Identifier
Created
Classification
Origin
08SHANGHAI49
2008-02-01 10:01:00
CONFIDENTIAL
Consulate Shanghai
Cable title:  

SHANGHAI MAYOR HAN ZHENG GETS SECOND TERM

Tags:  PGOV PINR ECON CH 
pdf how-to read a cable
VZCZCXRO7023
RR RUEHCN RUEHGH
DE RUEHGH #0049/01 0321001
ZNY CCCCC ZZH
R 011001Z FEB 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6665
INFO RUEHBJ/AMEMBASSY BEIJING 1692
RUEHSH/AMCONSUL SHENYANG 1096
RUEHCN/AMCONSUL CHENGDU 1098
RUEHGZ/AMCONSUL GUANGZHOU 1069
RUEHHK/AMCONSUL HONG KONG 1229
RUEHIN/AIT TAIPEI 0909
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHDC 0202
RHEHAAA/NSC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7200
C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000049 

SIPDIS

SIPDIS

E.O. 12958: DECL: 2/1/2033
TAGS: PGOV PINR ECON CH
SUBJECT: SHANGHAI MAYOR HAN ZHENG GETS SECOND TERM


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



C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000049

SIPDIS

SIPDIS

E.O. 12958: DECL: 2/1/2033
TAGS: PGOV PINR ECON CH
SUBJECT: SHANGHAI MAYOR HAN ZHENG GETS SECOND TERM


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




1. (C) Summary: Despite earlier speculation that Mayor Han
Zheng would be reassigned elsewhere, he was re-elected to a
second five-year term at the end of Shanghai's Municipal
People's Congress (MPC) on January 30. Contacts are mixed as to
whether Mayor Han will complete his term. The MPC also
appointed three new vice mayors. Five out of Shanghai's eight
vice mayors are now recent appointees. Meanwhile, the reviews
on Party Secretary Yu Zhengsheng remain mixed. One contact
painted Yu as a reformer who is not afraid to criticize
governmental departments or receive criticism. Another thought
that Yu lacked the sophistication to run a city such as
Shanghai. The Shanghai MPC and the Chinese People' Political
Consultative Conference (CPPCC) meetings, which took place from
January 23-31 emphasized Shanghai's development in support of
national plans for the Yangtze River Delta. The meetings also
stressed the importance of transparency and vowed that the
government would take measures to fight corruption. Shanghai's
handling of the opposition to the extension of the Magnetic
Levitation (Maglev) train will be an important test case. End
Summary.

--------------
Mayor Han Zheng: Five More Years?
--------------


2. (C) Contrary to speculation that Mayor Han Zheng would be
moved out of Shanghai, he received another 5-year term on
January 30. During a discussion with Poloff on January 30,
Carlyle Group's Yi Luo asserted that Han Zheng was retained as
Mayor to provide continuity, since Party Secretary Yu Zhengsheng
is still new to the Shanghai context and will need time to get
up to speed. Luo suggested that Yu probably saw working with
Han as necessary at least for now. Luo doubts that Han will
move on to a position of any political significance once he
leaves his current post. Tongji University Professor Frank
Peng, in a separate discussion on January 28, also expects that
Han will not serve a full five-year term. In a reminder that

doubts about Han Zheng's role in the pension scandal still
linger, Luo said the Party most likely has some incriminating
information about Han but would have "lost too much face" if
both Party Secretary Chen Liangyu and Mayor Han had been removed
for the same scandal. Han Zheng, however, does have his
admirers. Shanghai MPC researcher Zhou Meiyan told us February 1
that Han will stay on, saying that Han and Yu get along well.
She added that during a recent meeting, Mayor Han was very
relaxed and spoke passionately and spontaneously. She took this
as a sign that he is no longer worried about his future and
would serve the full five years in Shanghai.

--------------
New Vice Mayors Named
--------------


3. (C) Some speculate that Han Zheng may also be staying to
smooth the transition at the vice-mayoral level. Five of eight
vice mayors have been appointed since December 2007, three of
them on January 30. According to Shanghai MPC Standing
Committee Member Wang Guangchang in a conversation with the
Consul General on January 29, the major turnover reflects the
need to comply with central directives about the composition of
vice mayors. Beijing has instructed that vice mayors be
younger, have functional expertise, include a woman and a
non-CPC representative, and be limited to two terms. Zhou also
described the significant turnover in vice mayors as the result
of these requirements.


