VZCZCXRO5702 
OO RUEHCN RUEHGH RUEHVC 
DE RUEHBJ #7107/01 3181030 
ZNY CCCCC ZZH 
O 141030Z NOV 07 
FM AMEMBASSY BEIJING 
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3441 
INFO RUEHOO/CHINA POSTS COLLECTIVE 
RHEHNSC/NSC WASHDC 
RUEAIIA/CIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 05 BEIJING 007107

SIPDIS

E.O. 12958: DECL: 11/14/2032
TAGS: PGOV CH
SUBJECT: CONTACTS ON NEW POLITBURO STANDING COMMITTEE
MEMBER XI JINPING´S RISE, NEW LEADERSHIP LINEUP

REF: A. BEIJING 7004
¶B. BEIJING 6940 (NOTAL)
¶C. BEIJING 6777 AND PREVIOUS
Classified By: Political Minister Counselor Aubrey Carlson. Reasons 1.4
(b) and (d).

Summary
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¶1. (C) Many Embassy contacts have told Poloffs that the elevation of "fifth generation" leaders Xi Jinping and Li Keqiang to the Politburo Standing Committee (PBSC) at the recently completed 17th Communist Party Congress (Ref A) may be the Congress´s most significant outcome. Anointing Xi and Li as China´s next leaders largely determines the outlines of Chinese elite politics for the next fifteen years. In the end, Xi Jinping was reportedly ranked ahead of Hu Jintao protege Li Keqiang because of Xi´s broad acceptability within the Party. The support Xi garnered from Party elders and "princelings" as the son of well-respected early revolutionary Xi Zhongxun and a desire to check the influence of Hu Jintao and the Communist Youth League (CYL) were also important factors in his rise. One source claimed that Hu Jintao himself put forward Xi Jinping´s name as the leading fifth generation PBSC member after his first choice Li Keqiang ran into opposition from Party elders. Contacts also speculated about impending government personnel changes at the March 2008 National People´s Congress (NPC) and offered personal insights on new PBSC member He Guoqiang and new Politburo member Li Yuanchao. End Summary.

China´s New Leadership: Eyes on 2012, Party Stability
--------------------------------------------- --------

¶2. (C) In the wake of China´s 17th Communist Party Congress and the unveiling of the Party´s new leadership lineup on October 22 (Ref C), a range of contacts have told us that China´s new leaders were chosen primarily to maintain a balance within the Party among various interests, thereby ensuring a stable leadership succession in 2012, when current General Secretary Hu Jintao is expected to step down. Although Beijing observers have commented extensively about what the Congress meant in terms of Hu Jintao´s power (Ref A), many have also said that the Congress´ most significant outcome may in fact have been the elevation of Xi Jinping and Li Keqiang to the PBSC, thereby anointing those two as China´s next generation of leaders and largely setting the general outlines of Party leadership politics for the next fifteen years.

¶3. (C) Immediately following the unveiling of the new leaders on October 22, XXXXXXXXXXXX, an official in XXXXXXXXXXXX with close ties to Central Party School officials, told Poloff that the overriding message of the lineup was that it is "super stable" and represents a "highly appropriate balance" of competing Party interests. XXXXXXXXXXXX separately agreed, commenting on November 1 that the new lineup, particularly the selection of the "princeling" Xi Jinping balanced by Hu protege and former CYL head Li Keqiang, provides "something for everyone," thereby guaranteeing relative harmony among competing Party factions for at least the next five years. XXXXXXXXXXXX, senior journalist at the XXXXXXXXXXXX, said that while "perhaps not ideal," the leadership lineup nevertheless is designed to guarantee that politics at the CCP´s top remains balanced, thereby ensuring no "radical changes" in either the Party´s leadership or its general policy direction in 2012 and beyond.

Xi Jinping´s Popularity
-----------------------

¶4. (C) The decision to elevate former Shanghai Party Secretary Xi Jinping to the PBSC, and to rank him ahead of purported Hu Jintao favorite Li Keqiang, was due in large part to the broadly favorable opinion toward Xi within the Party, according to a number of contacts. XXXXXXXXXXXX told Poloff on October 26 that Xi´s support within the Party was demonstrated in part by a "straw poll" carried out at the Central Party School on June 25, immediately after Hu Jintao delivered his speech there previewing his Congress Political Report. The 400 Party officials present at the June 25 speech were asked to provide feedback on a list of 200 candidates for the PBSC. Xi did very well in this "survey," XXXXXXXXXXXX said on October 26, surmising that he also did "very well" in the Congress voting for the Central Committee, likely finishing "far ahead" of Li Keqiang.

