US Dispatches from Beijing: 'True Democracy' Within China's Politburo?

Can one find democracy in China? According to a US source in Beijing, the country's Politburo is more interested in consensus than decrees -- on all issues except for Tibet. But, US diplomats allege, most of the country's top functionaries maintain close ties with various industries.

Hu Jintao strives for consensus, except when it comes to Tibet, according to US diplomatic dispatches from Beijing.

Foto: VIVEK PRAKASH/ REUTERS

Is there any place in dictatorial China where votes are taken and discussions held -- rather than orders given and decrees issued? Indeed there is. And it is where one would least expect it: In the heart of Chinese power.

If one is to believe US diplomatic sources in Beijing, "true democracy" prevails in the Politburo of all places, within that little-known group of top apparatchiks consisting of 24 men and one woman.

No one outside China's ruling cadre knows who at the top of China's power structure decides what and why. No one knows who thinks what, who is allied with whom and who really has influence. Public debates are rare. But by talking to leading functionaries, experts from the US Embassy in Beijing managed to get a glimpse inside of China's inner circle.

The newly revealed US embassy dispatches provide surprising details. Hardly any decisions, no matter how sensitive they might be, are decreed by head of state Hu Jintao or head of government Wen Jiabao. Decisions instead tend to be taken collectively by top Communist party functionaries. When vital policy issues, such as relations with Taiwan or North Korea, are up for decision, all 25 Politburo members are involved. Lesser issues are resolved by the nine-member standing committee.

'A Consensus System'

The committee, though, does not decide by vote, according to cables sent from US diplomats back to Washington. Instead, issues are weighed up and discussed for as long as it takes to arrive at a consensus. In the decision making process, to be sure, Hu Jintao's "views carry the greatest weight," US diplomats quote a source with access to the inner power circle as saying. "It is a consensus system," the source said, "in which members can exercise veto power."

It is a system that ensures that none of the Communist party functionaries becomes too powerful. But it is a principle, US diplomats have been told, that doesn't apply to one particularly touchy issue: that of the Dalai Lama and Tibet. On that subject, China's president and Communist party head Hu Jintao "is firmly in charge."

In his eyes, the Dalai Lama is a traitor and a separatist. Rebels are to be severely punished or re-educated -- a view that Hu himself applied during his time as Communist party chief in Tibet from 1988 to 1992. Those who would prefer a milder approach risk their careers, US diplomats have been told.

Originals: The Key China Politburo Cables

Click on the headlines below to read the full texts...

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<<100105>> 3/13/2007 9:00 07BEIJING1668 Embassy Beijing CONFIDENTIAL

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E.o. 12958: decl: 03/13/2032 Tags: phum, prel, pgov, ch Subject: wu yi intervenes as dr. Gao case lays bare center-local discord

Ref: beijing 1063 and previous

Classified By: Ambassador Clark T. Randt, Jr. Reasons 1.4 (b/d).

Summary -------

1. (C) Vice Premier Wu Yi personally intervened in the case of Dr. Gao Yaojie in order to break an impasse between the Central Government and Henan Province authorities, xxxxx unusually candid comments, along with other observations from MFA staffers, reveal a glimpse into central-local dissonance and how tough political problems get solved in China. xxxxx complained that Provincial Party Secretaries are using their considerable clout to

Sipdis increasingly weigh in with Central authorities on issues that affect foreign policy. In Dr. Gao's case, well-connected Henan Province Party Secretary Xu Guangchun wanted to prevent the doctor from publicly embarrassing the province, which would threaten Xu's own promotion prospects. In the end, only intervention from the highest levels of China's Government induced Henan authorities to relent.xxxxx officials stressed to us China's desire that Dr. Gao's visit to the United States not be "politicized." End Summary.