4. (C) Yang Xiong, Tang Dengjie, and Hu Yanzhao will continue
as vice mayors. Yang Xiong will become the new Executive Vice
Mayor. The three new vice mayors newly are Shen Xiaoming, Shen
Jun, and Zhao Wen. Shen Xiaoming was the Shanghai Education
Commission Director; Shen Jun was the Shanghai MPC Deputy
Secretary General; and Zhao Wen is a member of the non-CPC Jiu

SIPDIS
San Society Shanghai branch. Zhou said that the choice of Zhao
Wen was a surprise and that no one was sure why Yang Dinghua,
who was appointed vice mayor in 2006, was replaced. Ai Baojun
and Tu Guangshao, who were appointed vice mayors in December
2007, were re-elected at the MPC. Both bring significant
experience in business to the roster. Ai comes from the

SHANGHAI 00000049 002 OF 004


Baosteel Shanghai office, while Tu is a former chairman of the
Shanghai Stock Exchange. Zhou asserted that Ai and Tu are
viewed as being sent from Beijing, since Baosteel is a
centrally-owned enterprise and Tu most recently served as
vice-chairman of the China Securities Regulatory Commission in
Beijing.

--------------
Yu Zhengsheng: Initial Impressions Mixed
--------------


5. (C) Zhang Renren of Weyerhauser told Poloff on January 28
that he was "not impressed" with Yu and was concerned about his
handling of the protests against the Maglev. Carlyle's Luo
observed that Yu has not left much of an impression even after
three months. Yu has had little visible impact so far, said Luo.
He believes Yu is treading carefully while getting the lay of
the land in Shanghai, trying not to antagonize members of the
Shanghai political establishment. Citing the son of an official
in Beijing, Luo said that he doesn't expect anything significant
from Yu for at least 12-18 months.


6. (C) Zhou was much more positive about Yu and said "many
people" like him, particularly his willingness to criticize
departments within the Shanghai government. For example, Zhou
says Yu recently criticized an unspecified government agency for
not being transparent in its operation. Zhou suggested that Yu
would bring about more transparency to the Shanghai government.
She noted that, upon his arrival, Yu was surprised at the lack
of transparency in Shanghai's budget. During Yu's tenure in
Hubei, according to Zhou, he ensured that information about the
government's budget was made available online.


7. (C) Zhang said that even if Beijing is hopeful that Yu can
break the Shanghai gang, Shanghai is a "complex and important
place" and that outsiders (alluding to Yu) lack the
"sophistication" to run a city like Shanghai.

--------------
The Maglev
--------------


8. (C) Many contacts see the Maglev protests as an important
"test" case for the Shanghai Government. Luo affirmed that the
government is indeed keeping tabs on public opinion and taking
it into account, for better or for worse. On the thorny issue
of the Maglev expansion, however, Luo and Zhang Renren of
Weyerhauser both asserted that the Shanghai Municipal Government
will likely proceed with the project to Hongqiao airport despite
public opposition, though it may be more cautious in moving
forward. Zhang interpreted Yu Zhengsheng's statement on the
early January protests to mean the government will wait out the
protests but not change its policy. Zhang described the
government's promises to listen carefully to suggestions as just
"window dressing."


9. (C) According to Postal Bureau's Wang Guangchang, the Maglev
issue was the subject of much discussion during the MPC, and no
final decision has been made. At a press conference following
the close of the MPC, Han Zheng told media on January 31 that
the city plans to provide another opportunity for public input
on the Maglev project. Zhou Meiyan is optimistic that the
government will take the public's views seriously and said that
if it did not make any changes there would be negative
consequences.

