SHANGHAI PARTY SECRETARY YU ZHENGSHENG'S PRAGMATIC

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000297

SIPDIS

DEPT FOR EAP/CM AND INR

E.O. 12958: DECL: 8/1/2033
TAGS: PGOV PINR ECON CH
SUBJECT: SHANGHAI PARTY SECRETARY YU ZHENGSHENG'S PRAGMATIC
LEADERSHIP

REF: A) SHANGHAI 19; B) SHANGHAI 18

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




1. (C) Summary: Eight months after taking over the leadership
in Shanghai, Consulate contacts praise Party Secretary Yu
Zhengsheng as being fair-minded and pragmatic. He may not be a
charismatic leader, but he is able to strike a balance between
Beijing and Shanghai's interests. As a practical matter, this
is helpful as he still lacks the political clout to dominate the
Shanghai Bureaucracy and he certainly does not want to challenge
Beijing on any core issues. As for Shanghai Mayor Han Zheng,
our contacts believe he will remain in place to maintain some
stability in Shanghai's leadership. However, trials in
connection with Shanghai's pension scandal continue. End
Summary.


So Far So Good
--------------

2. (C) In various meetings with Congenoffs, a range of local
contacts have provided positive assessments of Shanghai Party
Secretary Yu Zhengsheng. During a July 17 dinner, Shanghai CIQ
officials described Yu as someone who can make decisions with an
interesting and well-connected background, and popular with
Shanghai citizens. They found him to be straightforward and
pragmatic. Fudan University Center for American Studies
academics had similar views of Yu during a dinner on July 18.
They characterized Yu as down-to-earth and possessed an inner
strength. Yu has distinguished himself from past Shanghai
leaders by being more attentive during meetings and forcing
advisors to put down their prepared texts and answer questions.
Yu also seems to pay more attention to the problems of Shanghai
citizens and has visited poorer sections of Shanghai. In a
meeting on July 28, Shanghai Municipal Peoples Congress (MPC)
researcher Zhou Meiyan in a meeting also praised Yu for his
efforts to learn about conditions for ordinary people. Yu once
refused to take an official car to a function and insisted on
riding the subway with his wife instead. Having ridden the
subway, Yu called on officials to make improvements.



3. (C) Zhou believes that it is too early to tell whether Yu
truly supports reforms. She senses that there have been some
improvements in the media. For example, there was a great deal
of information about the July 1 knife attack of a police station
in the media and on the Internet. In addition, the Pudong
District Government is fostering an open government and has
published many regulations on the Internet. While it is not
clear whether Yu is directly responsible for this more open
atmosphere, the government has become more open after Yu's
arrival, said Zhou. Zhou bases some of her hopes on Yu's
actions when he was Hubei Party Secretary. Under Yu, the Hubei
government published its budget on the Internet. She has been
pushing for the Shanghai government to also publish its budget,
but these efforts have stalled as there is much opposition
within the governmental bureaucracy. She believes that Yu
supports publishing the budget, but does not yet have the
political influence to overcome this opposition.


Keeping Shanghai In Line
--------------

4. (C) During a lunch on July 24, Tongji Professor Frank Peng
relayed a somewhat less positive view of Yu. Peng criticized Yu
for lacking charisma. In addition, he felt that Yu lacks his
own policies and simply follows Beijing's lead. Beijing's goals
for Shanghai are for the city to 1) obey the Central Government
and 2) develop its four "centers" (international economic,
financial, trade and logistics) in support of the country's
development.


Yangtze River Delta Integration
--------------

5. (C) Another of Beijing's chief goal is to improve Yangtze
River Delta (YRD) integration. The YRD region consists of
Shanghai, Jiangsu and Zhejiang. Although this region only
accounts for 2 percent of the land and 10 percent of the
population, it generates 24 percent of China's GDP. Peng
predicted that the transportation systems and social systems of

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the cities in this region will be fully integrated in the near
future. There will be trains departing every few minutes from
Shanghai for Hangzhou and other major cities in the region.
Citizens will be able to use the same transportation cards and
medical insurance cards throughout the region. According to
Peng, Chen Liangyu's downfall was due in part by his refusal to
support YRD integration. Chen believed that he would not be
able to control the YRD region. On the other hand, Xi Jinping
was very active in pushing for YRD integration during his brief
tenure as Shanghai Party Secretary. Peng believes that Yu
supports YRD integration, but did not give any concrete examples.


Maglev vs. High-Speed Rail
--------------


6. (C) According to Peng, Yu does not have the inclination, nor
the power to oppose Beijing's policies. For example, Shanghai
has for a long time championed the establishment of Magnetic
Levitation (Maglev) lines to connect Shanghai to nearby cities.
(See reftels.) Former Premier and Shanghai Mayor Zhu Rongji was
a big supporter of the Maglev which has German technology,
because of his close ties to German Chancellor Gerhard
Schroeder. The Railway Ministry in Beijing, however, supports
a "wheel and rail" system and is promoting high-speed railways.
Peng cited the recent announcements that Shanghai will build
high-speed rail lines from Shanghai to Hangzhou and Shanghai to
Nanjing as an indication that Yu is siding with the Central
government and abandoning the Maglev. (Note: Officially, the
Shanghai government's plans to extend the Maglev to Hangzhou
have only been suspended. The suspension came after large scale
protests broke out against the Maglev from residents who felt
that the extensions would decrease their property value and harm
their health. However, popular opposition alone probably should
not be enough to derail the project. End Note.) Peng added
that even if Yu wanted to oppose the decision, he did not have
the political clout to ignore Beijing.

Keeping a Balance
--------------


7. (C) Peng noted, however, that past Shanghai leaders were
perhaps too strongly in favor of Shanghai. It is important for
Shanghai's Party Secretary to maintain a balance between Beijing
and Shanghai, something that Yu has succeeded so far in doing.
Shanghai still has a bright future. As host of the 2010 World
Expo, the Shanghai government is focusing its efforts in three
areas. First, the city is trying to improve cultural and moral
standards by urging citizens to act civilly. Second, it is
taking steps to improve Shanghai's infrastructure. Third, it is
implementing more measures to improve the government's
transparency and openness. Among other things, the city knows
that foreigners care about openness and transparency and is
taking steps in this area to improve its international image.
All of these measures will improve life in Shanghai.

Yu's Last Stop?
--------------


8. (C) Given Yu's age of 63, both Peng and Zhou expect that Yu
will finish his career in Shanghai. He will be too old to take
on another position at the end of his five years in Shanghai as
Party Secretary. Zhou added that it might be beneficial for a
leader not to have aspirations for higher offices. Yu will not
be constrained by ambition and can act more in the interests of
the city.

Han Zheng is Lucky
--------------


9. (C) Peng and Zhou also believe that Mayor Han Zheng will
remain in place. According to Zhou, Beijing does not want to
create more instability in the Shanghai leadership by making
wide-scale changes. Peng said that Han knows that he is lucky
to retain his position and that he continues to be vulnerable
because of the scandal. Low-level investigations into the
Shanghai pension scandal continue. Notably, Huang Ju's former
secretary Wang Weigong is still under investigation, which could
have implications for Han.


Comment
--------------

10. (C) After the turmoil caused by the 2006 Shanghai Pension

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Scandal, Yu appears to have brought some stability to Shanghai.
As noted by contacts, having a leader who is in line with
Beijing is not necessarily a bad thing for Shanghai. In this
view, Beijing is not trying to limit Shanghai's development but
wants to ensure that this development benefits the whole country
and does not run counter to the Center's economic goals.
Shanghai may be at the head of the train and do much of the
heavy pulling, but it will not set the direction.
JARRETT