VZCZCXRO3564
RR RUEHCN RUEHGH
DE RUEHGZ #0701/01 3570438
ZNR UUUUU ZZH
R 230438Z DEC 09
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1208
INFO RUEHBJ/AMEMBASSY BEIJING 0969
RUEHGH/AMCONSUL SHANGHAI 0322
RUEHSH/AMCONSUL SHENYANG 0332
RUEHCN/AMCONSUL CHENGDU 0323
RUEHHK/AMCONSUL HONG KONG 0386
RUEHGV/USMISSION GENEVA 0045
RUCNDT/USMISSION USUN NEW YORK 0011
RUEAIIA/CIA WASHDC 0370
RUEKJCS/DIA WASHDC 0366

UNCLAS SECTION 01 OF 02 GUANGZHOU 000701 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SOCI SENV CH
SUBJECT: Shenzhen's Planned Comprehensive Reforms: What will They 
Look Like? 
 
Ref: GUANGZHOU 689 
 
This report is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1. (SBU) Summary: Shenzhen is currently undergoing "comprehensive" 
reform of its administrative system (see also reftel), including 
instituting a balance of power scheme and reducing the number of 
government departments by one-third.  Attrition -- not personnel 
cuts -- will be the primary means of shrinking the city's 
bureaucracy.  The State Council in Beijing has approved the reforms, 
which have already been implemented at the city level and will next 
be implemented at the district and community level.  In a bid to 
remedy land and water shortages and to take better advantage of 
geographic proximity, Shenzhen is examining opportunities to 
integrate itself with the neighboring municipalities of Dongguan and 
Huizhou, both of which could benefit from easier access by Hong 
Kong-based investors.  End summary. 
 
A Tripartite Balance of (Administrative) Power? 
----------------------- ----------------------- 
 
¶2. (SBU) Policy, implementation and supervision are three "branches" 
of government administration that will come under a balance of power 
arrangement in Shenzhen, Vice Mayor Zhuo Qinrui told the Consul 
General in September.  Zhuo said that the three branches would 
"restrain each other" but would also maintain connections with one 
another.  Shenzhen has already completed this reform at the city 
level and would subsequently work on implementing the same structure 
at the district level and community level, said Zhuo.  (Comment: 
This "balance of powers" should not be interpreted as a potential 
source of greater political freedom in Shenzhen.  The city's 
comprehensive reforms will not take any steps that would threaten 
the Communist Party's control or authority.  End comment.) 
 
Shrinking the Government 
------------------------ 
 
¶3. (SBU) Shenzhen is out to "change the way government functions," 
according to Zhuo.  The Shenzhen plan calls for going from 47 
government departments to 31, with an accompanying reduction of 
management-level bureaucratic positions, said Zhuo.  He commented 
that positions at the director-general level in particular would be 
hard hit, with the jobs of about half of all directors general and 
their deputies slated for elimination.  Zhuo said that very few 
bureaucrats would need to be actively eliminated or fired; the plan 
is to allow attrition to naturally reduce the numbers.  Zhuo said 
that handling the personnel situation, especially, necessitated a 
slow and gradual implementation of the reforms.  He also said that 
reducing the number of Shenzhen's bureaucrats was not a primary goal 
of the reforms, but rather a consequence of a more efficient 
government structure. 
 
¶4. (SBU) Shenzhen is also examining ways to streamline government 
functions and to pass appropriate functions to non-governmental 
entities, such as business, according to Zhuo.  Zhou said that 
approximately one-third of the municipality's government functions 
are likely to be passed to the business sector with the goal of 
making government more accessible and service oriented for 
residents.  Zhuo said that although some staff still had their 
doubts about the government's streamlining of personnel and 
functions, Shenzhen authorities were committed to effecting change 
-- a view reconfirmed by a senior member of the Shenzhen Foreign 
Affairs Office in mid-December. 
 
Beijing is Very Much on Board 
----------------------------- 
 
¶5. (SBU) Shenzhen officials bluntly stated that their intention was 
for the city's reforms to be implemented in Shenzhen, then studied 
and packaged as a case study for other municipalities in China to 
follow.  Noting that "comprehensive reform" includes reforms in 
administrative and, without elaboration, "other areas," Zhuo 
reiterated several times that China's State Council had given its 
blessing for Shenzhen's leaders to make the changes.  Zhuo said that 
the first stage of reforms had been completed within one month of 
receiving the State Council's approval, adding that the city's 
leaders "can always go back to the central government for additional 
approvals" if new challenges or opportunities arise, giving needed 
flexibility to the process.  Vice Mayor Zhuo appeared satisfied 
that, 30 years on, Shenzhen was continuing to play an important role 
in China's reform and opening policy. 
 
GUANGZHOU 00000701  002 OF 002 
 
 
 
Integrating (not Merging!) Municipalities 
----------------------------------------- 
 
¶6. (SBU) In a bid to remedy land and water shortages, Shenzhen is 
examining opportunities to integrate itself with the neighboring 
municipalities of Dongguan and Huizhou, said Zhuo.  He was careful 
to say that integration was not the same thing as merging the cities 
together; they would expand and share some services, such as subway 
lines and business registration requirements, while still retaining 
discrete municipal bureaucracies.  Zhuo said that environmental 
protection issues might be better handled as a multi-city unit 
because pollution from any one municipality tends to affect the 
others.  He noted that Shenzhen could benefit from Dongguan's and 
Huizhou's land and water resources while those two cities would 
certainly benefit from Hong Kong-based investors having access 
comparable to that enjoyed in Shenzhen. 
 
GOLDBECK