Candid Talk in an Informal Setting ----------------------------------

2. (C) Vice Foreign Minister Yang Jiechi topped the cast of several dozen MFA attendees at the Ambassador's Lunar New Year dinner reception February 28. Keen for insights into what prompted the policy switch whereby Henan Province authorities released Dr. Gao from house arrest, Poloffs asked MFA officers at various levels for their reading of how we reached the positive outcome. Dr. Gao arrived in New York February 26 and is scheduled to receive an award at a Vital Voices Global Partnership event in Washington on March 14. She has told the foreign press that intervention from high-level Central leaders (as well as international pressure) likely caused the local government in Henan Province to release her from house arrest and allow her to travel abroad.

Henan Feels the Heat --------------------

3. (C) xxxxx confirmed Dr. Gao's assertions, remarking that "top leaders" needed to get involved in order to overrule Henan Province Party Secretary Xu Guangchun, xxxxx acknowledged. (Note: Xu, the former head of the State Administration for Radio, Film and Television, is reported to have ties to President Hu Jintao. End note.) xxxxx complained that provincial Party secretaries have considerable clout and are increasingly weighing in with the Central Government on issues that affect foreign policy, diminishing the authority of the MFA in policymaking. Provincial leaders do not listen to the MFA, xxxxx commented. Such was the case with Dr. Gao. xxxxx said neither xxxxx VFM Yang Jiechi to EVFM Dai Bingguo to FM Li Zhaoxing -- had the bureaucratic muscle to fix the problem. Vice Premier Wu herself had to call the authorities in Henan and tell them to allow Dr. Gao to travel.

4. (C) Henan officials, including Party Secretary Xu, were likely concerned that if Dr. Gao traveled to the United States, she would do or say something to embarrass the province, which in turn could harm the officials' potential for promotion, xxxxx commented. As a general rule these days, personal advancement is priority No. 1 for local leaders, regardless of their province. "They are most interested in their own political position," xxxxx complained. Provincial leaders do not think about the national interest and, currently, are focused mainly on making sure that "nothing bad happens" to dash their promotion prospects, he said.

Wu Yi's Constant Calls ----------------------

5. (C) xxxxx related that Vice Premier Wu Yi "ruined" his spring festival holiday break by calling him constantly for updates. After Henan officials released the doctor from house arrest on February 16,

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the case became even more challenging for the MFA because Central authorities were worried about Dr. Gao causing trouble in Beijing on her way to the United States. Would she hold a press conference? Would the media film her trip to the Embassy to pick up a visa? "We needed to follow the issue very closely," xxxxx related.

6. (C) The MFA was also concerned because "sensitive people" who might be tempted to "manipulate" the matter fastened themselves to Dr. Gao during her time in Beijing. "You know who these people are," xxxxx claimed. xxxxx

7. (C) Although we have no firm evidence, it appears probable that Senator Clinton's personal appeal via letter was a key catalyst behind Vice Premier Wu's intervention in the case.xxxxx told Poloff they thought the Senator's letter struck an appropriate tone. Regardless, Vice Premier Wu's involvement comes at a time when she is taking on a high-visibility role in United States-China relations. xxxxx told the DCM that the Vice Premier called him xxxxx. She gave xxxxx marching orders to present her and the Strategic Economic Dialogue in a proper light, he said. In addition, Vice Premier Wu took an unusually high-level Chinese delegation to Beijing airport March 7 to meet briefly with Treasury Secretary Paulson as he transited on the way to

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Don't Politicize It -------------------

8. (C) Further on public aspects of Dr. Gao's case, MFA International Organizations Deputy Director General Chen Xu and Office of North American Affairs Counselor Deng Hongbo both emphasized that China hopes the doctor will not "politicize" her visit to the United States by making controversial comments casting Henan or China in an unflattering light. In response to Poloffs' observations, xxxxx at the reception acknowledged that Dr. Gao's transit was handled in a low-key way and that their worst fears were not realized during the doctor's Beijing stopover.

