VZCZCXRO0952
RR RUEHCN RUEHVC
DE RUEHGH #7139/01 3550942
ZNY CCCCC ZZH
R 210942Z DEC 06
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5381
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 5712

C O N F I D E N T I A L SECTION 01 OF 05 SHANGHAI 007139 
 
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DEPT FOR EAP/CM, INR/B, INR/EAP, AND DRL 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE 
TREAS FOR OASIA - DOHNER/CUSHMAN 
USDOC FOR ITA/MAC - A/DAS MELCHER, MCQUEEN 
NSC FOR WILDER AND TONG 
 
E.O. 12958: DECL:  X1 MANUAL REVIEW 
TAGS: PGOV PINR EINV ECON CH
SUBJECT: CONSULTATIVE DEMOCRACY YIELDING FRUIT IN WENLING 
 
REF: A) SHANGHAI 155; B) SHANGHAI 183 
 
SHANGHAI 00007139  001.2 OF 005 
 
 
CLASSIFIED BY: Veomayoury Baccam, Acting Policital/Economic 
Section Chief, U.S. Consulate, Shanghai, Department of State. 
 
REASON: 1.4 (b), (c), (d) 
 
 
 
¶1.  (C) Summary.  An open budget initiative that is moving into 
its third year in Zeguo Township of Zhejiang Province's Wenling 
municipality, has introduced an unusual level of participatory 
democracy. The process was launched out of the Zeguo Party 
Secretary's frustration with competing voices for the town's 
 
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limited budgetary resources and the inescapability of the 
perception of corruption caused by closed-door budget 
negotiations.  The initiative, which randomly selects nearly 300 
participants to act as an advisory body to the local government 
in drafting the budget, was orchestrated by Stanford University 
Professor James Fishkin and Australian Professor He Baogang and 
is an outgrowth of the "democratic consultation" process Wenling 
has been experimenting with over the past six years.  While one 
contact warned that the experiment could run into future 
problems and have limited impact, others claimed the project was 
advancing a form of consultative democracy, which is reportedly 
being studied by an advisory body in Beijing.  This is the first 
of two cables about democratic experimentation in Wenling.  The 
second cable focuses on experiments in legislative democracy 
being carried out in some of Wenling's other townships.  End 
Summary 
 
 ¶2.  (C) Poloff traveled on October 6 to Wenling, an 
administrative region under Zhejiang Province's Taizhou City to 
meet with Chen Yiming, Head of the Wenling Municipal Propaganda 
Department's Theory Office, Deputy Director of the Wenling 
Municipal People's Democratic Consultation Work Office, and 
author of Wenling's political experimentation.  Separately, 
Poloff met on May 10 with Jiaotong University Law Professor Zhu 
Mang who traveled to Wenling's Zeguo Township in April 2005 to 
observe the democratic consultation process.  Poloff also met on 
June 21 and October 25 with Shanghai Municipal People's Congress 
researcher Zhou Meiyan to discuss Wenling's reforms.  Zhou has 
been advising Chen on his reform program and has been promoting 
Chen's experiments within Shanghai and national-level political 
circles. 
 
¶3.  (C) Zhou also forwarded Poloff the presentation materials 
and summary notes from a November 2005 conference in Beijing 
that examined Zeguo's experiment.  That meeting was attended by 
about 40 participants from the United States, Brazil, Beijing, 
Shanghai, and Zhejiang.  Later, she forwarded Poloff the summary 
of a May 13-14 2006 "Workshop on the Legislature, Budget 
Supervision, and Public Finance," hosted jointly by the China 
University of Politics and Law, Peking University, and the Yale 
Law School that primarily discussed the Wenling reforms. 
 
