VZCZCXRO0984
RR RUEHGH
DE RUEHGH #0065/01 0290856
ZNY CCCCC ZZH
R 290856Z JAN 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5490
INFO RUEHBJ/AMEMBASSY BEIJING 0787
RUEHGZ/AMCONSUL GUANGZHOU 0408
RUEHHK/AMCONSUL HONG KONG 0525
RUEHSH/AMCONSUL SHENYANG 0431
RUEHIN/AIT TAIPEI 0361
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 5841

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000065 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/CM, INR/B, AND INR/EAP 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE 
TREA FOR OASIA - DOHNER/CUSHMAN 
USDOC FOR ITA/MAC - A/S MELCHER, MCQUEEN 
 
E.O. 12958: DECL:  1/29/2017 
TAGS: PGOV PINR ECON CH
SUBJECT: 2007 SHANGHAI MUNICIPAL PEOPLE'S CONGRESS MEETING 
 
 
CLASSIFIED BY: Simon Schuchat , Principal Deputy Officer,  , 
U.S. Consulate Shanghai. 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (SBU) Summary: The work reports delivered at the opening 
sessions of 2007 Shanghai Municipal People's Congress (SMPC) and 
Shanghai Municipal Chinese People's Political Consultative 
Conference (CPPCC) on January 28 and 27, respectively, 
emphasized the need to fight corruption and improve 
transparency.  The reports touched on Shanghai's pension scandal 
and supported the government's investigation of Chen Liangyu. 
The SMPC report also noted Shanghai's continued double-digit 
economic growth and efforts to improve infrastructure.  2007 
priorities included fostering a service-based economy, 
supporting innovation, protecting IPR, improving energy 
consumption, increasing social services and creating more jobs. 
The SMPC report clearly supported President Hu Jintao and was 
littered with references to Hu's "Four Leads" and "Four Centers" 
initiatives, which urged that Shanghai take the lead in reform 
and become an economic, financial, trade and shipping center, 
respectively.  End Summary. 
 
 
 
--------------- 
 
Accomplishments 
 
--------------- 
 
 
 
¶2.  (U) The opening sessions of Shanghai Municipal CPPCC and 
SMPC took place in Shanghai on January 27 and 28, respectively. 
Shanghai Acting Party Secretary and Mayor Han Zheng delivered 
the municipal government's work report to the SMPC.  The report 
listed many of Shanghai's accomplishments, many of which were in 
the economic field.  For the fifteenth year in a row, Shanghai's 
GDP had double-digit growth and increased by 12 percent in 2006 
to 1,029.7 billion RMB.  The Consumer Price Index (CPI) rose by 
1.2 percent and there was a 13 percent growth in total retail 
consumer goods sales.  Per capita disposable income increased by 
10.8 percent in urban areas and 10.4 percent in rural areas. 
Total fixed-asset investment also grew by 10.8 percent and 
exports surged by 25.2 percent. 
 
 
 
¶3.  (U) Acting Party Secretary Han noted that the local 
government also took measures to improve the environment and 
increased per capita public space to 11.5 square meters. 
Infrastructure improvements included the completion of the 
Yangshan Deepwater Port and the extension of subway lines.  As 
for social services, the local government accelerated the 
development of elderly care services, adding 10,200 beds in 
institutional care facilities and providing an additional 59,600 
elderly persons with access to subsidized home-based care.  It 
also implemented a basic medical insurance system for pre-school 
children and primary and middle school students that covered 
1,800,000 minors in Shanghai. 
 
 
 
------------------- 
 
Priorities for 2007 
 
------------------- 
 
 
 
¶4.  (U) 2007's priorities were in three categories: economic 
development, building a harmonious society, and building a 
better government.  Under economic development, the government 
vowed to "put the service sector higher on the agenda" and work 
towards a "more sophisticated service sector."  It aimed to make 
Shanghai into an international financial center as well as a 
shipping center.  Han also emphasized the importance of 
 
SHANGHAI 00000065  002 OF 003 
 
 
innovation and said that the local government would cultivate a 
"pro-innovation" climate which would protect IPR.  Protecting 
the environment and energy and resource conservation were also 
listed as priorities. The government vowed to step up 
preparations for the 2010 World Expo and the 2007 Special 
Olympics. 
 
