SHANGHAI SUMMER SIMMERING WITH SUB-SURFACE SOCIAL STRIFE

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000351

SIPDIS

STATE FOR EAP/CM, INR AND DRL
NSC FOR KUCHTA-HELBLING

E.O. 12958: DECL: 8/7/2034
TAGS: PGOV PHUM ECON ELAB SOCI ASEC CH
SUBJECT: SHANGHAI SUMMER SIMMERING WITH SUB-SURFACE SOCIAL STRIFE

REF: BEIJING 2066 AND PREVIOUS

CLASSIFIED BY: BEATRICE CAMP, CONSUL GENERAL, US CONSULATE
SHANGHAI, DEPARTMENT OF STATE.
REASON: 1.4 (b),(d)



Summary

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1. (C) Two recent housing protests as well as other local
concerns that cropped up during the summer highlight the
continuing challenges to social stability in Shanghai.
Consulate contacts say housing issues will remain a point of
contention in the coming months, but point out that unrest to
date has been localized and contained. In addition to housing
issues, Muslim migrants' reactions to violence in Xinjiang and
ongoing discussion about the city's demographic concerns
attracted high-level attention from the Shanghai Municipal
Government. End Summary.



Shanghai Housing Protests Reveal Discontent

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2. (SBU) On June 27, A 13-story apartment building under
construction in western Shanghai's Minhang District collapsed,
killing a worker inside. Hundreds of people who had
pre-purchased apartments in the building (489 of 629 vacant
apartments had been sold) immediately staged a protest outside
the site to demand answers about the collapse and submit
requests for their deposits to be returned. Netizens alleged
that the builder, Shanghai Meidu Real Estate Company, had
purchased the property for a below-market price because of
improper relationships with district government officials. The
scale of the protest elevated the collapse to a national story
and led to a call by Shanghai Party Secretary Yu Zhengsheng and
Mayor Han Zheng for an official investigation. Allegations of
corruption and impropriety later surfaced in the mainstream
local media, with the Shanghai Daily and Oriental Morning Post
reporting on links between the development company and the
Minhang District Government. One month after the collapse, on
July 28, six businessmen from the company were arrested.
Several government officials, including Minhang District Vice
Governor Lian Zhenghua and Meilong Town Mayor Shi Baoqi, were
slapped with administrative warnings.




3. (SBU) Separately, on July 19, Shanghai media reported a
second major housing protest in Hongkou District, north of the
city center. Photos also were posted on the internet of nearly
100 protestors clashing with police outside the Baohua City
Garden sales office. Protestors complained that the
construction of Baohua buildings had damaged the foundations of
their neighboring apartments, causing cracks in the walls. The
Hongkou protest attracted considerable attention from netizens,
but their opinions reflected a split between those who
classified the protestors as "troublemakers" and offered
assurances that "the government will take care of it" versus
others who were pessimistic, stating that "protests have no use"
and "in this type of situation, the government usually keeps the
profits."



Localized and Contained, But Concerns Remain

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4. (C) Consulate contacts told PolOff that while housing
protests in Shanghai are nothing new, the scale of the Minhang

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and Hongkou protests was significant, and they are worried about
future unrest stemming from housing problems. Pan Rui, a
Shanghai native and a professor at the Center of American
Studies at Fudan University, said on July 28 that he "never saw
anything like" the Minhang building collapse. Pan observed that
Shanghai's rapid pace of development leads developers to take
too many shortcuts in order to complete projects.




5. (C) Mao Hengfeng, a local housing activist, told PolOff on
July 27 that she remains concerned about the handling of housing
issues by police. Mao and Pan both pointed out that Shanghai is
one of the primary sources of many of the housing petitioners
who travel to Beijing with grievances. Mao said she knows of
two evictees who recently were arrested by police to prevent
them from taking their petitions to Beijing.




6. (C) James Cai, Deputy Director of the Xuhui District Foreign
Affairs Office, said on July 30 that he believes the Shanghai
Municipal Government needs to improve its housing policies.
According to Cai, the local government in particular opens
itself up to a rash of problems when forcing residents to
relocate to make way for a public works project such as a new
subway stop. The negotiated settlement for relocation is not
very transparent, Cai complained, and Shanghai residents have
realized that if they are the last "hold out" (dingzizhu),then
they stand a chance to receive greater compensation than their
fellow tenants. The municipal government has backed itself into
a place where if it is "too tough of a negotiator," it is
criticized for being too forceful in its policy. If it allows
residents to hold out, then it encourages people to take the
same approach in other communities, thereby increasing the
chances of protests and instability.



Shanghai Muslims' Reactions to Xinjiang Violence

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7. (C) Local officials also were concerned during July with
Muslim migrants' reactions to violence in Xinjiang (see reftel).
The Oriental Morning Press reported on July 9 that all of the
municipal government's top officials -- Municipal Party
Secretary Yu Zhengsheng, Mayor Han Zheng, the Chairmen of both
the Municipal People's Congress and the Shanghai Committee of
the Chinese People's Political Consultative Conference (CPPCC),
and Deputy Party Secretary Yin Yicui -- split into groups to
visit Xinjiang Uighur migrants who work in the city, visiting
hotels, restaurants, and the Shanghai University of Traditional
Chinese Medicine.




8. (C) While eating at a Uighur Restaurant on July 30, Xuhui
District FAO Deputy Director Cai told PolOff that Shanghai's
Uighurs remained calm throughout July, pointing out that the
Uighurs working in a restaurant jam-packed with customers do not
want to jeopardize the earnings that they send home to Xinjiang
as remittances. The Party Secretary of Zhejiang Province's Yiwu
Municipality -- a city with a sizable Muslim population --
voiced a similarly confident view during a meeting with the
Consul General on July 23, stating that Uighurs in East China
have good jobs, and their families in Xinjiang rely on their
remittances. Whatever the reason, despite the initial concerns,
there were no reports of ethnic violence in Shanghai during July.



Demographic Debates

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9. (SBU) In late July, two separate policy pronouncements on

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demographic issues sparked on-line discussion. First, the
Shanghai Population and Family Planning Commission said in a
statement on July 23 that authorities will go door-to-door to
encourage couples to have a second child if they both grew up as
only children. Local officials were quick to point out that the
campaign is consistent with the Central Government's one-child
policy and only serves to remind residents where there are
exceptions. The reminder is necessary, they said, because of
the growing percentage of registered residents who are now age
60 or older. Most bloggers' reactions to the initiative posted
on Baidu appeared to be relatively positive, with many pointing
out the obvious problem that "the old are many, the young are
few."




10. (SBU) At the same time, however, reactions were largely
negative towards a Shanghai Daily report on July 24 that the
Shanghai police are "raising the public's awareness of the
demographic data collection of all residents living in the city,
including migrant workers and foreigners, for better security
and urban planning." Hongkou District piloted a project to
collect demographic data by going door-to-door in 2008, and the
program was expanded in March 2009. Articles and blogs
questioned the security of private information that is provided
to residential information collectors.
CAMP