VZCZCXRO7327
RR RUEHCN RUEHGH
DE RUEHGH #0641/01 2730326
ZNY SSSSS ZZH
R 300326Z SEP 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6313
INFO RUEHBJ/AMEMBASSY BEIJING 1447
RUEHCN/AMCONSUL CHENGDU 0908
RUEHGZ/AMCONSUL GUANGZHOU 0887
RUEHHK/AMCONSUL HONG KONG 1034
RUEHSH/AMCONSUL SHENYANG 0909
RUEHIN/AIT TAIPEI 0728
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6795

S E C R E T SECTION 01 OF 02 SHANGHAI 000641 
 
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, WRIGHT 
USDOC FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN 
NSC FOR WILDER AND TONG 
 
E.O. 12958: DECL:  X1 MANUAL REVIEW 
TAGS: PGOV PINR ECON SOCI CH
SUBJECT: PBSC UNRESOLVED; HU FLEXING HIS POLITICAL MUSCLES 
 
REF: SHANGHAI 662 
 
SHANGHAI 00000641  001.4 OF 002 
 
 
CLASSIFIED BY: Simon Schuchat, Deputy Prinicpal Officer, U.S. 
Consulate , Shanghai . 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) Reflecting the rapidly shifting trends on the ground, 
Shanghai contacts present differing accounts of top-level 
decision making on Communist Party personnel issues four and 
three weeks before the 17th Party Congress.  Our contacts are 
divided over whether Vice President Zeng Qinghong, Premier Wen 
Jiabao, National People's Congress Chairman Wu Bangguo, and 
propaganda chief Li Changchun will remain on the Politburo 
Standing Committee (PBSC).  Thus far, the only current PBSC 
member that all Shanghai contacts agree will remain in place is 
President Hu Jintao.  Perennial favorites Liaoning Party 
Secretary Li Keqiang, and Organization Department Head He 
 
SIPDIS 
Guoqiang remain on the recent roster.  One contact pointed out 
that Hubei Party Secretary Yu Zhengsheng, often a name mentioned 
as a PBSC candidate, may not be able to overcome his past to get 
the promotion; his brother, a former government official, 
defected to the United States in the late 1980s.  End summary. 
 
------------------------------------------- 
Questions Linger About Current PBSC Leaders 
------------------------------------------- 
 
¶2.  (S) During a September 17 discussion, Shanghai Municipal 
People's Congress (MPC) Researcher Zhou Meiyan said that 
according to information she had heard from well-connected 
scholars at a meeting the night before, National People's 
Congress (NPC) Chairman Wu Bangguo will retire.  This news has 
caused much rejoicing among her MPC colleagues who dislike Wu 
for his conservatism and unwillingness to press for the NPC or 
local People's Congresses to move outside of their rubber stamp 
roles.  She also heard that Vice President Zeng Qinghong will 
definitely be staying on, leaving Hu, Wen, and Zeng as the 
current PBSC members to be retained at the Party Congress. 
 
¶3.  (S) Contrary to Zhou, Internet entrepreneur Tang Haisong 
during a September 19 discussion said he had recently heard from 
a friend who works in the State Council that Premier Wen is 
going to step down.  Wen has made many enemies over his handling 
of the economy.  Like many people in his position, Tang was none 
too happy with Wen's handling of the economy. 
 
¶4.  (C) During a September 20 discussion, Shanghai Institute of 
International Studies Director of Strategic Studies Institute 
--and former military officer--Xia Liping said that the four top 
PBSC members would remain in position.  In particular, he thinks 
it unlikely that Zeng will step down. 
 
¶5.  (C) During a separate September 20 discussion, Dean of 
Jiaotong University's International and Public Affairs School Hu 
Wei opined that Hu, Wu Bangguo, and Wen will all be staying on. 
He added that Wen is the "most liberal and open minded" member 
of the PBSC and the most inclined towards political reform.  He 
also believes it unlikely that propaganda chief Li Changchun 
will step down.  It would be too blatant a power play to try and 
remove Li over any sort of illness so long as he is continuing 
to function.  (There are rumors Li Changchun has cancer; see 
reftel.)  More likely, Li will be kept in place but marginalized 
and made ineffective.  For instance, Li would no longer receive 
the documents he ought to see or be invited to meetings he 
otherwise ought to attend. 
 