--------------------------------------------- --------- 
Birth of "Democratic Consultation Meetings" in Songmen 
--------------------------------------------- --------- 
 
¶4.  (C)   According to a 2005 book Chen co-edited entitled 
"Democratic Consultation: Creation of the People of Wenling" 
(Minzhu Kentan: Wenling Ren de Chuangzao"), the system of 
"democratic consultative meetings" ("minzhu kentan huiyi" or 
"minkenhui") began in Wenling's Songmen Township--Chen's 
hometown--in June 1999.  At the time, the Taizhou Municipal 
Propaganda Department and the Wenling Propaganda Department were 
charged with finding an innovative way to educate local 
residents about the town's agricultural policies, which avoided 
the "listen-to-what-I-say" town meetings that local villages had 
been hosting.  The solution they came up with was to hold a 
"Conference on Building a Modernized Agricultural Countryside," 
which allowed cadres and local residents to communicate 
face-to-face, giving the residents the opportunity to voice 
their opinions as well as listen to what local officials had to 
say.  The meeting attracted over 100 participants and was so 
successful that Songmen decided to hold a total of four meetings 
that year.  Over 600 people attended altogether, offering 110 
suggestions, 84 of which were responded to, with 26 leading to 
promises of action. 
 
¶5.  (C) By the end of 1999, the Wenling government called for 
the expansion of the "Songmen Method," and held public hearings 
that had genuine give and take throughout the Wenling 
municipality.  In August 2000, the Wenling Party Committee and 
 
SHANGHAI 00007139  002.2 OF 005 
 
 
the Zhejiang Daily co-hosted a conference in Wenling and adopted 
the phrase "Democratic Consultation" to describe the myriad of 
discussion meetings that had sprung up.  The conference also 
decided to label the meetings as "democracy building" and the 
Wenling Party Committee gave its seal of approval.  Around this 
time, Chen said, he began to realize that the work of building 
democracy was more important than ideological work and began 
focusing all of his efforts toward this. 
 
¶6.  (C) In 2001, the Party Committee reviewed the "Democratic 
Consultation" effort, decided the Propaganda Department was 
doing a great job, and officially assigned the "Building 
Grassroots Democracy" portfolio to the department.  Chen said 
that his efforts in the Propaganda Department were given a boost 
of legitimacy with the 16th Party Congress Communique in 2002 
that called for building "people's democracy" and strengthening 
"people's supervision." 
 
--------------------------------- 
Letting the People Speak in Zeguo 
--------------------------------- 
 
¶7.  (C) After the initial success of the minkenhui, Chen, with 
the cooperation of Zeguo Township Party Secretary Jiang Zhaohua, 
set out to deepen the people's supervisory authority of the 
government.  Zeguo is a relatively wealthy township with a 
registered population of about 120,000 people and another 
estimated 10,000 migrant workers.  According to materials 
provided by Zhou, Zeguo had an annual public works budget of 
around 40 million RMB for several years.  However, according to 
Professor Zhu, in recent years, needs outpaced means in Zeguo, 
with annual public works budget proposals routinely running 
upwards of 100 million.  Zhu said that Wenling Party Secretary 
Jiang had complained about the difficulties of trying to balance 
all of the competing interests within the government, all of 
whom wanted a bigger piece of the pie.  According to Zhu, the 
Party Secretary was also concerned about the influence of 
several wealthy contractors who had been bribing government 
officials. 
 
¶8.  (C) Zhu said that although minkenhui had been held in Zeguo 
since 2000, people there remained somewhat apathetic.  At a 2004 
conference on minkenhui in Hangzhou's Zhejiang University, Jiang 
met Australian Professor He Baogang and Professor Fishkin and 
asked them to help design a scientific method to increase public 
participation in governance.  Working with Chen and others in 
the Propaganda Department, Zeguo held its first budgetary 
minkenhui in March 2005. 
 
¶9.  (C) According to the materials from the November 2005 
conference, the town government was allocated 40 million RMB for 
its 2005 public works budget.  At the beginning of the year, the 
township government selected 30 public works projects that it 
considered to be most important.  It then had a panel of experts 
carry out research into the proposed projects to determine the 
costs and put forward impartial explanations of what each 
project would entail.  The government found that the projected 
cost of all 30 projects was almost 137 million RMB, more than 
three times their budget. 
 
