still has reservations about
freedom of the press because the media plays such a major role
in shaping popular opinion. Chinese people generally believe
everything that is reported in the media, even if the
information is false.


9. (C) Zhou said she gets much of her information from the
Internet. She uses proxy servers to get around government
restrictions. However, these proxies are only effective for a
few days and some for a few hours. There are "Internet police"
monitoring how people use the computers and they are actively
bringing down sites. She believed that the USG should restrict
the sale of computer software to China that help the government
monitor the Internet.

Social Responsibility Is For Everyone

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


10. (C) Zhou, Hu, and Liu supported more discussions about
Corporate Social Responsibility (CSR). Hu said that since the
Chinese Government has a "long arm" in society, it bears some
responsibility to promote CSR. Liu added that government
departments also have social responsibilities and should be
active in this area. She suggested government authorities find
ways to promote social responsibility in connection with the
2010 Shanghai World Expo, which will attract 70 million visitors.
JARRETT