LIAONING AND SHENYANG PARTY CHIEFS ON GOVERNANCE,

C O N F I D E N T I A L SECTION 01 OF 02 SHENYANG 000051

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E.O. 12958: DECL: 04/15/2028
TAGS: PGOV PINR PREL PREF ECON KN CH
SUBJECT: LIAONING AND SHENYANG PARTY CHIEFS ON GOVERNANCE,
NORTH KOREAN BORDER-CROSSERS, DEVELOPMENT CHALLENGES

REF: SHENYANG 44

Classified By: AMBASSADOR CLARK T. RANDT, JR. REASONS: 1.4(b/d).


1. (C) SUMMARY: At a meeting with the Ambassador in
Shenyang, Liaoning Province's new Party Secretary, Zhang
Wenyue, explained that high-level attention from Beijing, a
booming economy and growing revenue expansion are
bankrolling Liaoning Province's efforts to address key
social-stability issues. Liaoning "understands American
concerns" about the repatriation of North Koreans arrested
in the province, but "firmly opposes" such "illegal"
behavior and will handle these incidents according to
domestic Chinese law, international law and humanitarian
princCkles - a slightly softer formulation than we have
heard here before. On economic issues, provincial and
local officials remain thirsty for further American trade
and investment even as economic ties with the United States
reach new heights on the back QCjor investments by the
likes of Intel, General Electric and Goodyear. END
SUMMARY.


2. (SBU) During a two-day visit to Shenyang, the Ambassador
met April 14 with Liaoning Party Secretary Zhang Wenyue,
the province's Governor until late last year, and with Zeng
Wei, Shenyang's newly-appointed Party Secretary.

"REVITALIZATION" AND ITS CHALLENGES
--------------

3. (SBU) Into its fifth year, Beijing's "Revitalize the
Northeast" initiative is bearing fruit in Liaoning
Province, which has registered double-digit "GDP" growth of
over 12 percent per annum since 2004; a rapid 14.5-percent
increase in 2007 pushed the province's per capita "GDP"
above USD 3200, Zhang Wenyue told the Ambassador.
Concomitant, sustained record increases in provincial
revenue, which expanded by twenty percent last year, have
allowed provincial authorities to focus on--and adequately
fund policy measures for--what Zhang identified as the
province's most pressing challenges: providing housing to
those in need; mitigating unemployment, especially for
laid-off government workers; and raising living standards
by tending to "minsheng" (people's livelihood) issues.


4. (SBU) A massive slum-renovation initiative--launched
several years ago and typically credited to former Liaoning
Party Secretary, and now-Vice Premier, Li Keqiang--has
built new low-cost housing for over 1.3 million people, or
420,000 households in this province of roughly 40 million.
Re-employment initiatives, free job-training programs and
private-sector expansion in recent years have landed jobs
for large numbers of workers laid off in the 1990s by many
of the province's state-owned enterprises, Zhang claimed.
Lay-offs once numbered as high as 2.5 million, but Liaoning
has found new jobs for 1.78 million such laid-off workers;
by the end of 2007, official unemployment dropped to 4.23
percent, or under 700,000. As for "minsheng" issues,
boosting spending on education, anti-poverty measures,
health care, social security and environmental protection
remains the key priority. High-speed growth
notwithstanding, Zhang acknowledged that Liaoning still has
v.>Q,s to
" and would need a "long time" to resolve these
issues. Speaking to similar challenges at the municipal
level, Zeng Wei also put a premium on resolving "minsheng"
issues like health, housing, and employment.

LIAONING "FIRMLY OPPOSES" NORTH KOREAN BORDER-CROSSERS
-------------- --------------

5. (C) Responding to queries from the Ambassador regarding
North Korea, with which Liaoning Province shares a long
border, Zhang emphasized that border stability remains a
paramount concern. In response to the Ambassador's caution
that the United States remains concerned about ongoing
reports of North Korean border-crossers in Liaoning
Province being repatriated to the DPRK, Zhang used a
slightly softer formulation than we have heard here before,
saying he "understands American concerns" but "firmly
opposes" such "illegal" behavior and will handle these
incidents according to domestic Chinese law, international
law and humanitarian principles.

JUDGING (DIS)SATISFACTION: OPINION AND FEEDBACK
-------------- --

6. (C) Asked how he discerns popular opinion and Liaoning
residents' satisfaction with his policies, Zhang explained
that he makes use of a number of channels. These include
monthly, or weekly, visits by government officials to
"ordinary citizens"; correspondence from his charges (Zhang
claimed to have personally opened over 4000 letters from
citizens since 2004, making notes and referring them to
subordinates for action); commentary in web-based and
traditional print media; a provincial government website,

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where netizens can leave comments; and--during his previous
posting--the online "Governor's Inbox" (which he claimed to
personally access on a regular basis).

CALLS FOR MORE U.S. TRADE AND INVESTMENT
--------------

7. (U) On economic issues, Zhang Wenyue and Zeng Wei both
offered sunny appraisals of trade and investment ties with
the United States. Bilateral trade between Liaoning
Province topped USD 2.1 billion in 2007, making the United
States one of the province's top trading partners. The
United States is also a major investor in the province,
which is currently home to roughly 4500 American-funded
enterprises, with contracted foreign direct investment in
excess of USD 14.4 billion (USD 4.4 billion used).

BIO NOTES
--------------

8. (C) ZHANG WENYUE. Zhang, 63 and close to retirement (see
reftel for profile),recalled growing up in an impoverished
household, one reason he said he hopes to continue to focus
on "minsheng" issues, a key priority of the Hu Jintao/Wen
Jiabao administration. Zhang's wife and two children still
live in Beijing, where between 1990 and 1995 he served as a
Vice Minister of Geology and Mineral Resources. His son is
an architect for a firm under the Ministry of Construction
and was involved in the design of the "Bird's Nest,"
Beijing's new main Olympic stadium. His daughter is an
internist apparently quite attentive to her father's blood
pressure and wardrobe. Zhang recalled that he traveled to
the United States in 2004 and enjoyed watching the
presidential debates on television and a long conversation
there with Dr. Henry Kissinger. A geologist by training,
Zhang rattled off detailed statistics about U.S. mineral
reserves with ease.


9. (C) ZENG WEI. Zeng, 51, is a Communist Youth Leaguer who
worked his way up the Liaoning Party apparatus starting in
Dalian in the late 1970s. After transferring to Shenyang
to assume provincial-level postings on the government side,
Zeng became Party Secretary of Panjin, near Shenyang, in

2002. He returned to Shenyang two years later to become
Secretary General for the Liaoning Party Committee, the

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launching pad for his appointment in early 2008 as Party
Secretary of Shenyang. Zeng is polished, at ease and

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seemed eager to show off a close relationship with Li
Keqiang, whom he referred to by Li's first name.
WICKMAN