¶10.  (C) Using the method designed by Fishkin and He, the 
government then selected 275 people through a scientific random 
sampling process that represented all of the different interests 
of the township's constituencies.  Of the 270 who actually 
participated in the exercise: 66.8 percent were male; 33.2 
percent were female; 94.4 percent were married; 5.6 percent were 
engaged; and the average age was 47.5.  Interestingly, 11.2 
percent of the participants were also illiterate.  According to 
Professor Zhu, the illiterate were initially going to be 
excluded from the proceedings until they successfully argued 
that they possessed wisdom from which the group could benefit. 
 
¶11.  (C) According to the conference materials, after 
representatives were chosen, they were each given a copy of the 
findings of the panel of experts to review for 15 days.  On 
April 9, the representatives convened a minkenhui at the local 
high school to discuss the issues.  The participants separated 
into 16 small groups where everyone was allowed to voice their 
opinions and express their concerns about the proposed items. 
They were also asked to fill out a questionnaire before they 
began, marking each project with a grade from "0" to "10," with 
"0" being items that the respondents felt were a complete waste 
of resources.  One of the high school's teachers was assigned to 
chair each of the groups and ensure that government officials 
 
SHANGHAI 00007139  003.2 OF 005 
 
 
did not attend the discussions.  The illiterate participants 
were assisted by high school teachers during the minkenhui. 
(Note: We assume that the family members assisted the illiterate 
participants review the materials prior to the minkenhui.  End 
note.) 
 
¶12.  (C) According to Zhu, the groups tried to come up with a 
unified budgetary proposal.  The stipulation was that the budget 
must have only ten items or less and could not exceed 30 million 
RMB.  The groups then chose a spokesperson to present each plan 
when the groups reconvened in an upstairs auditorium.  In groups 
that could not come up with a unified proposal--some had two or 
three proposals--spokesmen for each proposal were assigned.  The 
chair of the large meeting (also a high school teacher) then 
called on the spokesperson for each proposal to briefly describe 
how they had reached their ideas and gave a panel of 12 experts 
a chance to weigh in with their feedback and suggestions.  The 
participants then divided into their small groups a second time 
to discuss their proposals again.  They redrafted their 
proposals based on the discussions (most groups only had one 
this time), and reconvened the large group to discuss the 
proposals and receive feedback from the experts.  According to 
conference materials, the full body of the Zeguo government 
attended the large group meetings as non-participating 
observers.  After this final meeting, each member filled out 
another questionnaire nearly identical to the first, ranking 
their budget preferences. 
 
¶13.  (C) The questionnaires revealed a shift in priorities after 
the exercise.  There was a large increase in support for 
projects that dealt with water pollution, environment and 
sanitation.  Participants ranked environmental protection as the 
most important factor in their decision-making (9.64 out of 10) 
and economic development as a close second (9.08).  The 
experiment also served to raise people's understanding of issues 
the government faced in deliberating its budget.  Accurate 
knowledge about the increase in the town's financial revenues, 
for instance, jumped more than 21 percentage points after the 
minkenhui, while the understanding of how many migrant workers 
were in Zeguo increased more than 19 percentage points. 
 
¶14.  (C) The participants were also asked to rank the 
effectiveness of the exercise.  They gave a rank of 8.46 to the 
utility of the small group discussions and a rank of 8.66 to the 
large group meeting.  All of the representatives believed that 
the minkenhui had treated everyone's ideas fairly and that the 
chairpersons of the small groups basically acted justly and did 
not use their positions as a bully pulpit to browbeat other 
members into agreeing with them. 
 
