SHANGHAI GOVERNMENT RESTRUCTURING FOLLOWS CENTRAL GOVERNMENT

UNCLAS SECTION 01 OF 03 SHANGHAI 000477

SENSITIVE
SIPDIS

TREASURY FOR OASIA/INA/CUSHMAN AND WINSHIP
DEPT FOR EAP/CM, INR/B
USDOC PASS BUREAU OF ECONOMIC ANALYSIS
USDOC FOR ITA DAS KASOFF, MELCHER, OCEA
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NSC FOR LOI
EMBASSY BEIJING FOR HHS/FDA

E.O. 12958: N/A
TAGS: ECON PGOV ETRD EINV EAGR SENV CH
SUBJECT: SHANGHAI GOVERNMENT RESTRUCTURING FOLLOWS CENTRAL GOVERNMENT
INITIATIVE

REF: BEIJING 1012

(U) This cable is sensitive but unclassified and for official
use only. Not for distribution outside of USG channels or via
the internet.

Summary
--------------


1. (SBU) The CPC Central Committee and the State Council
recently approved Shanghai's plan on restructuring municipal
government agencies. The restructuring is in line with the
Central Government's administrative reorganization in March 2008
at the National People's Congress, which also was known as the
"Super Ministries" reform (reftel). In Shanghai, 27 previous
municipal government entities were consolidated into 11
commissions, bureaus and administrations all of which report
directly to one Central Government umbrella ministry or
commission. The goals of the reform are to increase efficiency,
establish clearer regulations and guidelines, and improve
accountability. End Summary.

Details of the Restructuring
--------------


2. (U) The new Shanghai Municipal Government organizations are
the: Economic and Informatization Commission, Commerce
Commission, Bureau of Human Resources and Social Security,
Public Health Bureau, Urban Rural Development and Transport
Commission, Urban Communications and Harbor Administration,
Housing Security and House Administration Bureau, Planning and
Land Resources Bureau, Afforestation and City Appearance
Administration, Supervisory Bureau, and Tourism Bureau. Each
organization now reports directly to one Central Government
ministry instead of multiple ministries.


3. (U) Municipal government organizations unchanged by the
restructuring are the: Development and Reform Commission,
Finance Bureau, Administration of Taxation, Auditing Bureau,
Statistics Bureau, Financial Service Office, Foreign Affairs
Office, Ethics and Religious Affairs Commission, Office of
Overseas Chinese Affairs, Administration of Industry and
Commerce, Bureau of Quality and Technical Inspection,
Agriculture Commission, Bureau of Civil Affairs, Bureau of
Justice, State-owned Assets Supervision and Administration
Commission, Safe Production Supervision Administration, Civil
Defense Office, Education Commission, Science and Technology
Commission, Culture, Radio Broadcasting, Film and Television
Administration, Press and Publication Bureau, Population and
Family Planning Commission, Physical Culture Bureau,
Intellectual Property Rights Bureau, and the 2010 Shanghai World
Expo.


4. (U) According to the flow chart released by the municipal
government, Shanghai's eight vice mayors -- Yang Xiong
(Executive Vice Mayor),Tu Guangshao, Tang Dengjie, Hu Yanzhao,
Ai Baojun, Shen Jun, Shen Xiaoming, and Zhao Wen -- divide the
responsibility for the new government structure, which now
totals 37 commissions, bureaus, and administrations. Tang
Dengjie retains the Foreign Affairs portfolio and adds the new
Commerce Commission; Tu Guangshao (formerly Vice Chairman of the
China Securities Regulatory Commission) retains the finance
portfolios; and Shen Jun will handle the bulk of the
restructuring as he supervises six new organizations under his
environment portfolio.