¶5. (C) Zhang Zhijun of the CCP International Liaison Department provided the official propaganda line on the June 25 "vote" when on October 24 he told a group of foreign diplomats, including Poloffs, that the Party had employed a "democratic nomination process" on June 25 involving 400 senior officials who, following Hu´s speech earlier that day, "created" a list of nominees to newly enter the Politburo from among a roll of 200 qualified "candidates." Zhang called this a true demonstration of "inner-Party democracy." Separately, XXXXXXXXXXXX and close associate of Ministry of Civil Affairs officials in Beijing, told Poloff on October 25 that the real purpose of the June 25 "vote" was to generate a list of the most "viable" new candidates for the Politburo, which could then be thoroughly "scrubbed" to ensure that popular candidates had "no major flaws" in terms of their prior performance, health or integrity. The CPS´s XXXXXXXXXXXX said that Xi is acceptable to Hu for a variety of reasons, but Hu "simply could not ignore" the "obvious support" for Xi within the Party, particularly since Hu had stressed that the opinions of other Party members and even the public should be taken into account in selecting the Party´s new leaders.

¶6. (C) The sources of Xi´s purported popularity are said to be many. First, several contacts pointed to Xi´s status as son of Xi Zhongxun, an early revolutionary who later became Party Secretary of Guangdong and both Politburo member and Vice Premier under Deng Xiaoping. According to XXXXXXXXXXXX, Xi´s father´s status "virtually ensured" Xi broad support within the Party, given the elder Xi´s credentials as both a revolutionary and a Deng Xiaoping ally in promoting reform. Moreover, XXXXXXXXXXXX said, Xi Zhongxun´s role as a military leader in the revolution has helped Xi Jinping garner support from the PLA. Second, contacts say, almost everyone "likes" Xi Jinping because, unlike many other princelings, he is "not arrogant" and instead is low- key, humble and self-effacing. XXXXXXXXXXXX, who has direct access to Zhongnanhai, told Poloff October 23 that Xi is well liked by "nearly everyone" and has a great network of contacts across China, which in the PRC is still more important than one´s talent. XXXXXXXXXXXX contrasted Xi´s low-key manner with that of other princelings such as former PBSC Member Chen Yun´s son, Chen Yuan, who apparently greatly angered Deng Xiaoping many years ago by issuing a "declaration" calling for the princelings to "rule" China. Third, there is a general perception within the Party, according to both XXXXXXXXXXXX and XXXXXXXXXXXX, that Xi has a great deal of experience in governing at a variety of levels, having served in Hebei, Fujian, Zhejiang and Shanghai, in positions ranging from a county-level official to Provincial Party Secretary. (Note: XXXXXXXXXXXX said he has known Xi since XXXXXXXXXXXX, it was obvious that Xi had a bright future, given his ability and great attitude, though XXXXXXXXXXXX "never dreamed" Xi would be in line to become the Communist Party´s next General Secretary.)

Xi as "Compromise Candidate"
----------------------------

¶7. (C) While Xi´s popularity and broad support certainly played a role in his elevation, several contacts stressed these factors came into play only after intense jockeying over the Party´s most senior posts, with Xi in the end becoming the "compromise candidate" acceptable to all, even to Hu Jintao. According to XXXXXXXXXXXX, a collection of "Party elders," including but not limited to Jiang Zemin, challenged Hu´s initial proposal to elevate Li Keqiang as his successor by arguing Li "lacked sufficient experience." Initially, XXXXXXXXXXXX claimed in a November 8 discussion with Poloffs, these "elders" offered no alternative but made clear they would not accept Li Keqiang in the "heir apparent" slot. Hu Jintao allegedly then came back with two choices of "fifth generation" leaders as candidates to be placed ahead of Li Keqiang on the PBSC: Minister of Commerce Bo Xilai and Xi Jinping. The choice, XXXXXXXXXXXX said, was "obvious," given the younger Bo´s unpopularity in many quarters within the Party. Also as part of the deal for having Li Keqiang "take a step back," Zeng Qinghong agreed to step down, XXXXXXXXXXXX claimed.