¶15.  (C) After the minkenhui ended, the government convened a 
work conference with the relevant component officials.  The work 
conference took the results of the second survey and laid out 
the projects in the rank order given by the minkenhui 
participants.  The work conference took the top 12 
projects--with an estimated cost of 34.4 million RMB--as the 
items for its 2005 budget, with the next 10 items--with an 
estimated cost of 22.5 RMB--as reserve projects, to be addressed 
if and when funds were available.  The municipal People's 
Congress passed the budget 82 to seven with one abstention. 
 
--------------------------------------------- - 
Zeguo 2006: Even Better the Second Time Around 
--------------------------------------------- - 
 
¶16.  (C) According to Zhu, Zeguo continued the budgetary 
experiment in 2006, although with three main differences that 
made the groups more representative and encouraged broader 
discussion.  First, migrant workers who had resided in Zeguo for 
several years were included in the pool of participants and each 
small group had one or two migrants.  Second, in 2005, the 
random sampling procedure was based on family, and not 
individuals.  Each family that was selected chose its 
representative, which probably accounted for the high percentage 
of males and married participants.  In 2006, however, the 
sampling used individuals rather than families, allowing "young 
women and old grandmothers" equal chance to participate.  Due to 
the change in sample, Zhu noted that the illiteracy rate among 
the participants jumped to 14 percent.  Third, the 16 small 
groups were divided into two categories.  Six of the groups were 
run as in 2005.  In the other 10, however, the chairman took an 
active devil's advocate role, encouraging the participants to 
look at the projects from every possible angle. 
 
 
SHANGHAI 00007139  004.2 OF 005 
 
 
-------------------------- 
Provincial Leaders Give OK 
-------------------------- 
 
¶17.  (C) Zhu noted that the officials involved in the program 
were all very pleased with its success.  The Zeguo Party 
Secretary, in particular, was happy with the results, since it 
 
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gave him a good excuse to turn down bad programs being pushed at 
him by corrupt superiors and others.  The officials also said 
that it kept problems associated with the implementation of 
these projects down, since the projects were suggested by a 
group that supposedly represented the general population's 
interests. 
 
¶18.  (C) According to Professor Chen, the provincial leadership 
was on board with these reforms.  The Taizhou Mayor and Party 
Secretary had both praised the Zeguo experiment, as had the 
 
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Zhejiang Provincial People's Congress.  Zhejiang Party Secretary 
Xi Jinping visited Wenling in 2005 and applauded the minkenhui 
activities, particularly the Zeguo experiment. 
 
----------------------- 
Limits on the Love-fest 
----------------------- 
 
¶19.  (C) Although all observers and participants of the program 
Poloff spoke with had nothing but praise for the Zeguo 
experiment, Zhu raised several potential problems for the 
program's continuation or expansion and limits on its impact on 
China's democratization.  First, the minkenhui process itself 
was quite expensive.  The 2005 minkenhui cost Zeguo 100,000 RMB 
to host.  While the township was able to trim costs to 50,000 
RMB in 2006, Zhu said township officials estimated that was the 
bare minimum needed to convene such a meeting.  Although the 
Zeguo leaders felt this was a small price to pay for social 
harmony, Zhu doubted that poorer towns or villages could afford 
to host such an event, regardless of its benefits. 
 
¶20.  (C) Second, was the issue of control.  Although Zeguo's 
experience had been positive to date, Zhu asked what would 
happen if the people's budgetary priorities clashed with the 
desires of the leadership?  He said that in practice, this 
process took away some of the authority of the People's Congress 
and put it in the hands of the people.  By thus empowering the 
people, it would be very difficult to overrule the budget 
proposals put forward by the minkenhui without risking social 
instability. 
 
¶21.  (C) Third, Zhu noted that much of the success of the Zeguo 
experience was due to Zeguo Party Secretary Jiang Zhaohua. 
Jiang was a promising young official in Beijing but quit his job 
so he could return to his hometown.  Jiang was not interested in 
promoting himself and understood that with power came 
responsibility.  He was one of the rare officials who was 
willing to share his power with the people he served.  Zhu 
speculated that if a different person were in charge--one given 
to graft or power seeking--then the Zeguo experiment would 
ultimately fail.  Not all leaders were willing to cede even part 
of their authority to the public. 
 
