VZCZCXRO6321
RR RUEHCN RUEHVC
DE RUEHGH #0213/01 1060745
ZNY CCCCC ZZH
R 160745Z APR 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5691
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6073

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000213 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/CM, INR/B AND INR/EAP 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE 
TREAS FOR OASIA - DOHNER/CUSHMAN 
USDOC FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN 
NSC FOR WILDER AND TONG 
 
E.O. 12958: DECL:  X1 MR 
TAGS: PGOV PINR EINV ECON CH
SUBJECT: EAST CHINA CONTACTS ON LEADERSHIP GOSSIP 
 
REF: SHANGHAI 101 
 
SHANGHAI 00000213  001.2 OF 003 
 
 
CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate, 
Shanghai, Department of State. 
REASON: 1.4 (b), (c), (d) 
 
 
 
¶1.  (C) Summary.  Shanghai Party Secretary Xi Jinping, Jiangsu 
Party Secretary Li Yuanchao, Liaoning Party Secretary Li 
Keiqang, and Trade Minister Bo Xilai are emerging as the public 
face of the Fifth Generation of the Chinese leadership.  Two 
East China contacts believed that of the four, Li Yuanchao stood 
the best chance of getting promoted to the Politburo Standing 
Committee and eventually replacing Hu Jintao as Party Secretary. 
 While frequently mentioned as the leading candidate to replace 
Hu, Li Keqiang was tainted by rumors of corruption due to his 
having served in some of China's most corrupt provinces.  Li 
Yuanchao, on the other hand, was virtually free of such rumors. 
Although he had a reputation for using people, Bo Xilai was 
deemed the odds on favorite to replace Wu Yi on the Politburo as 
Vice Premier responsible for  trade issues.  Meanwhile, Xi 
Jinping's personal life was the subject of much speculation, 
with rumors circulating about a pending divorce from his 
superstar wife.  One contact noted that, with important 
leadership changes pending, President Hu was still resistant to 
the idea of reconvening the Party's traditional back-room deal 
making this summer at the seaside resort of Beidaihe to 
facilitate the decision-making process.  Vice President Zeng 
Qinghong had organized his own meetings at Beidaihe last year 
and had been taken to task for it by several party elders.  End 
summary. 
 
¶2.  (C) This message summarizes views on leadership issues 
expressed by a range of contacts over separate meetings, 
including: a March 23 discussion with Nanjing University 
Professor Gu Su; an April 6 meeting with Nanjing Party School 
Foreign Affairs Office Director Dou Ruilin; an April 12 
discussion with Fudan University Journalism graduate student Lu 
Lei; and a March 25 discussion with Zhejiang High Court judges. 
 
----------------------------- 
The Four Great Heavenly Kings 
----------------------------- 
 
¶3.  (C) During the April 12 discussion with Poloff, Fudan 
University graduate student Lu Lei said that Chinese, Taiwan, 
and Hong Kong press, as well as local Bulletin Board System 
(BBS) users all referred to Shanghai Party Secretary Xi Jinping, 
Jiangsu Party Secretary Li Yuanchao, Liaoning Party Secretary Li 
Keiqang, and Trade Minister Bo Xilai as the rising political 
stars of the Fifth Generation.  Although none were currently on 
the Politburo, the four had been dubbed the "Four Great Kings of 
Heaven" (si da tian wang), a play on the same title given to 
four male superstar Canto-pop singers.  Lv noted it was also 
widely discussed how at least three of the four--Xi, Bo, and Li 
Yuanchao--were members of the so-called "princeling faction." 
 
---------------------------------------- 
Li Yuanchao: Same Story, Different Twist 
---------------------------------------- 
 
¶4.  (C) During the April 6 meeting, Nanjing Party School Foreign 
Affairs Office Director Dou Ruilin told Political Assistant FSN 
that with Xi's move to Shanghai, Li Yuanchao's transfer to 
Beijing was a done deal.  Dou said that Li would move to Beijing 
"soon" to assume responsibility for propaganda.  Dou was 
confident that Li would also be in line for a slot on the 
Politburo Standing Committee (PBSC) at the 17th Party Congress 
and would be designated as Hu Jintao's successor.  (Comment: It 
was unclear if Dou meant that Li would fill a slot on the PBSC 
being vacated by Li Changchun, who currently holds the overall 
propaganda portfolio, or if he would take over from Liu Yunshan 
as head of the Propaganda Department.  Either way, if Li 
Yuanchao--who has a reputation for openness and allowing the 
media greater freedoms in Jiangsu--does take over propaganda, it 
will likely be a positive thing for China's press.  End comment.) 
 
¶5.  (C) During the March 23 discussion, Nanjing University 
Professor Gu Su said that of the current provincial front 
runners, Li Yuanchao had the best odds of getting a seat on the 
PBSC.  He noted that Liaoning Party Secretary Li Keqiang--the 
other most frequently cited candidate--had served in some 
"problematic" places like Hunan and Liaoning that had long been 
tainted by the stain of corruption.  Gu said that as a result, 
 
SHANGHAI 00000213  002.2 OF 003 
 
 
there were sometime disparaging remarks made and unflattering 
stories told about Li Keqiang.  Li Yuanchao, on the other hand, 
was rarely, if ever, bad mouthed by colleagues or the people. 
Like Dou, Gu also thought Li Yuanchao had a good chance of being 
named as Hu's successor. 
 