¶8. (C) XXXXXXXXXXXX separately told Poloff that he also understood that Zeng Qinghong´s stepping down was part of a "package deal" to elevate Xi ahead of Li Keqiang. He also said that in his view, Xi Jinping´s promotion to Shanghai Party Secretary in March 2007 "previewed" his later promotion to the PBSC. At that time, XXXXXXXXXXXX claimed, Hu was pushing for United Front Work Department Head Liu Yandong to go to Shanghai, but Jiang Zemin and Zeng Qinghong were backing Xi Jinping. In the end, Hu relented and agreed on Xi, agreeing to accept Xi even though he was not his first choice. XXXXXXXXXXXX argued that the elevation of Xi to the PBSC last month followed a "nearly identical dynamic."

Checking Hu, Protecting Princeling Interests
--------------------------------------------

¶9. (C) Other contacts emphasized the desire to check the influence of Hu Jintao and the CYL and the perceived need to protect "princeling" interests as being behind Xi´s rise. XXXXXXXXXXXX, for example, said Xi Jinping´s promotion should be viewed as a "direct reaction" among Party elders, the remnants of the Shanghai faction and others to the growing power of Hu Jintao and the CYL. XXXXXXXXXXXX similarly told Poloff on October 24 that Xi is on the PBSC primarily because "Party elders" want him there, as they feel they "know" Xi and are "comfortable" with having him groomed to succeed Hu. Freelance journalist XXXXXXXXXXXX agreed, though he thought that Party elders were primarily concerned with having someone "conservative" like Xi in place who will not threaten their "vested interests." XXXXXXXXXXXX also played up the support of Party elder families and their "princeling" offspring, arguing that ever since the 1989 Tiananmen protests and the 1991 collapse of the Soviet Union, a number of Party elders have been pushing for placing their progeny atop the Party, believing that only their own offspring can be trusted to run the country. Xi Jinping is proof of the elders´ and princelings´ influence, XXXXXXXXXXXX said, calling Xi´s elevation the beginning of the "return of the Princelings."

Comparing Xi to Li Keqiang
--------------------------

¶10. (C) While such "factional" balancing appears to have played a key role in the decision to elevate Xi ahead of Li, contacts have said Li Keqiang was more vulnerable than Xi for other reasons as the leaders jockeyed for PBSC slots. XXXXXXXXXXXX commented that, for many Party leaders outside the CYL, it was not so much that they do not trust Li Keqiang as much as they simply "do not know him." XXXXXXXXXXXX described Li Keqiang as an "intellectual" closely identified with Hu Jintao who rose through the ranks of the CYL. In that sense, Li simply does not compare well to someone like Xi, the son of a prominent revolutionary who was much more widely known and revered. Moreover, many people argued that Li does not have such great accomplishments to show for his time in Henan and Liaoning provinces. While Li may not have run into such great problems, he has no great achievement to point to, XXXXXXXXXXXX said. Separately, the XXXXXXXXXXXX agreed, arguing that Li simply does not have the kind of experience or accomplishments that would qualify him to be the country´s next Party General Secretary.

¶11. (C) Contacts who underscored Li´s strengths similarly noted that CYL stereotypes and his career background worked against him. XXXXXXXXXXXX said he was XXXXXXXXXXXX at the same time as Li, calling him "smart," a good student and a "good person." The overwhelming impression Li gave was that of a "good Party bureaucrat." XXXXXXXXXXXX, who has had ties to Li Keqiang going back a decade or more, said that Li Keqiang is "highly capable" and is also low-key, polite and respectful of Party elders, even though he simply was not their first choice for the top slot. XXXXXXXXXXXX also thought that Li comes across as a good CYL cadre, exhorting the Party "troops" to do great work and citing the correct Party slogans. By contrast, XXXXXXXXXXXX said, Xi comes across as a more confident, forceful leader, despite being low-key. XXXXXXXXXXXX argued that Li Keqiang is "more open, more Western" than Xi Jinping, givn his undergraduate legal education at PekingUniversity. Xi Jinping, by contrast, receive a more "Leftist, Marxist" education, even though he supposedly has a doctorate in "law." XXXXXXXXXXXX conceded, however, that Li had to deal with the "unpopularity" of the CYL in certain quarters within the Party, with some believing that CYL cadres are too "bureaucratic" and are simply "careerists" worried mostly about their next promotion, thereby putting "form" ahead of "substance."

