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RUEHCN/AMCONSUL CHENGDU 2884

C O N F I D E N T I A L SECTION 01 OF 05 CHENGDU 000043 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/CM 
 
E.O. 12958: DECL:  2/8/2032 
TAGS: PGOV SOCI PHUM KIRF CH
SUBJECT: SICHUAN SCHOLARS ON HARMONIOUS SOCIETY'S ROLE IN POLITICS, 
RURAL GOVERNANCE AND CIVIL SOCIETY 
 
REF: CHENGDU 31 
 
CHENGDU 00000043  001.2 OF 005 
 
 
CLASSIFIED BY: James A. Boughner, Consul General, Chengdu, 
Department of State. 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) Summary:  Scholars from the Sichuan Academy of Social 
Science described to a visiting EAP Desk Officer how the 
Harmonious Society "guiding philosophy" is being implemented at 
the provincial level.  The policy plays an important role in 
democratic experiments at the local level, including reform of 
the Standing Committee and "open nomination, open selection" 
systems, changes to the cadre evaluation and promotion system, 
and implementation of the new Supervision Law.  According to one 
scholar, in rural areas, the ideology is manifesting itself in 
increasing centralization and the development of social welfare 
policies on health insurance and care for the elderly.  In the 
development of civil society, Sichuan has experienced growth of 
some non-governmental organizations, even though the environment 
is still restrictive for many groups, especially religious 
organizations.  The scholars were open in describing the 
abstractness of the Harmonious Society concept, but also 
acknowledged the ideology's positive aspects of equality, 
justice, rule of law, security, and democracy as guideposts for 
current experiments and reform in the political and social 
realms.  End Summary. 
 
¶2.  (C) On January 18 CONGENOFF and visiting EAP Desk Officer 
Marc Abramson met with Guo Dan, Du Shouhu and Guo Hong, scholars 
from the Sichuan Academy of Social Sciences (SASS) (strictly 
protect all), to discuss implementation of the "Harmonious 
Society."   The scholars commented on the policy's effects on 
political experiments, rural governance and social welfare, and 
the development of civil society. 
 
Harmonious Society 
------------------ 
¶3.  (C) All three scholars described the Harmonious Society 
doctrine as a guiding philosophy or a goal, and linked it to 
"Scientific Development," the means to achieving the goal.  One 
scholar described the relationship as "mutually reinforcing." 
Guo Dan, Director of the SASS Political Research Institute, said 
the Sichuan leadership has a clear understanding of Harmonious 
Society and strongly supports its goals.  Provincial leaders are 
therefore trying to somewhat de-emphasize GDP growth and "clean 
up" (qingli) the province's development zones.  (Comment: 
"Development zones" are frequently sites of the worst kinds of 
corruption, expropriation of land, environmental pollution, and 
other abuses.  End comment.) 
 
¶4.  (C) Simultaneously, local level governments have strongly 
identified (rentong) with Harmonious Society, in part because it 
presages a relaxation of many of the tensions currently 
bedeviling party-government-people relations.  Farmers have 
strongly welcomed the doctrine of Harmonious Society, while 
local cadres are now thinking much more in terms of coordinating 
policy and implementation across all sectors of government and 
society.  SASS Deputy Director Du Shouhu agreed that 
coordination (xietiao), which also has a strong sense of 
"harmonization," is the critical working concept, in the sense 
of balancing competing interests and resolving central-local and 
inter-departmental conflicts.  He saw Harmonious Society as a 
key step in acknowledging that people and institutions are 
motivated by special interests, and then advancing to an 
understanding that the government must promote "general" and 
"overall" interests.  Du complained in particular about 
state-owned monopoly industries. 
 
¶5.  (C) Guo Hong, Director of the SASS Sociology Research 
Institute, said Harmonious Society emphasizes "social 
construction" (shehui jianshe).  She welcomed Harmonious 
Society's new emphasis on social issues and institutions, which 
recognized the growth since the 1990s of a "social environment" 
and "public interest society" that was mostly independent of the 
state and the old state-dominated work-unit system, and was 
instead being created through the operation of NGOs and other 
civil society entities.  She said she hoped the 17th Party 
Congress would make the idea much more concrete through the 
establishment of social programs. 
 