¶6.  (C) Gu said that if Li were promoted, he expected Nanjing 
University Party Secretary Hong Yinxing to go to Beijing with 
him.  Hong, an economist by training, was formerly the dean of 
Nanjing University's Business School.  Hong had earned his 
Masters at Nanjing University and his PhD at People's University 
and had studied under planned economy guru Liu Guoguang.  Hong 
was close to Li and would "do what Li asks."  Hong had, for 
instance, helped Li independently organize a press conference at 
the March People's Congress and helped Li organize twice-a-year 
symposiums at Nanjing University.  Gu and Hong were classmates 
during their stints at Nanjing University and Gu assessed Hong 
to be neither "too conservative" nor "too liberal." 
 
---------------------------------------- 
Change of Guard in the Trade Bureaucracy 
---------------------------------------- 
 
¶7.  (C) According to Professor Gu, Vice Premier Wu Yi would be 
replaced by Trade Minister Bo Xilai.  Wu, Gu said, really did 
not want to step down, but would have little choice.  Hu had 
supported promoting Wu to the Politburo Standing Committee at 
the last Party Congress but was blocked by Jiang Zemin, who for 
an unknown reason opposed Wu's continued ascent.  Gu said Bo had 
a reputation for using people and trading on his father's name. 
(Note: Bo's father is party elder Bo Yibo.  End note).  Bo could 
also be vindictive.  Gu noted that when Bo was serving in 
Liaoning, he had a Hong Kong journalist sentenced to eight years 
in prison for "business wrong doings" after the reporter wrote 
an unflattering article about Bo, his wife, Bo's family ties, 
and Bo's policies.  Pettiness aside, Gu said Bo was "quite 
liberal" in his views, was "typical" of the open-mindedness of 
graduates of Beijing University, and was very concerned about 
foreigners' views of China.  Gu assessed that Bo's policy 
orientation was much more open than that of Premier Wen Jiabao. 
He noted that Bo's father had also held very liberal views. 
 
--------------------------------------------- -------- 
Xi Jinping: Marital Troubles?  What Marital Troubles? 
--------------------------------------------- -------- 
 
¶8.  (C) During a March 25 discussion with FSN Rule of Law 
Coordinator, Zhejiang High Court judges reported rumors that Xi 
was preparing to divorce his wife, Peng Liyuan.  According to Lu 
Lei, Peng is a famous singer with a PLA troupe who resides in 
Beijing.  Lu said that the rumors of Xi's divorce had spread 
rapidly along the Fudan University BBS when Xi was named as 
Shanghai Party Secretary.  She believed these were based in part 
on the couple's long-standing long-distance relationship.  She 
said that shortly after these rumors appeared, Chinese media 
published an account of the couple's love for each other, 
explicitly stating that after the birth of their daughter, the 
couple's "feelings for each other stabilized."  She said several 
netizens posted entries questioning why the media needed to 
clarify that their feelings for each other had stabilized.  They 
speculated that perhaps Xi's marriage had been rocky in the 
past, but had since resolved itself, or that the reference to 
marital bliss was an indication that things perhaps were still 
rocky.  Lu noted that such postings quickly disappeared and that 
there was currently no speculation on Xi's family situation on 
the BBS.  She said that Xi's daughter was about 18 years old and 
studying in college, although she was not sure where. 
 
------------------------------------ 
No Beidaihe; Zeng Called to the Mats 
------------------------------------ 
 
¶9.  (C) Gu reiterated that he expected the political infighting 
to heat up this summer (Reftel), especially over remaining top 
positions in Shanghai, Zhejiang, and Jiangsu.  Gu said he did 
not believe that Hu planned to reconvene the traditional 
Beidaihe leadership conference this summer, despite that venue's 
traditional role as a vehicle to facilitate personnel moves in a 
more relaxed atmosphere.  He said that last year, Vice President 
Zeng Qinghong had organized his own leadership meetings at the 
seaside resort at party elder Jiang Zemin's behest.  Jiang had 
wanted a forum to discuss personnel moves in the run up to the 
Party Congress as well as economic policy.  However, the 
meetings turned out to be "a disaster" for Zeng, with several 
 
SHANGHAI 00000213  003.2 OF 003 
 
 
party elders criticizing Zeng for trying to roll back 
transparency.  The meetings were also divisive, with some top 
leaders, like Vice Premier Huang Ju, attending and others, like 
legislative chief Wu Bangguo, staying away to avoid being tarred 
as a "splitist."  Gu said that there were many people within the 
party who compared last year's Beidaihe fiasco to the infamous 
"Lushan Conferences" held by Mao Zedong.  Gu said that Mao had 
convened three conferences at Lushan, each marked by a violent 
power struggle and each a disaster for the party. 
JARRETT