------------------ 
We're Moving On Up 
------------------ 
 
¶6.  (C) Professor Hu further said on September 20 that he 
believes the PBSC roster will be reduced from nine members to 
seven at the October Party Congress, and that the party will 
hold fast to the "seven-up, eight-down rule" established at the 
last Party Congress in 2002.  In addition to Hu, Wen, Wu 
Bangguo, and Li Changchun, Liaoning Party Secretary Li Keqiang 
and Organization Department head He Guoqiang will be joining the 
 
SHANGHAI 00000641  002.3 OF 002 
 
 
lineup.  He did not say who he thought the seventh member will 
be. 
 
¶7.  (C) Professor Hu had a mixed assessment of Hubei Party 
Secretary Yu Zhengsheng's prospects for promotion to the PBSC. 
 
SIPDIS 
He noted that in the 1980s, Deng Xiaoping had hand-picked Yu as 
a future Premier.  Yu, at the time, worked with Deng's elder 
son, Deng Pufang, at the Kanghua Corporation.  However, in the 
late 1980s, Yu's older brother, who worked in either the 
Ministry of State Security or the Ministry of Public Security, 
defected to the United States, effectively killing Yu's career. 
Although Yu eventually made a comeback of sorts, Professor Hu 
wonders if Yu will be able to cast off the shadow of his 
brother's "treason." 
 
¶8.  (C) Professor Hu said that Minister of Commerce Bo Xilai, 
and President Hu proteges Jiangsu Party Secretary Li Yuanchao 
and head of the United Front Work Department Liu Yandong are all 
heading for slots on the Politburo.  Hu protege Ling Jihua, 
recently promoted to be Director of the Party's General Office, 
is also a probable candidate. 
 
------------------------------------- 
Hu: Great Wisdom That Appears Foolish 
------------------------------------- 
 
¶9.  (C) Professor Hu was amused by observers who underestimate 
President Hu's political strength.  Throughout history, the most 
effective Chinese politicians have been Daoists, not Confucians, 
and President Hu is more the former.  President Hu's career 
strategy is based on "using the soft to overcome the hard" (yi 
ruo ke gang) and hiding his strengths.  Hu is an example of 
"great wisdom under the guise of foolishness" (da zhi ruo yu). 
Professor Hu noted that no one rises to the top of the Chinese 
political system as President Hu has done--especially spending 
ten years at the center as the heir apparent with his 
predecessor, Jiang Zemin, constantly gunning for him--without 
great skill.  Professor Hu opined that President Hu has always 
been a much better politician than Jiang. 
 
¶10.  (C) President Hu is a man of few words, an effective 
compromiser when appropriate, but not afraid to "rule with an 
iron fist" when needed, Professor Hu continued.  In that sense, 
President Hu strongly resembles Russia's President Vladimir 
Putin.  For instance, the arrest of former Shanghai Party 
Secretary Chen Liangyu caught everyone by surprise.  Professor 
 
SIPDIS 
Hu said he might have predicted that Chen would have been 
transferred out of Shanghai or moved into a sinecure position 
but never would have guessed at how quickly President Hu moved 
against Chen.  For further evidence of Hu's "iron will," 
Professor Hu pointed to his brutal crackdown against 
demonstrators in Tibet in the late 1980s--a move that proved to 
Deng Xiaoping that Hu was capable enough to lead the party.  Hu 
had purposefully kept his intentions, ambitions, and strategies 
close to himself during his first decade on the PBSC and played 
the role of respectful subordinate.  However, Professor Hu 
believes that as Hu grows in power and influence--particularly 
after October's Party Congress when he will likely secure posts 
for his supporters--the more Hu will show his "iron" side. 
 
-------------------------------- 
Scientifically Including Harmony 
-------------------------------- 
 
¶11.  (C) Professor Hu noted that based on press reports, it is 
all but certain that President Hu's "Scientific Development 
Concept" will be written in the Party Constitution.  President 
Hu's "Harmonious Society" formulation--the formulation President 
Hu initially favored--would also be written in, albeit in a more 
subservient role.  The "Scientific Development Concept" is 
easier for party ideologues to accept.  Some feel that the 
concept of "harmony" is too much at odds with the 
Marxist-Leninist tradition and requires too many mental hoops to 
jump through in order to square the ideological circle. 
Moreover, many wealthy Chinese are opposed to the formulation as 
well since they believe that achieving "harmony" would mean a 
greater focus on wealth redistribution.JARRETT