Environmental Concerns
--------------


5. (SBU) As at the Central Government level, much of Shanghai's
restructuring focused on environmental, food safety, and
economic concerns. The reform elevated the status of the
Shanghai Environmental Protection Bureau (SEPB) parallel to the

SHANGHAI 00000477 002 OF 003


creation of the Ministry of Environmental Protection (MEP),
which replaced the State Environmental Protection Administration
(SEPA) in the Central Government. SEPB Foreign Affairs Office
Director Wu Chenjian told Congenoff the new bureau would add
more departments and staff in line with its higher status and
will participate in more decisions on Shanghai's overall
development. (Bio Note: Wu said he plans to retire after SEPB
completes its restructuring. End Bio Note.)


6. (SBU) Shanghai did not, however, create a local energy
organization parallel to the creation of the Central
Government's National Energy Administration under the National
Development and Reform Commission. Contacts have told
Congenoffs that municipal government leaders made the decision
to not create a separate energy entity because Shanghai is not
an energy producer.

Addressing Food Safety
--------------


7. (SBU) Under the reorganization, the Shanghai Food and Drug
Administration (SFDA) will move under the umbrella of the
Shanghai Public Health Bureau. This mirrors actions of the
Central Government earlier this year and will hopefully result
in clearer regulations and guidelines. SFDA's director, Wang
Longxing, has been announced as the Party Secretary of the
restructured Public Health Bureau. Shanghai contacts hope the
new bureau will more effectively tackle product safety issues,
as China's recent food and drug safety scandals have been
partially attributed to inconsistent regulations and enforcement.

Adjusting to Economic Realities
--------------


8. (SBU) Recognizing economic pressures that are bringing
together trade and investment issues, the government
restructuring created the Shanghai Commerce Commission, which
merged the duties of the former Shanghai Foreign Economic
Relations and Trade Commission (SMERT),Shanghai Foreign
Investment Commission, the Shanghai Economic Commission's
responsibilities on domestic trade administration, and the
Shanghai Grain Bureau. The Commerce Commission's first Director
will be Sha Hailin, who has strong ties to the United States,
having been Minister Counselor for Bilateral and Congressional
Affairs at the Chinese Embassy in Washington from 2001 to 2002,
as well as a visiting scholar at Georgia Tech in Atlanta.

Bio Note: Sha Hailin
--------------


9. (SBU) Sha Hailin was appointed Director of the Shanghai
Commerce Commission by the Shanghai Municipal People's Congress
(SMPC),according to a SMPC personnel appointment announcement
on October 23. Sha was born in June 1957 in Shanghai. He
graduated from Shanghai Normal University and Shanghai Tongji
University with a Master's degree in engineering and a Ph.D. in
management. He was a visiting scholar at Georgia Institute of
Technology in the United States and an intern with the U.S.
firm, United Technologies Companies (UTC),with responsibility
for strategic research.


10. (SBU) Sha's previous posts include Vice Principal of
Shanghai Wusong Middle School, Deputy Director of the Communist
Youth League Shanghai Party Committee, President of Shanghai
College for Youth Administrators, President of Shanghai Youth
Federation, Party Secretary of Shanghai Baoshan District Yuepu
Town and Party Secretary of Shanghai Pudong New Area Rural Work
Committee. When Sha worked at the CPC Shanghai Pudong Standing
Committee, he served as standing member, Director of Department
of Organization, Director of the Human Resource Bureau and
Office Director of the Organizational Personnel Committee.


SHANGHAI 00000477 003 OF 003



11. (SBU) Sha passed the first public selection of senior
diplomat test organized by the Chinese Ministry of Foreign
Affairs and was appointed Minister Counselor at the Chinese
Embassy in Washington, D.C. in charge of the Division of
Bilateral and Congressional Affairs; he served there from March
2001 to August 2002. From August 2002 to November 2005, he
served as Ambassador Extraordinary and Plenipotentiary of the
People's Republic of China to Ireland. He then returned to
Shanghai and served as Vice Magistrate, Acting Magistrate,
Deputy Party Secretary and Party Secretary of CPC Shanghai Luwan
Standing Committee and Deputy Secretary General of Shanghai
Luwan District Government. In recent months, he was in charge
of the Shanghai Municipal Government's reconstruction projects
in earthquake-affected areas in Dujiangyan, Sichuan Province.
CAMP