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RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGZ/AMCONSUL GUANGZHOU 0328
RUEHHK/AMCONSUL HONG KONG 2040
RHEHAAA/NSC WASHINGTON DC
RUEHSH/AMCONSUL SHENYANG 1863
RUEHIN/AIT TAIPEI 1660
RUEHGH/AMCONSUL SHANGHAI 8432

UNCLAS SECTION 01 OF 03 SHANGHAI 000150 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI ECON CH
SUBJECT: EXPLORING BRIDGES TO NANJING CIVIL SOCIETY: FEDERATION OF 
INDUSTRY AND COMMERCE AND ACADEMY OF SOCIAL SCIENCES 
 
(U) Sensitive but unclassified.  Not for dissemination outside 
USG channels; not for Internet distribution. 
 
¶1.  (SBU)  Summary:  Initial calls on the Nanjing Federation of 
Industry and Commerce and the Nanjing Academy of Social Science 
yielded potentially valuable contacts for gauging the extent of 
civil society development in Nanjing.  Although both bodies are 
closely tied to the Communist Party, they act as bridges to the 
local private business community and academic circles, 
respectively, and could prove useful in our efforts to expand 
our own outreach in Nanjing.  End summary. 
 
Nanjing Serious about Supporting Private Firms 
--------------------------------------------- - 
 
¶2.  (SBU)  Nanjing's leadership strongly supports the 
development of private industry, Nanjing Federation of Industry 
and Commerce Executive Vice Chairman Li Bing stressed to Congen 
Shanghai's Nanjing Outreach Office during a March 24 
introductory meeting.  In particular, the Nanjing Municipal 
Government has organized a private economy leading group 
(lingdao xiaozu) headed by a vice mayor.  In 2008, Nanjing 
possessed 115,300 private companies, 210,000 individual 
industrial and commercial households which accounted for 1/3 of 
the municipality's GDP.  Although Nanjing has fewer private 
enterprises than neighboring Zhejiang Province - the 
jurisdiction generally viewed as the model for private 
enterprise development in China - Jiangsu's firms tend to be 
better quality and include large conglomerates like the food 
processing giant Yurun and the major electronics retailer 
Suning. 
 
¶3.  (SBU)  Li described the role of the Nanjing Federation of 
Industry and Commerce as connecting the government and private 
economy, and helping the government to regulate companies.  The 
Federation itself, however, is not a department of the 
government but instead represents entrepreneurs' interests. 
(Comment:  It is important to note, however, that, based on 
information available from the Federation's website, a deputy 
director of the Nanjing Municipal Party Committee's United Front 
Work Department serves as the secretary of the Federation's 
internal Communist Party cell and outranks Vice Chairman Li. 
End comment.) 
 
¶4.  (SBU)  According to Li, the recent economic downturn has had 
a varying impact on Nanjing's private firms, although overall 
the situation in Nanjing is better than in Zhejiang and 
Guangzhou provinces.  For example, Yurun's food and tourism 
business is fine, but investments in real estate have suffered. 
Steel producers and companies dependent on foreign trade, 
particularly in the textile and machinery industries, have also 
been hurt.  Nevertheless, Li stressed there had so far not been 
many lay-offs in Nanjing, and only a few small companies have 
closed.  Some companies are still hiring workers, and others, 
even as business has dried up, are keeping workers on the roles 
and providing them additional training in order to retain a 
skilled labor force in anticipation of better times.  Firms in 
heavily polluting industries such as dyeing where, as a matter 
of policy, bank credit is unavailable face greater difficulties. 
 Li stressed these firms, however, were under pressure even 
before the onset of the global financial crisis. 
 
¶5.  (SBU)  Reviewing the climate for private enterprise in 
Nanjing, Li said the municipality's policies are similar to 
those in Zhejiang and Guangzhou.  Nanjing's main advantage lies 
in its rich endowment of human capital arising from the many 
universities located there.  Consequently, Nanjing plans to 
build a "software city" dominated by private enterprises.  In 
addition, Nanjing enjoys a relatively transparent local 
government and convenient transportation links as well as an 
extremely safe security environment. 
 