Daring Daily Breaks Silence, Criticizes Locals --------------------------------------------- -

9. (C) Following her departure, Dr. Gao's travails were broached for the first time by China's own media. On February 26, the Southern Metropolitan Daily ran a daring editorial on the case that criticized "local and regional leaders" and called for greater openness about AIDS and other issues of public concern. However, the editorial has not been widely picked up on the Internet, and so far, the paper does not appear to have encountered any negative repercussions. Randt

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E.o. 12958: decl: 04/16/2033 Tags: pgov, phum, prel, koly, ch Subject: hu jintao in charge of tibet policy; leadership unified, buoyed and constrained by nationalist sentiment

Ref: a. Osc cpp20080407530001 b. Osc cpp20080408507001 c. Osc fea20080407617427

Classified By: Ambassador Clark T. Randt, Jr. Reasons 1.4 (b) and (d).

Summary -------

1. (C) President Hu Jintao remains firmly in charge of China's policy on Tibet, with the leadership unified over Beijing's current hard-line stance and buoyed by rising PRC nationalist sentiment, xxxxx. Given Hu's background and experience in Tibet, as well as the "extremely sensitive" nature of the issue, no one would "dare" challenge Hu or the Party line, contacts say. While there may be differences in how various leaders publicly articulate China's Tibet policy, there are no substantive differences among the top leadership. Similarly, Embassy sources do not believe that two recent articles in Party-controlled southern newspapers signaled leadership debate or a review of policy, instead arguing the pieces perhaps reflect an adjustment in the Party's media strategy. The Party has been buoyed by rising nationalist sentiment, fueled in part by anger at the West over "biased" media reporting on Tibet and Olympic-related protests, but this nationalistic fervor also constrains future policy choices. Regardless, any modification of Tibet policy is unlikely in the short term, at least until after the Olympics, contacts say. End Summary.

Hu Jintao Firmly in Charge, Leadership Unified --------------------------------------------- -

2. (C) President Hu Jintao is firmly in charge of the PRC's Tibet policy, with the leadership unified over Beijing's current hard-line stance, several Embassy contacts told PolOffs over the past week. Sources argued that given Hu Jintao's own expertise and experience regarding Tibet (Hu was provincial party secretary in Tibet in the late 1980s), as well as the "extreme" importance and sensitivity of the Tibet issue, it would be virtually "impossible" for any leader to challenge Hu on Tibet. An issue as sensitive as Tibet policy would be controlled by a small group of top leaders, limited primarily to the nine-member Politburo Standing Committee (PBSC), meaning it is difficult to know precisely the content of leadership discussions on Tibet, longtime Embassy contact xxxxx. Nevertheless, "it is still quite clear," xxxxx argued, that Hu Jintao is "completely" in charge of the Tibet issue, and no other leader would "dare" confront Hu or the Party line over such a critical issue. Doing so would be "political suicide" and would make any leader vulnerable to charges of being "soft," or even being a "traitor," risking eventual removal, a la the ouster of former Party General Secretary Hu Yaobang in 1987, xxxxx averred.

3. (C) There is "absolutely no division" within the leadership on Tibet, xxxxx. For the Chinese leadership, Tibet is even more sensitive than Taiwan. Among the nine members of the PBSC who are controlling China's Tibet policy, no one has the stature or experience to challenge Hu, xxxxx said, noting that four are brand new members of the PBSC, and no one on the PBSC other than Hu has direct experience in Tibet. It was Hu Jintao, as then-Party Secretary in Tibet, who oversaw the "quick and effective

Sipdis suppression" of protests there in 1987 and 1989, which earned him "great praise" from then-paramount leader Deng Xiaoping and which was an important factor in his elevation to the PBSC in 1992, xxxxx recalled. Thus, Hu has "great confidence" when it comes to Tibet, putting him in a virtually unassailable position. There may be room within the leadership for expressing differences with Hu on issues such as Taiwan, economic development or political reform, but not on Tibet, xxxxx asserted.

