Corruption Shake-Up Spreads to Shenzhen Mayor

UNCLAS SECTION 01 OF 02 GUANGZHOU 000355

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV CH
SUBJECT: Corruption Shake-Up Spreads to Shenzhen Mayor

Ref: A) GUANGZHOU 318

(U) This document is sensitive but unclassified. Please protect
accordingly. Not for release outside U.S. government channels. Not
for internet publication.


1. (SBU) Summary: Corruption allegations have brought down Shenzhen
Mayor Xu Zongheng. Xu's downfall, part of a series of
investigations that are shaking up the political leadership of
Guangdong, which included the removal of former Guangdong Chinese
People's Political Consultative Conference (CPPCC) Chair Chen
Shaoji, further weakens entrenched interests in the province. Hong
Kong media speculate that Shenzhen Party Secretary Liu Yupu will
replace Chen as Guangdong CPPCC Chair. End summary.

Another One Bites the Dust
--------------


2. (U) Corruption investigations have claimed another victim among
Guangdong Province's political elite. Hong Kong media are reporting
that Shenzhen Mayor Xu Zongheng has been arrested and is under
intense interrogation on allegations that he accepted bribes. After
widespread reporting in Hong Kong over the weekend, mainland media
only confirmed the investigation late in the day Monday with a terse
one-sentence report released by Xinhua. Xu reportedly accepted
massive bribes from contacts in his native Hunan Province for
construction contracts on Shenzhen infrastructure development
projects, including the subway, highways, public apartment buildings
and sports facilities for the International University Games-Summer
Universidades, which Shenzhen will host in 2011.


3. (SBU) Unlike most Shenzhen mayors, Xu long lived and worked in
the city. Arriving there from Hunan in 1993, he is practically a
local in a city dominated by migrants from other parts of China.
His downfall further weakens entrenched local political interests as
does the recent case of Chen Shaoji (reftel). As head of the
Shenzhen Organizational Department from 2000 to 2003, Xu was
responsible for the appointments of many current officials in
Shenzhen. His removal will strengthen central government control
over the city.

Others Implicated
--------------


4. (SBU) In addition to Xu, several other Shenzhen officials are
also currently under investigation. Vice Mayor Yan Xiaopei, a
member of the China Zhi Gong Party, has been accused of corruption
related to her work overseeing the city's urban planning agencies.
In addition, Hong Kong media report that another unconfirmed senior
Shenzhen official, likely Shenzhen Municipal Government Secretary
General Li Ping, is under investigation.

Who's Moving Up?
--------------


5. (SBU) Various sources have recently speculated that the
leadership vacuum in Shenzhen will soon be even larger because
Shenzhen Party Secretary Liu Yupu will replace the recently ousted
Chen Shaoji as Guangdong China People's Political Consultative
Conference chair. A Shandong native, Liu became Shenzhen Party
Secretary in January 2008. Previously, he spent four years as
Guangdong deputy party secretary and president of the Guangdong
Party School. Before coming to Guangdong in 2000 to serve as
Standing Committee member and director general of the Organizational
Department of the GD CPC, Liu was vice governor of Shaanxi
Province.



6. (SBU) Possible candidates mentioned in Hong Kong media reports to
replace Liu as municipal party secretary include:

--Lin Xiong, Standing Committee member and director general of the
Propaganda Department of the Guangdong Communist Party of China (GD
CPC). Lin was reportedly a secretary to Wen Jiabao.

--Hu Zejun, Standing Committee member and director general of the
Organization Department of the GD CPC. Previously, a vice minister
in the Ministry of Justice, Hu came to Guangdong in 2004.

--Jiang Zelin, Standing Committee member of the Hainan CPC and party
secretary of the Sanya Municipal CPC. Originally from Anhui
Province, Jiang previously served as Hainan vice governor.

One possible candidate identified as a replacement for Xu as
Shenzhen mayor is Shenzhen vice Mayor Xu Qin. Xu arrived in

GUANGZHOU 00000355 002 OF 002


Shenzhen last year from the State Development Reform Commission in
Beijing.

GOLDBERG