Democratic Experiments in Sichuan 
---------------------------------- 
¶6.  (C) Sichuan Province has always been at the forefront of 
democratic experiments, notably in piloting a "Standing 
Committee system" (changrenzhi) in local party congresses, 
according to Guo Dan, Director of the SASS Political Research 
Institute.  This reform is currently being tested in several 
locations in Sichuan, most famously in relatively rural Ya'an, 
 
CHENGDU 00000043  002.2 OF 005 
 
 
but also in the more populous and urbanized prefecture of 
Meishan.  The reform aims to give a role to party congress 
representatives beyond their normal responsibility to elect 
local party committee members every five years (who then select 
out of their number the smaller standing committee, led by the 
party secretary and deputy secretaries.)  Motivated by a desire 
to balance out the over-concentration of power in the hands of 
local party leaders, particularly the party secretary, the 
changrenzhi grants inspection and oversight powers to the 
representatives.  Party congress representatives in these pilot 
areas are allowed to contribute ideas when local regulations and 
policies are being drafted and are also soliciting ideas 
broadly, including outside party channels.  The party congress 
representatives will still not have the power to vote down 
policies, however.  While there are currently no plans to expand 
this particular pilot, Guo Dan opined that it was an effective 
way of pushing forward democracy. 
 
¶7.  (C) Guo Dan confirmed statements by party officials (reftel) 
that the "secretaries working meeting" (bangong hui), a 
decision-making body at the local level made up of the local 
party secretary and deputy party secretaries, and more exclusive 
than the party standing committee, is no longer operating.  This 
occurred as a natural outgrowth of national reform during the 
2006-2007 election of new party committees at all levels which 
mandated that the number of deputy party secretaries be reduced 
from six or more to two in almost all instances.  He noted the 
main reason for the reduction was to reduce party-government 
friction, clarify portfolios, and better delineate the division 
of power at the local level.  (Comment: Previously, the large 
number of deputy party secretaries at any particular level of 
government held particular portfolios and thus supervised 
particular party and/or government offices, but their 
supervisory powers were never clearly established.  Now, one of 
the two deputy secretaries is the head of government at that 
particular level and he directly supervises working level 
government offices in his capacity as government head, while the 
other deputy secretary is mainly responsible for party affairs. 
End comment.)  At present, the standing committee is the main 
decision-making body at the sub-provincial level.  Guo Dan 
stated that if the standing committee has a problem deciding 
policy, then it will consult with the larger party committee. 
Guo said that, in his opinion, the Party Committee should be the 
decision-making body and have the power to control the Standing 
Committee, but this is not currently happening. 
 
¶8.  (C) When asked about the progress of the "open nomination, 
open selection" (gong tui gong xuan) reform (by which party 
secretaries are selected with significant input from and 
 
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controlled voting by the general public and rank and file party 
members) Guo Dan said it was taking place in Sichuan only at the 
town/township (xiangzhen) level and that the populace respected 
and welcomed the process.  (Comment: Guo made no distinction 
between "open nomination, open selection" and "open nomination, 
direct selection" (gong tui zhi xuan).  End comment.)  In 
contrast, the party secretaries thus elected are nervous about 
the process, he said, because they have never been held 
accountable before and realize they can be voted out of office. 
In the past, party officials had no need to worry about 
citizens' support, but now they need to earn that support and 
keep their promises.  Guo Dan said he viewed this reform as an 
intersection of party democracy and "people's democracy." 
 
¶9.  (C) Another area of reform in response to the implementation 
of the "Harmonious Society" policy is the evaluation and 
promotion system (kaohe tixi) for party and government 
officials.  Guo Dan stated that previously evaluations 
overwhelmingly emphasized GDP per capita growth.  Recent changes 
in the system in Sichuan have emphasized achieving the goals of 
more efficient energy use and environmental protection outlined 
in the Eleventh Five-Year Plan (FYP).  Indeed, while every 
district/county-level government has its own evaluation 
standards based on local conditions, Guo pointed out that all 
districts have already introduced new standards based on the 
goals of the 11th FYP, including social and environmental 
factors that had previously been absent or largely ignored.  Guo 
Dan noted that the 11th FYP calls for a 20 percent reduction in 
the amount of energy expended per unit of GDP and that similar 
targets would be reflected in Sichuan's evaluation scheme. 
 
