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Viewing cable 07CHENGDU30, SOUTHWEST CHINA LEADERSHIP CHANGES FROM THE "PRINCELING"

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Reference ID Created Released Classification Origin
07CHENGDU30 2007-01-31 08:22 2011-08-30 01:44 CONFIDENTIAL Consulate Chengdu
VZCZCXRO3283
RR RUEHCN RUEHGH
DE RUEHCN #0030/01 0310822
ZNY CCCCC ZZH
R 310822Z JAN 07
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2364
INFO RUEHBJ/AMEMBASSY BEIJING 1219
RUEHGH/AMCONSUL SHANGHAI 0673
RUEHSH/AMCONSUL SHENYANG 0641
RUEHGZ/AMCONSUL GUANGZHOU 0663
RUEHHK/AMCONSUL HONG KONG 0685
RUEHIN/AIT TAIPEI 0583
RUEHGP/AMEMBASSY SINGAPORE 0018
RUEHKO/AMEMBASSY TOKYO 0044
RUEHUL/AMEMBASSY SEOUL 0038
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 2859
C O N F I D E N T I A L SECTION 01 OF 03 CHENGDU 000030 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/CM AND INR 
 
E.O. 12958: DECL:  1/31/2032 
TAGS: PGOV ECON PINR CH
SUBJECT: SOUTHWEST CHINA LEADERSHIP CHANGES FROM THE "PRINCELING" 
PERSPECTIVE 
 
REF: A) 06 CHENGDU 1262    B) 06 CHENGDU 1016 
 
CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate 
General , Chengdu. 
REASON: 1.4 (b), (d) 
 
 
 
CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate 
General , Chengdu. 
REASON: 1.4 (b), (d) 
 
 
 
1. (C) Summary:  Discussing the prospects of key local 
government leaders, a well-connected Congen contact suggested it 
is possible Chengdu Party Secretary Li Chuncheng's promotion 
hopes could be somewhat dented due to real estate-related 
corruption in the city.  New Sichuan Party Secretary Du Qinglin 
and Acting Governor Jiang Jufeng are well-respected managers, 
were purposely chosen by Beijing as provincial outsiders, and 
are likely to be careful in going about any administrative 
changes.  According to Deng Xiaoping nephew Zhang Haijiang, much 
of his family's real estate concerns are focused in Guangdong or 
Hainan in southeast China.  Stories told by both Congen contact 
and Zhang appear indicative of the often thin line separating 
local business and government interests.  End Summary. 
 
 
-------------------------------- 
Privileged Background 
-------------------------------- 
 
2. (C) At the fringes of a recent reception held in Chongqing, a 
local contact shared his thoughts on high-level personnel 
changes and political developments within Sichuan Province and 
the centrally-administered Chongqing municipality.  Speaking to 
the CG tete-a-tete in a large banqueting hall holding several 
hundred people with loud music blasting from a floor show in the 
background, our contact said one could fairly describe him as 
having been raised as a "taizi" or "princeling," a child of a 
former high ranking government official with access to special 
perks and privileges.  Although our contact went on to study in 
the United States and became an American citizen, he returned to 
China to run a US-based business and tries to keep informed 
about the direction of government policies through his father 
who still lives in Beijing. 
 
3. (C) Our contact indicated his father used to head one of 
China's state banks and is partnered with former Foreign Trade 
and Economic Cooperation (MOFTEC) Assistant Minister and WTO 
negotiator Long Yongtu, as well as several other retired 
officials, at a Chinese venture capital fund.  Long, currently 
the Secretary General of the Boao Forum for Asia, is the 
principal manager of the fund which he handles for the most part 
out of an office in Hainan.  Our contact said his father and his 
father's friends "hate" the Communist Party, but love China and 
take pride in its economic accomplishments.  While apparently 
oblivious to the inherent irony of the situation, our contact 
also noted his father did everything possible to ensure his 
children were educated overseas and acquired foreign passports. 
Our contact's sister has spent most of her adult life in Europe. 
 
----------------------------------- 
Chengdu and Chongqing 
----------------------------------- 
 
4. (C) Just back from Beijing on a visit to his father, our 
contact said that Chengdu Party Secretary Li Chuncheng had also 
traveled recently to the capital where he lobbied to be promoted 
out of the current job that he has held for close to four years 
and be given a provincial governorship, preferably in northeast 
China where he began his early career.  Our contact noted that, 
although he has performed well in Chengdu, Li feels he has been 
unable to develop a strong local power base and is ambitious for 
greater responsibilities.  The father of our contact told him it 
is unclear what onward assignment Li will be given, but it is 
quite possible he will have to make do with a deputy 
governorship, especially since he has been tainted by a local 
real estate corruption scandal (see ref b).  Li's overall 
 
CHENGDU 00000030  002 OF 003 
 
 
competence, ability to get things done and implement policies 
efficiently, however, has not gone unnoticed and is appreciated 
in Beijing.  Our contact said he did not know what position 
Chengdu Mayor Ge Honglin -- a Shanghai native and former head of 
the Baogang Iron and Steel Group -- is likely to end up with, 
but indicated Ge is also considered an effective administrator. 
 