 
 
¶5.  (U)  As for building a harmonious society, the report 
emphasized the importance of improving education, increasing 
employment opportunities for the unemployed and improving social 
services for the elderly.  The government would also take 
measures to improve community building including supporting the 
development of grassroots democracy and grassroots governance. 
 
 
 
--------------------------------------------- ----- 
 
Building a Better Government: Fighting Corruption, Increasing 
Supervision 
 
--------------------------------------------- ------ 
 
 
 
¶6.  (U) The "building a better government" set of priorities 
focused on the need to fight corruption and increase 
transparency.  Mayor Han noted the Chen Liangyu scandal and said 
that the investigation and the handling of the severe 
disciplinary actions against "Comrade" Chen Liangyu demonstrated 
the government's commitment to fighting corruption.  The 
government promised strict oversight of cadres and government 
agencies.  It would also crack down on corporate bribery and on 
government personnel who used their position for unlawful gains 
and accepted bribes.  It also promised to increase transparency 
by making more information available and enhancing the 
government website and press spokesman system. 
 
 
 
¶7.  (SBU)  Finally, Mayor Han warned that all government 
personnel must firmly embrace "a correct understanding of how 
the Government's performance should be appraised."  Government 
cadres must work for the people and "be mindful of the harms of 
greed and constantly alert to the need for self-discipline."  It 
said, "We must be a government that truly serves the people, is 
accountable to the people, is supervised by the people, and 
satisfies the people."  The text of the paragraph of the report 
appeared on the big-screen televisions.  In addition, Mayor Han 
Zheng appeared to be reciting this section from memory.  While 
he read most of the report, he appeared more animated in his 
delivery of this section. 
 
 
 
--------------------- 
 
Support For Hu Jintao 
 
--------------------- 
 
 
 
¶8.  (SBU) Mayor Han concluded by calling for cadres to unite 
closely around President Hu Jintao and push forward with the 
"Four Leads" and "Four Centers" initiatives.  According to the 
report, the "Four Leads" vision calls for Shanghai to take the 
lead in transforming the economic growth model, enhancing 
independent innovative capacity, advancing reform and 
opening-up, and building a socialist harmonious society.  The 
"Four Centers" called for building Shanghai into an 
international economic, financial, trade and shipping center. 
The "Four Centers" concept was a part of the 11th Five-Year plan 
and mentioned in last year's work report.  According to this 
year's report, President Hu Jintao established the "Four Leads" 
vision for Shanghai. 
 
 
 
SHANGHAI 00000065  003 OF 003 
 
 
 
--------------------- 
 
Shanghai CPPCC Report 
 
--------------------- 
 
 
 
¶9.  (U) The Shanghai CPPCC Report, delivered on January 27, also 
touched on the Chen Liangyu scandal.  Jiang Yiren, Chairman of 
the Municipal CPPCC, also urged that cadres receive more 
training to improve their ability to govern.  Popular opinion, 
expressed through the CPPCC, wanted the government to focus on 
solving the problems of job creation, traffic congestion, 
creating affordable housing and increasing access to medical 
care. 
 
 
 
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Comment 
 
------- 
 
 
 
¶10.  (C) While there was appropriate applause during the 
speeches, the crowd was not especially enthused during the 
meetings and there was no real reaction to the mention of the 
Chen Liangyu.  That Chen continues to be called a "Comrade" 
suggests that his case has not been concluded and he retains, 
for the moment at least, his party membership.  Since the 
municipal government's report was intended for Beijing as much 
as it was for any member of the audience, we suppose that 
Shanghai has adequately demonstrated its loyalty to the center. 
Mayor Han was visibly sick but soldiered on for nearly two hours 
so as to not miss the opportunity to demonstrate to Beijing his 
loyalty to the center. 
JARRETT