¶10. (C) Sichuan is one of nine pilot provinces for a Green GDP 
experiment, and Guo praised Suining and Mianyang prefectures for 
having done a good job in utilizing Green GDP.  Guo noted that 
while Sichuan's official GDP growth in 2004 was 13 percent, 
adjusted Green GDP numbers calculated as part of this pilot 
showed that Sichuan's "real" growth was only 7 percent. 
Environmental goals from an "Ecological Plan" (shengtai jihua) 
have also been built into the evaluation system of 10 
prefectures in Sichuan.  However, Guo Dan did note that per 
 
CHENGDU 00000043  003.2 OF 005 
 
 
capita GDP in Sichuan is still expected to increase by about 10 
percent annually. 
 
¶11.  (C) Guo Dan claimed the Supervision Law (Jiandu Fa) is 
significant for democracy in China, but that the rollout process 
would be slow, extending to 2010.  He said the new law would 
challenge vested interests and help regulate power 
relationships.  As an example of this trend, he cited a recent 
restriction on government departmental interests that directly 
benefited citizens.  Train fares generally go up substantially 
during Chinese New Year, one of the biggest travel seasons of 
the year.  This year, the Government listened to significant 
public opinion opposed to the increases and limited the power of 
the Railway Ministry to raise fares.  One significant power that 
the Supervision Law grants to People's Congresses is the power 
to prevent government departments from enacting regulations to 
collect fees from businesses and the public. 
 
¶12.  (C) Guo also discussed the recently prominent topic of 
"deliberative democracy" (xieshang minzhu).  In Sichuan, the 
focus of deliberative democracy is on the local People's 
Political Consultative Conferences (PPCC), which are viewed by 
the Party as the chief vehicle for the people to express their 
ideas to senior leaders.  In Guo's opinion, the PPCCs were doing 
an adequate job of representing various social interests and 
raising cases for the government to deal with.  However, he 
acknowledged that recent guidance from the central and 
provincial government on expanding deliberative democracy had 
not been fleshed out procedurally. 
 
Rural Governance and Social Welfare 
------------------------------------ 
 
¶13.  (C) SASS Deputy Director Du Shouhu, an expert on rural 
issues and a former director of the SASS Rural Research 
Institute, said there is a strong trend toward centralization in 
the countryside.  County and city-level governments have taken 
stronger control over villages, especially in the supervision of 
budgets.  There are currently fewer subsidies from the Central 
Government and hence, corresponding increases from provincial 
governments.  Guo Dan added that the goal of Harmonious Society 
is to achieve a balance between centralization and 
decentralization, but it will be a long, slow process.  Guo Dan 
agreed the overall trend is centralization, particularly in the 
areas of natural resources, environment, auditing, land, and 
security issues.  He said centralization is necessary at this 
stage in China's development, but "once under control," these 
areas would become less centralized.  Social issues and 
grassroots democracy, in contrast, are currently becoming less 
centralized, Guo Dan asserted. 
 
¶14.  (C) Du noted another trend was for outstanding college 
graduates and people with previous work experience to be sent to 
the countryside to take up positions as village heads.  (Note: 
Village leaders are supposed to be elected.  If these "excellent 
students" are subsequently "elected," the election process may 
have been denuded of its democratic qualities in these villages. 
 End note.)  Du expected that new personnel laws enacted in 2006 
mandating regular rotations of officials and an "up or out" 
promotion system in an effort to prevent corruption would be 
strictly implemented at the local level.  However, he added, 
given the dearth of talent in remote rural areas, the 
enforcement of such laws could pose problems.  He expected that 
one regulation forbidding officials to serve in their home 
regions would be obeyed to the letter in most areas, but that 
some exceptions might be made for ethnic minority cadres. 
 