¶12. (C) In the end, XXXXXXXXXXXX opined, neither Xi nor Li are "ideal" leaders in a "scientific" sense, given that both are relatively junior and lacking in experience. XXXXXXXXXXXX also agreed that neither Xi nor Li has as much experience as a Chinese leader should have. Nevertheless, they are the two leaders the system clearly has chosen to lead the country. Under this system, one´s loyalty and connections (Xi´s to the Party elders and Li´s to Hu Jintao) counted more in the end than their ability. XXXXXXXXXXXX posited that Li and Xi share many similarities, despite their different backgrounds and bases of support. Both will likely seek stability of the CCP ruling system above all, XXXXXXXXXXXX speculated, but Li is more likely to seek stability by dealing with inequality and various social problems by redistributing wealth. Xi, on the other hand, may be more likely to use coercive means to keep the CCP, and princelings, in power.

Speculation on Impending Government Appointments
--------------------------------------------- ---

¶13. (C) Two contacts speculated on the impending high- level government personnel changes slated for the March 2008 National People´s Congress (NPC). XXXXXXXXXXXX said his "best contacts" tell him that Li Keqiang will become Executive Vice Premier, replacing the deceased Huang Ju. Zhang Dejiang will be Vice Premier in place of Wu Yi, while Wang Qishan will be Vice Premier replacing Zeng Peiyan. Meanwhile, Hua Liangyu will stay on as Vice Premier. CPS Professor XXXXXXXXXXXX agreed that Li Keqiang is headed for the Executive Vice Premier slot but said he had heard that it is Wang Qishan that will replace Madame Wu Yi, not Zhang Dejiang. XXXXXXXXXXXX said he had also heard that Zhang Dejiang may end up staying put as a Party Secretary "out in the provinces." As for the Vice President´s slot that will be vacated in March by Zeng Qinghong, who has already stepped down from the PBSC, XXXXXXXXXXXX said he expected Xi Jinping, as heir apparent, to take over this position. It is, however, still possible that the post could be left vacant for a short while. Regardless, XXXXXXXXXXXX thought the chances of giving the Vice Presidency to a non-Party person, as had been done previously, were "quite low."
---------------------------------------------

¶14. (C) Well-connected XXXXXXXXXXXX told Poloff that XXXXXXXXXXXX. (Note: XXXXXXXXXXXX said. XXXXXXXXXXXX. The CDIC portfolio is "incredibly difficult" and must be filled by someone "everyone in the Party" can trust, XXXXXXXXXXXX said. Given that He is well-known for being low-key and "not aggressive," it is likely that he was acceptable to all in the CDIC slot, given that many people fear the use of anti-corruption investigations as political weapons.

¶15. (C) XXXXXXXXXXXX said that his impression is that He Guoqiang has a "relatively favorable" attitude toward the United States, believing that the United States should be recognized for its political and economic accomplishments but that not all of its lessons can be "transplanted" to China. XXXXXXXXXXXX.

Li Yuanchao´s "Huge Step Up"
----------------------------

¶16. (C) XXXXXXXXXXXX provided Poloffs with comments on Li Yuanchao, the former Jiangsu Party Secretary and Hu Jintao protege who was recently promoted to the Politburo, where he has been made head of the Party´s Central Organization Department. XXXXXXXXXXXX said he knows Li Yuanchao well, as XXXXXXXXXXXX. In recent years, Li´s wife lived in Beijing teaching music, traveling back to Jiangsu for weekends with her husband. Li´s wife reportedly recently told XXXXXXXXXXXX that, with her husband´s promotion to the Politburo, her "long march" is "over" and she has recently moved into quarters in Zhongnanhai. Li Yuanchao has made his "fair share of enemies" over the years, XXXXXXXXXXXX claimed, though he speculated that everyone would "kiss his ring" now, given his important new position. XXXXXXXXXXXX said that Li Yuanchao´s promotion to Organization Department Head is a "huge step up," given that Li will now control the fate of many people in China. While Li may have a hard time influencing those above him, all of the leaders´ factional networks will fall under his authority. XXXXXXXXXXXX expressed a similar view on Li´s power, but provided a somewhat different perspective on the political dynamics associated with Li´s position. In response to Poloff´s observation that some people think PBSC Member He, as former Organization Department head and Zeng Qinghong protege, would have a large influence over Li´s decisions, XXXXXXXXXXXX said that Li´s close relationship to Hu Jintao would pose a significant check on He´s power. Although He retained top authority over the Party´s personnel system, he would be reluctant to overrule Li´s decisions.
PICCUTA