¶6.  (SBU)  In Li's view, China's private firms are experiencing 
the best time in their history in terms of official protection. 
Federation members, for example, can send protests about 
corruption to a complaint office attached to the Municipal 
Communist Party Discipline Inspection Committee.  The local 
courts have also been discussing with the Federation how to 
protect member companies' interests during the present economic 
downturn.  The Federation has increased cooperation with the 
local prosecutors' office and the Municipal Public Security 
Bureau as well. 
 
SHANGHAI 00000150  002 OF 003 
 
 
 
¶7.  (SBU)  Li herself, a member of the municipal Political 
Consultative Commission, has used her position to advocate for 
the interests of private businesses.  She cited the example of 
her success in winning an exemption for trucks supplying the 
city's grocers to a Nanjing traffic ordinance banning truck 
traffic from the city during the day.  She added the Federation 
had organized seminars for member companies with the Municipal 
Labor and Social Security Bureau to improve understanding of 
China's new Labor Contract Law.  Acknowledging the importance of 
private firms in generating employment, Li noted the Federation 
has also aided private firms to secure bank loans. 
 
Social Scientists Stress Social Role of Party-led Orgs 
--------------------------------------------- --------- 
 
¶8.  (SBU)  In a separate March 24 meeting, Nanjing Academy of 
Social Sciences (NJASS) Vice President Chen Ru outlined NJASS's 
structure and functions.  One of China's few municipal-level 
social science research institutions, NJASS has 40 full-time 
staff members including 10 researchers and provides expert 
policy advice to Nanjing's municipal leadership.  It has three 
research institutes covering social, economic, and cultural and 
historical development.  Each year NJASS produces a "blue book" 
on Nanjing's social and economic development issued immediately 
prior to the annual session of the municipal people's congress 
(usually in January) and sponsors three to five large academic 
events.  These events include the "economic and social 
development forum" every September and exchange programs with 
institutions in Beijing and Shanghai along with overseas 
universities.  Research projects at the Academy for 2009 include: 
-- transformation of the basis of the Nanjing economy from 
traditional manufacturing toward  high-technology and services, 
in line with the central government's plans for development of 
the Yangtze River Delta; 
-- improving innovation in science and education, particularly 
among the over 40 universities located in the municipality; 
-- enhancing Nanjing's overall competiveness; 
-- promoting "culturally creative industry", such as Buddhism 
studies and cultural preservation; 
-- maintaining social stability and social security during the 
economic downturn; 
--  and examining labor issues such as medical insurance and 
worker-management relations. 
 
¶9.  (SBU)  Asked to comment on the role of nongovernmental 
organizations in Nanjing society, a researcher from the NJASS 
Social Development Institute highlighted the role of the 
traditional "united front" organs such as the Communist Youth 
League, and the Women's Federation.  He observed that Nanjing 
has organized 7700 (government-affiliated) grass-roots trade 
unions, covering 1.5 million employees, which focus on 
employment, training, and collective negotiation for salaries. 
In addition, the municipality has many industry associations, 
which are somewhat more independent from the government and help 
entrepreneurs communicate among themselves and establish 
industry standards. 
 
¶10.  (SBU)  Nanjing has exhibited a unique characteristic in its 
encouragement of volunteerism, the researcher noted.  Currently 
the municipality has half a million registered volunteers, 
engaged in such activities as poverty alleviation, education, 
assistance to the disabled and aged, and environment protection. 
 The researcher concluded the functions fulfilled by these 
volunteer efforts will expand and deepen into the foreseeable 
future. 
 
Comment 
------- 
 
¶11.  (SBU)  Our goal on this trip was to establish contacts to 
help us begin to ascertain the extent of civil society 
development in Nanjing.  Both NJASS and the Federation of 
Industry and Commerce - neither of which have had previous 
contact with Congen Shanghai -- are, to different degrees, 
outreach organs of the Nanjing Municipal Communist Party 
Committee; NJASS focuses on academics while the Federation acts 
as the leadership's formal bridge to the municipality's growing 
community of private businessmen.  NJASS also undertakes public 
opinion surveys on behalf of the Nanjing authorities.  Though 
not civil society organizations themselves, they do provide an 
entry point to influential communities in Nanjing and may be 
 
SHANGHAI 00000150  003 OF 003 
 
 
valuable partners as we seek to expand our own outreach 
activities in Nanjing. 
CAMP