¶15.  (C) When asked about the status of social welfare policies 
in rural areas, Du said Sichuan was one of the earliest 
provinces to initiate experiments on medical insurance in 
certain counties in Dujiangyan and Meishan prefectures (80 
counties are participating in the pilot nationwide).  In those 
pilots, rural residents pay 10 RMB (USD 1.20) per year and the 
central government contributes 40 RMB (USD 4.80).  Though 
successful to a certain extent, Du admitted it was still too 
expensive for rural residents in these areas to seek in-patient 
treatment.  Sichuan is also discussing options for care of the 
elderly.  Young rural residents are increasingly unwilling to 
remain in the countryside to care for ageing parents.  At the 
same time, elderly individuals are generally reluctant to enter 
old persons' homes.  Du said there is some support among 
government officials for a new contribution system for old age 
care similar to the medical insurance contribution system.  He 
emphasized that financial issues, not management issues, were 
key to solving the problem, and argued that fund transfers from 
wealthier eastern provinces, which benefited from western 
China's natural resources, were only right and proper.  Du also 
noted that every level of government would play a role in 
managing new social security programs, rejecting a suggestion 
 
CHENGDU 00000043  004.2 OF 005 
 
 
that Beijing might want to centralize control. 
 
Civil Society Development 
-------------------------- 
 
¶16.  (C) The Harmonious Society concept also has implications 
for the development of civil society, particularly organizations 
that mediate between the state and society, according to Guo 
Hong of the Sociology Research Institute.  Guo first began 
researching "intermediary organizations" (zhongjie zuzhi) in 
2005 and just issued a report in January on industry 
associations (hangye xiehui) in Sichuan.  In Sichuan, the 
transformation of government-administered "mass organizations," 
often referred to as "secondary government" (er zhengfu), into 
non-governmental associations is a relatively new phenomenon. 
Guo Hong described the process, primarily focused at present on 
industry associations, as one beginning with budgetary 
independence and then personnel independence.  She admitted that 
officials from the government offices frequently become heads of 
the associations, though they are "freely" elected by the 
members (Note: Post would characterize these associations not as 
true NGOs, but as government-organized NGOs or GONGOs.  End 
Note).  Prior to 2006, however, the association heads and 
secretary generals were all regular civil servants appointed by 
 
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the relevant government departments, a situation which no longer 
obtains for those associations who have been transformed into 
"tertiary organizations" (disan bumen), i.e., civil society 
institutions. 
 
¶17.  (C) Over 30 such associations were transitioned into this 
new set-up in 2006, a year in which it was generally very 
difficult to establish new organizations, Guo Hong said.  These 
associations focus on commercial issues and regulating their 
particular industries.  In response to a question, Guo Hong said 
that such associations, at least in Sichuan, do not lobby the 
government.  She noted that industry associations were 
relatively developed in Chengdu and that business associations 
representing non-Sichuan companies doing business in Sichuan had 
expanded in 2006.  Previously, only Wenzhou businessmen had 
registered a trade association in Sichuan; now, there were also 
active registered associations representing businesses from 
Zhejiang as a whole and Fujian.  Guo Hong added that she has 
been trying to establish an association for migrant workers for 
the last few years, but has been unsuccessful in registering a 
group. 
 
¶18.  (C) Guo Hong observed that public participation in 
governance was only been a slogan at the time of the 16th Party 
Congress in 2002, but that, in the last two years, there had 
been observable trends towards self-management in Sichuan.  She 
attributed the growth in public consciousness about public 
participation as well as its relative acceptance by local 
officials in part to the Party's popularization of the 
Scientific Development Concept, which had rendered obsolete old 
top-down approaches to "dealing with the masses."  Public 
interest groups (gongyi zuzhi) were now operating much more 
openly and were even in some cases receiving government funding, 
such as poverty alleviation funds, to pursue their work. 
 