-------------- --------------
People's Congress Meeting: Emphasis on Central Government
Initiatives
-------------- --------------


10. (C) Indicating an effort to portray alignment with Beijing,
the "two sessions" of the Shanghai MPC and the Shanghai CPPCC
gave prominence to a number of central policies and initiatives,
including the "scientific development concept" and "good and
fast development." Han Zheng's Government Work Report at the
first session of the MPC emphasized the central leadership's
"Four Leads" vision for Shanghai, in which the city is exhorted
to "take the lead" in transforming its economic growth mode,
enhance independent innovation, advance reform and opening-up,
and build a "socialist harmonious society." In line with this
vision, the Government Work Report promised "clear results" in
creating a conservation-oriented, environmentally friendly city
as one of the government's key tasks for the next five years.

SHANGHAI 00000049 003 OF 004


According to Zhou Meiyan, Han Zheng gave an unusual
"supplemental" speech the day following the Government Work
Report, the content of which mainly focused on environmental
issues.

--------------
Shanghai's Future as Economic Pacesetter
--------------


11. (U) "Independent innovation" was a central theme of the
Report and media reporting on the two sessions. As its first
key task, the Government Work Report calls for laying the
groundwork for Shanghai to become an international economic,
financial, trade, and shipping center (the "Four Centers") by

2020. The Government Work Report emphasizes planning Shanghai's
development in the context of national plans for the Yangtze
River Delta, as well as the need for Shanghai to serve China as
a whole. Han Zheng cited a modest GDP growth rate target of
10%, another sign of deference to central government policies.
The English language Shanghai Daily on January 26 quoted Party
Secretary Yu Zhengsheng as telling the CPPCC that "every

SIPDIS
decision we make should take a nationwide perspective, even if
the choice might push Shanghai to the edge of economic loss."
Yu urged the city to "be willing to take risks" in areas such as
high-tech research and development for the sake of the "whole of
China."

-------------- --------------
Transparency Push in Wake of Chen Liangyu Scandal
-------------- --------------


12. (U) The Government Work Report noted that the social
security fund scandal involving former Party Secretary Chen
Liangyu (whose name was explicitly mentioned) caused "enormous
damage" and left Shanghai with "grave lessons to ponder." The
scandal "projected a very negative image of Shanghai's efforts
for reform and development" and "exposed weaknesses, flaws, and
loopholes" in Shanghai's "systems of governance and
supervision."


13. (C) Drawing lessons from the scandal, the Government Work
Report promised efforts to improve transparency, particularly in
management of public finances. Shanghai will make information
about its budget available in the form of annual reports and
will publish government procurement lists. The city will also
introduce third-party evaluation of government spending, in
addition to review of departmental budgets and proceeds from
land leases by the Municipal People's Congress. The Report also
promises "enhanced oversight" of social security fund management
and "more rigorous auditing" and publication of audit results of
key projects. Although last year's Work Report touched on these
issues, this year's provided more details on Shanghai's efforts.
In addition, MPC researcher Zhou Meiyan highlighted this
section, saying it had caught her attention.

--------------
Paying Attention to Public Opinion?
--------------


14. (U) Accompanying the attention to economic development
goals, the two sessions also focused on issues of more immediate
impact on people's lives and ways to "ensure development
benefits for all." Raising incomes, job creation, expanding
social security coverage, and providing affordable housing and
access to public transportation were presented as some of the
near term goals. The Government Work Report noted that Shanghai
hopes to cap registered urban unemployment at 4.3 percent,
provide 100,000 new low-rent apartments and 300,000 affordable
housing units, and increase education expenditure to 4 percent
of GDP.


15. (U) A poll on the Jiefang Daily website during the two
sessions asked what issues visitors to the site were following
most closely. Housing (30 percent),social security (12
percent),environment (9 percent),increasing incomes (9
percent),and employment (8 percent) received the most votes.
Improving the transportation system (7 percent) and ensuring
food safety (6 percent) were also issues of some concern.


16. (U) The Government Work Report calls for "integrating"
public participation and expert evaluation into government
decision making, in order to "make sure that citizens are
effectively involved" in the legislative process. Public
opinion surveys, public notification, and public hearings are

SHANGHAI 00000049 004 OF 004


identified as ways to involve the public. The Report also calls
for "rigorous review and evaluation by public opinion and by
ordinary citizens" in evaluations of government performance.
JARRETT