CONSUL GENERAL'S FAREWELL CALLS ON SHANGHAI LEADERS

C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000328

SIPDIS

DEPT FOR EAP/CM AND INR

E.O. 12958: DECL: 8/14/2033
TAGS: PGOV PINR PREL CH ECON
SUBJECT: CONSUL GENERAL'S FAREWELL CALLS ON SHANGHAI LEADERS

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

1. (SBU) Summary: On August 14, the Consul General paid separate
farewell calls on Shanghai Mayor Han Zheng, Shanghai Municipal
People's Congress (MPC) Chairman Liu Yungeng and Chinese
People's Political Consultative Conference (CPPCC) Shanghai
Committee Chairman Feng Guoqin. Mayor Han noted the importance
of the 2010 Shanghai World Expo and expressed his appreciation
for the U.S. business community's contributions to Shanghai's
development. Shanghai MPC Chairman Liu Yungeng emphasized the
importance of listening to the people and the need to improve
Shanghai's laws. CPPCC Chairman Feng expressed his appreciation
for the United States' efforts to improve relations with China.
He also voiced concern about the social problems Shanghai faces
as a result of rapid economic development. End Summary.

Mayor Han: Shanghai Prepares for the 2010 World Expo
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2. (SBU) In a farewell call by the CG, Mayor Han spoke
positively about Shanghai's relationship with the United States.
He thanked the Consul General for his efforts to bolster the
relationship. Mayor Han particularly enjoyed attending the
annual American Chamber of Commerce Government Appreciation
Dinner. He will not be able to attend the dinner this year
because of his commitment to attend the 2008 World Expo in
Zaragoza, Spain. Since Shanghai will be hosting the 2010 World
Expo, Mayor Han must lead a delegation to this year's World Expo
before it concludes in mid-September. He originally had planned
to visit the World Expo earlier in the summer but could not
travel then because of the May earthquake in Sichuan.


3. (SBU) Mayor Han emphasized the importance of the World Expo
to Shanghai and China and was confident that Shanghai would
organize a good exhibition. Shanghai will likely receive even
more than the projected 70 million visitors. Although Shanghai
does not have enough hotel rooms, there are many hotels in
nearby cities such as Suzhou, Hangzhou, and Wuxi. Because of the
improvements in the highways and railways, as well as the new
Hangzhou Bay Bridge, it is now easier and faster to get to
Shanghai from these cities. The Mayor expressed confidence that
the U.S. national pavilion would be a highlight of the Expo. The
CG said the United States had the same hope. The fundraising
effort was in full swing but the work was challenging. The
Consulate wants to work closely with the Shanghai government on
the U.S. national pavilion effort and welcomed their continued
support. The Mayor asked about some specific U.S. companies and
their interest in the World Expo.

SMPC: Focusing On the People
--------------


4. (SBU) In his meeting with the CG, Shanghai MPC Chairman Liu
Yungeng said that the organization is focused on improving
Shanghai citizens' quality of life. For example, that afternoon,
he would visit a factory in the Baoshan district to meet with
people at the grassroots level and learn more about their
concerns. He confirmed that Shanghai MPC holds public hearings
on draft legislation. Shanghai's laws are not perfect; more
needs to be done to improve the laws in areas such as finance.


5. (SBU) Liu described the Shanghai MPC's four responsibilities.
First, it drafts local laws and regulations. Second, it
supervises the work of the municipal government. Third, it
provides ideological direction to the government. Fourth, it
oversees the process through which governmental leaders are
appointed. The Shanghai MPC uses a "voting system" to select its
own standing committee. Leaders must obtain enough votes to be
elected to membership. (Note: This system is used by many local
governments. The party submits a list of names in excess of the
number of available positions, and those names that do not
receive enough support are not appointed. End Note.


6. (SBU) According to Liu, the Shanghai MPC has three current
priorities. First, draft laws to support Shanghai's economic
development. Second, draft laws that improve the people's living
conditions in Shanghai. This includes improving infrastructure
and public security. To achieve this goal, the Shanghai MPC has
visited other cities in the United States, South Korea, and
Japan to study foreign "best practices" and seek ideas on how to
improve Shanghai's local regulations. Finally, the Shanghai MPC
is working to improve the rule of law, in both the economic and
political sphere.

CPPCC's Feng on Bilateral Relations and Social Issues
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7. (SBU) CPPCC Shanghai Committee Chairman Feng Guoqin expressed
his appreciation for the USG's efforts to improve U.S.-China
relations, specifically highlighting President Bush's visit to
Beijing for the Olympics. Feng told the CG that he was pleased
that his August 14 meeting with the CG was his first official
meeting with a Shanghai-based Consul General since he assumed
office in early 2008. Committee Chairman Feng thanked the CG for
the Consulate General's work to improve relations with city
officials during the past three years.


8. (C) Feng voiced concerns that Shanghai's rapid economic
development has created new problems for the city in terms of
social issues. Municipal leaders would need to "change the
management model" in order to address issues such as poor
insurance coverage for workers and registration difficulties
(under the "hukou" system) for migrant workers. Fixing the
problems will require an "ideological transformation," Feng
said. He also expressed concern that the pace of financial
reforms is moving too slowly to meet the demands of Shanghai's
rapid development.

Bio Note: Liu Yungeng
--------------


9. (C) We have not met with Liu before. He is very much an "old
school" cadre. Born in 1947 in Zhoushan, Zhejiang Province, he
began his career during the Cultural Revolution. He has spent
most of his career within the Shanghai bureaucracy, including
the Public Security apparatus. His big break seems to have been
when he was appointed as the Deputy Secretary General of the
Shanghai MPC CPC Committee when (recently deceased and former
Standing Committee Member) Huang Ju was Shanghai's leader. He
continued to work in the "public security" or "law and order"
system (zhengfa xitong). Because of his background, he likely
had strong ties to many members of the traditional Shanghai
power structure led until 2006 by now disgraced and imprisoned
Party Secretary Chen Liangyu. However, Liu has avoided
involvement in the recent scandals. In this meeting, he conveyed
interest in promoting a more populist approach to governance.
JARRETT