¶19.  (C) Guo Hong has also been observing the development of 
urban governance at the community/resident committee 
(shequ/jumin weiyuanhui) level.  (Note: Resident committees are 
the traditional form of grassroots government in urban areas, 
equivalent to villages in rural areas.  "Communities" (shequ) 
were set up early in this decade as grassroots organizations in 
urban areas to focus on the provision of public services and, in 
some cases, are identical to resident committees.  End note.) 
She observed that the resident committees still remain reliant 
on higher levels of government for budget and personnel, but 
that they are gradually maturing into more autonomous entities 
that are able to represent and respond to the needs of their 
constituents.  For example, some committees and their related 
shequ organizations are engaged in innovative efforts to take 
care of farmers who have lost their land.  Guo Hong noted that 
Chengdu will hold the second round of public elections for shequ 
officers in 2007 (the first round was in 2004), so this will be 
the first changeover in shequ leadership since their 
establishment. 
 
¶20. (C) In 2006, Guo Hong engaged in a study of Chengdu 
homeowners associations (yezhu weiyuanhui).  She noted that, in 
contrast to Beijing, where such associations are often 
established to advocate for member's rights (weiquan), the 
Chengdu versions focus on providing a social forum and 
organizing entertainment activities for residents. She did note 
that many homeowners associations in Chengdu, if they are large 
enough (i.e., if a single large housing development forms a 
single homeowners association), are also constituting themselves 
as shequ.  Such homeowners associations are more active than 
 
CHENGDU 00000043  005.2 OF 005 
 
 
ones that do not have an organic relationship with a shequ. 
Homeowners associations that are also shequ usually have good 
relations with their local resident committees, but sometimes 
homeowners associations clash with resident committees and even 
with higher-level street offices (jiedao banshiqu, equivalent to 
a township/town) over resources, such as the control of land. 
In general, Guo Hong was encouraged to see an overall increase 
in autonomous governance at the grassroots level in Sichuan. 
 
NGOS AND RELIGIOUS ORGANIZATIONS 
--------------------------------- 
 
¶21.  (C) In spite of a generally difficult atmosphere for the 
establishment of NGOs in Sichuan, Guo Hong said most academics 
believe Sichuan is an "acceptable environment" for existing NGOs 
and that the space for NGOs is gradually expanding.  Prior to 
2006, Sichuan had the second largest number of registered NGOs 
(Shandong had the most), but, following a "rectification" of the 
NGO rolls in that year, she estimated that the total number had 
fallen.  Guo Hong cited as examples the success the NGO Green 
River has had in influencing government policy on protection of 
wildlife and natural resources, the ability of the Chengdu Urban 
Rivers Association (CURA) (a State-Department small-grantee) to 
report directly to the Chengdu City Government about watershed 
cleanup efforts, and the participation of a bird watching 
association in planning for a protected area.  Guo Hong said all 
these types of organizations that focus on environmental 
protection, education and poverty alleviation have good 
cooperation with the government and strong connections with the 
international community. 
 
¶22.  (C) When asked to comment on the role of religious 
organizations, Guo Hong was not so optimistic, saying the 
behavior of Christians and Catholics in China was strictly 
prescribed within religious boundaries.  In contrast, she noted 
that Buddhist Merit Associations (gongde hui) were given more 
latitude to carry out a range of charitable activities, 
including poverty alleviation, as long as these activities were 
seen as "internal," i.e., confined to their believers.  Guo Hong 
also predicted NGOs functioning in other previously sensitive 
areas, such as health services and education, would become 
increasingly more active.  She said demand for migrant education 
from private or NGO providers would increase as public schools 
continued to be closed in rural areas.  HIV/AIDS-related 
education and service from NGOs such as Aibai in Chengdu and 
Beijing will be even more welcome in the future.  A key issue 
will be how the government handles NGO registration, with 
tax-free status for non-profit groups being the crux.  While 
this will doubtless be difficult to manage, Guo Hong saw this as 
an inevitable trend, particularly with the need to increase 
public trust in the delivery of services. 
 
Comment 
------- 
¶23.  (C) The scholars were quite open in describing the 
abstractness of the Harmonious Society concept, while holding 
out hope it would become clearer with time.  At the same time, 
they acknowledged the ideology's positive aspects of equality, 
justice, rule of law, security, and democracy as guideposts for 
current experiments and reform in the political and social 
realms. 
BOUGHNER