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FM AMCONSUL SHANGHAI
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INFO RUEHBJ/AMEMBASSY BEIJING 2000
RUEHCN/AMCONSUL CHENGDU 1317
RUEHGZ/AMCONSUL GUANGZHOU 1288
RUEHSH/AMCONSUL SHENYANG 1313
RUEHIN/AIT TAIPEI 1126
RUEHHK/AMCONSUL HONG KONG 1459
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7591

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000297 
 
SIPDIS 
 
DEPT FOR EAP/CM AND INR 
 
E.O. 12958: DECL:  8/1/2033 
TAGS: PGOV PINR ECON CH
SUBJECT: SHANGHAI PARTY SECRETARY YU ZHENGSHENG'S PRAGMATIC 
LEADERSHIP 
 
REF: A) SHANGHAI 19; B) SHANGHAI 18 
 
CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate , 
Shanghai . 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) Summary: Eight months after taking over the leadership 
in Shanghai, Consulate contacts praise Party Secretary Yu 
Zhengsheng as being fair-minded and pragmatic.  He may not be a 
charismatic leader, but he is able to strike a balance between 
Beijing and Shanghai's interests.  As a practical matter, this 
is helpful as he still lacks the political clout to dominate the 
Shanghai Bureaucracy and he certainly does not want to challenge 
Beijing on any core issues.  As for Shanghai Mayor Han Zheng, 
our contacts believe he will remain in place to maintain some 
stability in Shanghai's leadership.  However, trials in 
connection with Shanghai's pension scandal continue.  End 
Summary. 
 
 
So Far So Good 
-------------- 
¶2.  (C)  In various meetings with Congenoffs, a range of local 
contacts have provided positive assessments of Shanghai Party 
Secretary Yu Zhengsheng.  During a July 17 dinner, Shanghai CIQ 
officials described Yu as someone who can make decisions with an 
interesting and well-connected background, and popular with 
Shanghai citizens.  They found him to be straightforward and 
pragmatic.  Fudan University Center for American Studies 
academics had similar views of Yu during a dinner on July 18. 
They characterized Yu as down-to-earth and possessed an inner 
strength.  Yu has distinguished himself from past Shanghai 
leaders by being more attentive during meetings and forcing 
advisors to put down their prepared texts and answer questions. 
Yu also seems to pay more attention to the problems of Shanghai 
citizens and has visited poorer sections of Shanghai.  In a 
meeting on July 28, Shanghai Municipal Peoples Congress (MPC) 
researcher Zhou Meiyan in a meeting also praised Yu for his 
efforts to learn about conditions for ordinary people.  Yu once 
refused to take an official car to a function and insisted on 
riding the subway with his wife instead.  Having ridden the 
subway, Yu called on officials to make improvements. 
 
 
¶3.  (C) Zhou believes that it is too early to tell whether Yu 
truly supports reforms.  She senses that there have been some 
improvements in the media.  For example, there was a great deal 
of information about the July 1 knife attack of a police station 
in the media and on the Internet.  In addition, the Pudong 
District Government is fostering an open government and has 
published many regulations on the Internet.  While it is not 
clear whether Yu is directly responsible for this more open 
atmosphere, the government has become more open after Yu's 
arrival, said Zhou.  Zhou bases some of her hopes on Yu's 
actions when he was Hubei Party Secretary.  Under Yu, the Hubei 
government published its budget on the Internet.  She has been 
pushing for the Shanghai government to also publish its budget, 
but these efforts have stalled as there is much opposition 
within the governmental bureaucracy.  She believes that Yu 
supports publishing the budget, but does not yet have the 
political influence to overcome this opposition. 
 
 
Keeping Shanghai In Line 
------------------------ 
¶4.  (C) During a lunch on July 24, Tongji Professor Frank Peng 
relayed a somewhat less positive view of Yu.  Peng criticized Yu 
for lacking charisma.  In addition, he felt that Yu lacks his 
own policies and simply follows Beijing's lead.  Beijing's goals 
for Shanghai are for the city to 1) obey the Central Government 
and 2) develop its four "centers" (international economic, 
financial, trade and logistics) in support of the country's 
development. 
 