5. (C) In Chongqing, our contact continued, Party Secretary and 
Anhui native Wang Yang is capable and competent and has the 
support of Hu Jintao.  Appointed to his position a little over a 
year ago, however, the challenges faced by Wang of trying to run 
the Chongqing municipality -- an area that includes a massive 
rural population and poor families resettled from the Three 
Gorges project -- are immense.  Chongqing Mayor Wang Hongju, a 
hometown boy, is popular with local officials. 
 
----------------------------------- 
Provincial-Level Leaders 
----------------------------------- 
 
6. (C) Our contact remarked his father has known Sichuan's new 
Acting Governor Jiang Jufeng, who was just promoted on January 
24 from the province's executive deputy governor slot, for over 
twenty years and views him to be someone who is flexible and 
easy to work with.  While not considered "brilliant," our 
contact continued, Jiang has a reputation for "steady 
dependability."  As a Zhejiang native and former Wenzhou Party 
Secretary, Jiang is likely to prove more independent of "local 
 
SIPDIS 
interests" than his predecessor, Sichuan native Zhang Zhongwei. 
(Note: One of Jiang's assistants told CG at a December banquet 
that his boss would likely be promoted to governor as he had 
already proven himself working in Sichuan, but was not himself 
from Sichuan.  The assistant commented the Central Government 
almost always prefers to have non-locals in top provincial 
slots.  End note.) 
 
7. (C) According to our contact, Sichuan Party Secretary Du 
Qinglin, formerly China's Minister of Agriculture, appears for 
now to be keeping a low profile and has made few public 
appearances.  Just appointed in December 2006, Du is of course a 
Hu Jintao loyalist.  His predecessor, Zhang Xuezhong, however, 
was very close to Hu and had a personal relationship with him 
dating back to the 1980's.  Du, therefore, may need to be 
careful not to proceed too quickly with any desired changes in 
Sichuan's administration. 
 
------------------------ 
The Deng Family 
------------------------ 
 
8. (C) During a separate conversation at yet another recent 
banquet, Deng Xiaoping nephew Zhang Haijiang claimed to CG he 
knows little about the new provincial party secretary.  He 
volunteered, however, that he greatly admires Chengdu Party 
Secretary Li's efforts to promote growth and economic 
 
SIPDIS 
opportunities in the city.  Zhang, the son of Deng Xiaoping 
younger half-sister Deng Xianfu, observed "business has been 
good" under Li.  At the same time, however, Zhang observed that 
during the last eight months or so it has been increasingly 
difficult to purchase lots for real estate development projects 
in the city.  In fact, Zhang and his partners decided to pull 
out of one major property deal that appeared to be held up 
indefinitely.  Currently the general manager of the Huayue Real 
Estate Development Company in Guangzhou, Zhang said he spends 
most of his time in southern China and is particularly 
interested in Shenzhen and Hainan where his firm has been 
responsible for a number of luxury property developments. 
 
9. (C) Noting his mother lives much of the year in Hainan, Zhang 
said she is closely involved in a number of her own business 
ventures.  Xie Shijie, former Sichuan Party Secretary during the 
mid-1990's, also lives in Hainan and helps to manage investments 
made by Zhang's mother.  (Note: CG has met  Zhang's elderly 
mother and doubts she herself could play any kind of active 
management role in a business other than to serve as a figure 
head.  End note).  Zhang said he is disappointed that his son, 
who recently graduated from Carnegie Mellon University and also 
went to high school in the United States, has had difficulty 
finding work he likes in China and is thinking about returning 
 
CHENGDU 00000030  003 OF 003 
 
 
to the US for graduate study.  Zhang is trying to convince him 
to at least try working in Hong Kong first.  Zhang's daughter is 
a student in Santa Barbara and the family has purchased a large 
home there. 
 
---------------- 
Comments 
---------------- 
 
10. (C) When a city like Chengdu undergoes the kind of rapid 
transformation and building boom it has had during the last few 
years under Party Secretary Li's tenure, access to the most 
prime plots of land is naturally a potential source of both huge 
profit and temptation.  Commenting that most of Singapore's USD 
400 million of FDI in Sichuan Province is related to real estate 
investments, the Singapore Consul General told us recently his 
country's firms have also noticed a bit of a government slowdown 
within the last few months on licenses to develop property in 
Chengdu.  Post speculates that Chengdu Party Secretary Li, with 
his promotion perhaps on the line, may have called for at least 
a temporary timeout. 
BOUGHNER