¶22.  (C) At the May workshop, Chen disputed this notion, arguing 
that the "political ecology" in Wenling was gradually changing 
and that public awareness of democracy was increasing so that 
even with a change in personnel, reforms would continue to move 
forward.  At the same meeting, however, Qinghua University 
Professor of Public Administration and Vice President of the NGO 
Studies Institute Jia Xijin argued that to protect the budding 
reforms, current practices needed to be institutionalized, 
including: the public's right to information; the right to 
participate and express opinions; the right to supervise; and 
codified voting procedures, including shifting from a raise of 
hands to vote by secret ballot. 
 
¶23.  (C) Finally, Zhu said, although it had made real 
breakthroughs in returning power to the people, the Zeguo 
experiment needed to be viewed in perspective.  Only a part of 
the budget there was open to public review.  Zhu said that there 
were no plans at present to allow people to introduce items on 
the budget, noting that people were only allowed to discuss what 
the government had already put forward as its priorities. 
 
---------------------------------------- 
Pushing "Consultative Democracy" Forward 
---------------------------------------- 
 
SHANGHAI 00007139  005.2 OF 005 
 
 
 
¶24.  (C) According to Zhou, Zeguo was advancing a form of 
"consultative democracy" (xieshang minzhu), or "participatory 
democracy" (canyu minzhu).  In Chinese consultative democracy, 
the people, through a representative body, were able to 
participate in the decision-making process, although not able to 
necessarily make decisions.  She said that China's current 
official consultative body was the Chinese People's Political 
Consultative Conference (CPPCC), an advisory body designed to 
legitimize Communist Party rule by allegedly giving voice to 
"grass roots" interest groups (Ref A).  The Zeguo experiment, 
however, was moving the representative group beyond the 
consulting role and empowering it with direct influence over the 
government. 
 
¶25.  (C) Zhou said that the Central Government was taking an 
active interest in studying Zeguo's experiment.  Beijing was 
using the Central Editing and Translation Bureau (ETB) 
(zhongyang bian yi ju)--originally set up to retranslate the 
works of Marx and Engels as part of the Marxist Revival campaign 
(Ref B)--to examine Zeguo's reforms.  Heading the effort was 
liberal scholar and Director of Beijing University's Center for 
Comparative Politics and Economics Yu Keping, whom Zhou 
described as being "trusted" by President Hu Jintao.  Liberal 
scholar He Zhengke was also involved in the research project. 
According to Zhou, the ETB liked what was happening in Zeguo and 
was promoting the line that China needed to more broadly 
implement participatory democracy to allow for multiple views 
and voices to be heard. 
 
¶26.  (C) According to Zhou, the ETB recently published a book 
called "Participation is Democracy" (Canyu Shi Minzhu) 
describing the participatory budget experiments that had been 
carried out in Brazil's Porto Alegre.  Zhou said that the Zeguo 
experiment had been loosely based on the Porto Alegre model. 
(Note.  According to press reports, the Porto Alegre model was 
first developed in 1989 and utilized a system of community 
meetings where local democratically elected representatives 
worked to prioritize infrastructure needs identified by the 
city.  The representatives, in conjunction with the municipal 
government, developed a budget plan and an investment and 
services plan, which they submitted to the mayor and city 
council for approval.  End note.) 
 
------------------- 
Comment: Baby Steps 
------------------- 
 
¶27.  (C) The Zeguo experiment is one of the only efforts the 
Consulate has heard of to genuinely empower the people at the 
expense of governmental authority.  As Professor Zhu rightly 
pointed out, however, these steps are small when compared to the 
progress that Chinese political reformers would like to see. 
Moreover, the Zeguo model, while technically legal, was not 
codified in the official bureaucratic decision-making structure, 
and hence is potentially subject to the whims of the officials 
in power. 
JARRETT