 
Yangtze River Delta Integration 
------------------------------- 
¶5.  (C) Another of Beijing's chief goal is to improve Yangtze 
River Delta (YRD) integration.  The YRD region consists of 
Shanghai, Jiangsu and Zhejiang.  Although this region only 
accounts for 2 percent of the land and 10 percent of the 
population, it generates 24 percent of China's GDP.  Peng 
predicted that the transportation systems and social systems of 
 
SHANGHAI 00000297  002 OF 003 
 
 
the cities in this region will be fully integrated in the near 
future.  There will be trains departing every few minutes from 
Shanghai for Hangzhou and other major cities in the region. 
Citizens will be able to use the same transportation cards and 
medical insurance cards throughout the region.  According to 
Peng, Chen Liangyu's downfall was due in part by his refusal to 
support YRD integration.  Chen believed that he would not be 
able to control the YRD region.  On the other hand, Xi Jinping 
was very active in pushing for YRD integration during his brief 
tenure as Shanghai Party Secretary.  Peng believes that Yu 
supports YRD integration, but did not give any concrete examples. 
 
 
Maglev vs. High-Speed Rail 
-------------------------- 
 
¶6.  (C) According to Peng, Yu does not have the inclination, nor 
the power to oppose Beijing's policies.  For example, Shanghai 
has for a long time championed the establishment of Magnetic 
Levitation (Maglev) lines to connect Shanghai to nearby cities. 
(See reftels.)  Former Premier and Shanghai Mayor Zhu Rongji was 
a big supporter of the Maglev which has German technology, 
because of his close ties to German Chancellor Gerhard 
Schroeder.   The Railway Ministry in Beijing, however, supports 
a "wheel and rail" system and is promoting high-speed railways. 
 Peng cited the recent announcements that Shanghai will build 
high-speed rail lines from Shanghai to Hangzhou and Shanghai to 
Nanjing as an indication that Yu is siding with the Central 
government and abandoning the Maglev.  (Note: Officially, the 
Shanghai government's plans to extend the Maglev to Hangzhou 
have only been suspended.  The suspension came after large scale 
protests broke out against the Maglev from residents who felt 
that the extensions would decrease their property value and harm 
their health. However, popular opposition alone probably should 
not be enough to derail the project.  End Note.)   Peng added 
that even if Yu wanted to oppose the decision, he did not have 
the political clout to ignore Beijing. 
 
Keeping a Balance 
----------------- 
 
¶7.  (C)  Peng noted, however, that past Shanghai leaders were 
perhaps too strongly in favor of Shanghai.  It is important for 
Shanghai's Party Secretary to maintain a balance between Beijing 
and Shanghai, something that Yu has succeeded so far in doing. 
Shanghai still has a bright future.  As host of the 2010 World 
Expo, the Shanghai government is focusing its efforts in three 
areas.  First, the city is trying to improve cultural and moral 
standards by urging citizens to act civilly.  Second, it is 
taking steps to improve Shanghai's infrastructure.  Third, it is 
implementing more measures to improve the government's 
transparency and openness.  Among other things, the city knows 
that foreigners care about openness and transparency and is 
taking steps in this area to improve its international image. 
All of these measures will improve life in Shanghai. 
 
Yu's Last Stop? 
--------------- 
 
¶8.  (C)  Given Yu's age of 63, both Peng and Zhou expect that Yu 
will finish his career in Shanghai.  He will be too old to take 
on another position at the end of his five years in Shanghai as 
Party Secretary.  Zhou added that it might be beneficial for a 
leader not to have aspirations for higher offices.  Yu will not 
be constrained by ambition and can act more in the interests of 
the city. 
 
Han Zheng is Lucky 
------------------ 
 
¶9.  (C) Peng and Zhou also believe that Mayor Han Zheng will 
remain in place.  According to Zhou, Beijing does not want to 
create more instability in the Shanghai leadership by making 
wide-scale changes.  Peng said that Han knows that he is lucky 
to retain his position and that he continues to be vulnerable 
because of the scandal.  Low-level investigations into the 
Shanghai pension scandal continue.  Notably, Huang Ju's former 
secretary Wang Weigong is still under investigation, which could 
have implications for Han. 
 
 
Comment 
------- 
¶10.  (C) After the turmoil caused by the 2006 Shanghai Pension 
 
SHANGHAI 00000297  003 OF 003 
 
 
Scandal, Yu appears to have brought some stability to Shanghai. 
As noted by contacts, having a leader who is in line with 
Beijing is not necessarily a bad thing for Shanghai.  In this 
view, Beijing is not trying to limit Shanghai's development but 
wants to ensure that this development benefits the whole country 
and does not run counter to the Center's economic goals. 
Shanghai may be at the head of the train and do much of the 
heavy pulling, but it will not set the direction. 
JARRETT