EXPLORING BRIDGES TO NANJING CIVIL SOCIETY: FEDERATION OF

UNCLAS SECTION 01 OF 03 SHANGHAI 000150

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV SOCI ECON CH
SUBJECT: EXPLORING BRIDGES TO NANJING CIVIL SOCIETY: FEDERATION OF
INDUSTRY AND COMMERCE AND ACADEMY OF SOCIAL SCIENCES

(U) Sensitive but unclassified. Not for dissemination outside
USG channels; not for Internet distribution.


1. (SBU) Summary: Initial calls on the Nanjing Federation of
Industry and Commerce and the Nanjing Academy of Social Science
yielded potentially valuable contacts for gauging the extent of
civil society development in Nanjing. Although both bodies are
closely tied to the Communist Party, they act as bridges to the
local private business community and academic circles,
respectively, and could prove useful in our efforts to expand
our own outreach in Nanjing. End summary.

Nanjing Serious about Supporting Private Firms
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2. (SBU) Nanjing's leadership strongly supports the
development of private industry, Nanjing Federation of Industry
and Commerce Executive Vice Chairman Li Bing stressed to Congen
Shanghai's Nanjing Outreach Office during a March 24
introductory meeting. In particular, the Nanjing Municipal
Government has organized a private economy leading group
(lingdao xiaozu) headed by a vice mayor. In 2008, Nanjing
possessed 115,300 private companies, 210,000 individual
industrial and commercial households which accounted for 1/3 of
the municipality's GDP. Although Nanjing has fewer private
enterprises than neighboring Zhejiang Province - the
jurisdiction generally viewed as the model for private
enterprise development in China - Jiangsu's firms tend to be
better quality and include large conglomerates like the food
processing giant Yurun and the major electronics retailer
Suning.


3. (SBU) Li described the role of the Nanjing Federation of
Industry and Commerce as connecting the government and private
economy, and helping the government to regulate companies. The
Federation itself, however, is not a department of the
government but instead represents entrepreneurs' interests.
(Comment: It is important to note, however, that, based on
information available from the Federation's website, a deputy
director of the Nanjing Municipal Party Committee's United Front
Work Department serves as the secretary of the Federation's
internal Communist Party cell and outranks Vice Chairman Li.
End comment.)


4. (SBU) According to Li, the recent economic downturn has had
a varying impact on Nanjing's private firms, although overall
the situation in Nanjing is better than in Zhejiang and
Guangzhou provinces. For example, Yurun's food and tourism
business is fine, but investments in real estate have suffered.
Steel producers and companies dependent on foreign trade,
particularly in the textile and machinery industries, have also
been hurt. Nevertheless, Li stressed there had so far not been
many lay-offs in Nanjing, and only a few small companies have
closed. Some companies are still hiring workers, and others,
even as business has dried up, are keeping workers on the roles
and providing them additional training in order to retain a
skilled labor force in anticipation of better times. Firms in
heavily polluting industries such as dyeing where, as a matter
of policy, bank credit is unavailable face greater difficulties.
Li stressed these firms, however, were under pressure even
before the onset of the global financial crisis.


5. (SBU) Reviewing the climate for private enterprise in
Nanjing, Li said the municipality's policies are similar to
those in Zhejiang and Guangzhou. Nanjing's main advantage lies
in its rich endowment of human capital arising from the many
universities located there. Consequently, Nanjing plans to
build a "software city" dominated by private enterprises. In
addition, Nanjing enjoys a relatively transparent local
government and convenient transportation links as well as an
extremely safe security environment.


6. (SBU) In Li's view, China's private firms are experiencing
the best time in their history in terms of official protection.
Federation members, for example, can send protests about
corruption to a complaint office attached to the Municipal
Communist Party Discipline Inspection Committee. The local
courts have also been discussing with the Federation how to
protect member companies' interests during the present economic
downturn. The Federation has increased cooperation with the
local prosecutors' office and the Municipal Public Security
Bureau as well.

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7. (SBU) Li herself, a member of the municipal Political
Consultative Commission, has used her position to advocate for
the interests of private businesses. She cited the example of
her success in winning an exemption for trucks supplying the
city's grocers to a Nanjing traffic ordinance banning truck
traffic from the city during the day. She added the Federation
had organized seminars for member companies with the Municipal
Labor and Social Security Bureau to improve understanding of
China's new Labor Contract Law. Acknowledging the importance of
private firms in generating employment, Li noted the Federation
has also aided private firms to secure bank loans.

Social Scientists Stress Social Role of Party-led Orgs
-------------- --------------


8. (SBU) In a separate March 24 meeting, Nanjing Academy of
Social Sciences (NJASS) Vice President Chen Ru outlined NJASS's
structure and functions. One of China's few municipal-level
social science research institutions, NJASS has 40 full-time
staff members including 10 researchers and provides expert
policy advice to Nanjing's municipal leadership. It has three
research institutes covering social, economic, and cultural and
historical development. Each year NJASS produces a "blue book"
on Nanjing's social and economic development issued immediately
prior to the annual session of the municipal people's congress
(usually in January) and sponsors three to five large academic
events. These events include the "economic and social
development forum" every September and exchange programs with
institutions in Beijing and Shanghai along with overseas
universities. Research projects at the Academy for 2009 include:
-- transformation of the basis of the Nanjing economy from
traditional manufacturing toward high-technology and services,
in line with the central government's plans for development of
the Yangtze River Delta;
-- improving innovation in science and education, particularly
among the over 40 universities located in the municipality;
-- enhancing Nanjing's overall competiveness;
-- promoting "culturally creative industry", such as Buddhism
studies and cultural preservation;
-- maintaining social stability and social security during the
economic downturn;
-- and examining labor issues such as medical insurance and
worker-management relations.


9. (SBU) Asked to comment on the role of nongovernmental
organizations in Nanjing society, a researcher from the NJASS
Social Development Institute highlighted the role of the
traditional "united front" organs such as the Communist Youth
League, and the Women's Federation. He observed that Nanjing
has organized 7700 (government-affiliated) grass-roots trade
unions, covering 1.5 million employees, which focus on
employment, training, and collective negotiation for salaries.
In addition, the municipality has many industry associations,
which are somewhat more independent from the government and help
entrepreneurs communicate among themselves and establish
industry standards.


10. (SBU) Nanjing has exhibited a unique characteristic in its
encouragement of volunteerism, the researcher noted. Currently
the municipality has half a million registered volunteers,
engaged in such activities as poverty alleviation, education,
assistance to the disabled and aged, and environment protection.
The researcher concluded the functions fulfilled by these
volunteer efforts will expand and deepen into the foreseeable
future.

Comment
--------------


11. (SBU) Our goal on this trip was to establish contacts to
help us begin to ascertain the extent of civil society
development in Nanjing. Both NJASS and the Federation of
Industry and Commerce - neither of which have had previous
contact with Congen Shanghai -- are, to different degrees,
outreach organs of the Nanjing Municipal Communist Party
Committee; NJASS focuses on academics while the Federation acts
as the leadership's formal bridge to the municipality's growing
community of private businessmen. NJASS also undertakes public
opinion surveys on behalf of the Nanjing authorities. Though
not civil society organizations themselves, they do provide an
entry point to influential communities in Nanjing and may be

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valuable partners as we seek to expand our own outreach
activities in Nanjing.
CAMP