Different Views Exist in Party, but No Disagreement at Top --------------------------------------------- -------------

4. (C) A range of contacts have acknowledged that there are differences of opinion within the Party and among elites regarding Tibet, though none believed this reflected any disagreement among the top leadership. For example,xxxxx acknowledged the presence of more "moderate" voices on Tibet within the Party, but he nevertheless stressed that it is Hu Jintao who is "completely" in charge of China's Tibet policy. Moreover, it

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is clear that those such as Hu favoring a "hard line" are calling the shots. (Note:xxxxx view that Tibet policy is more sensitive for China's leadership than even Taiwan, noting that despite its rhetoric, Beijing has de facto accepted the involvement of the United States in Taiwan, but China can never accept the "interference" of foreign powers in Tibet.)xxxxx, confessed that he "personally" favors a more "measured" approach to Tibet, to include dialogue with the Dalai Lama, given that "only the Dalai Lama" can unify the majority of the Tibetan community both within China and abroad.

5. (C) Separately, xxxxx "many elites" are advocating a reassessment of policy toward the Dalai Lama, questioning the wisdom of demonizing and refusing to negotiate with him. According to xxxxx however, apart from a "minority" of "elites" and "intellectuals," the majority of the Party rank-and-file, as well as "98 percent" of the public, support the current policy. Any serious disagreement over Tibet among the Party leadership is "simply unimaginable," xxxxx stated, a view separately shared xxxxx.

Public Statements: Difference in Nuance, not Substance --------------------------------------------- ----------

6. (C) While there may be differences in how various leaders have publicly articulated China's Tibet policy, there are no substantive differences among the top leadership, contacts asserted. For example, xxxxx said he does not believe there is disagreement between President Hu Jintao and Premier Wen Jiabao over Tibet, as some have speculated based on Wen's purportedly more "moderate" comments to UK Prime Minister Gordon Brown and his statement to the media in Laos on March 30 regarding the Dalai Lama. xxxx asserted that, on Tibet, Hu and Wen are like a "restaurant sugar packet," black on one side and white on the other, but still part of the same whole. In other words, Hu and Wen merely emphasize different aspects of the same policy. xxxxx said xxxxx"sensed" Wen may be "slightly more moderate" on Tibet than some other leaders, but he thought that represents Wen's style and does not imply a disagreement over official policy. xxxxx shared this view, attributing the Prime Minister's March 30 remarks to "Wen simply being Wen" and appearing more "moderate and reasonable" on almost every issue, even though his comments represented no serious departure from the official line.

Southern Media Pieces Reflect No Division over Policy --------------------------------------------- --------

7. (C) xxxxx did not think that two recent articles in Party-controlled southern newspapers signaled leadership debate or divisions, instead offering that the articles perhaps reflected an adjustment in the Party's media strategy. Both articles appeared on April 3 in Guangdong Provincial Party papers that have a reputation for pushing the limits of Central Propaganda Department (CPD) guidelines. The first, which appeared in a blog run by Southern Metropolis (Nanfang Dushibao), was critical of the Party's restrictions on reporting in Tibet, arguing that allowing foreign reporters to cover the story directly would provide a more accurate picture of events. The second, published in Southern Weekend (Nanfang Zhoumou), argued that most Tibetans are not separatists and do not support or participate in the unrest or advocate violence, and that such distinctions should be made when responding to the issue. The article also called for talks with the Dalai Lama. (See refs A-C.)

8. (C) xxxxx with whom PolOffs met in the last week had not read or heard of either article, which PolOffs interpreted as a sign that the pieces are not terribly significant. xxxxx, explicitly made this point, arguing that the article in the Southern Metropolis did not represent anything other than the "pro-Western slant" of the Southern Daily Media Group and "liberal southern journalists." The piece would only be significant if more "authoritative" media outlets had picked it up. xxxxx, thought it represented a desire among some elites for a review of Tibet policy but also noted that the piece was criticized by many internally in the Party. xxxxx, saying that the articles merely reflected the "traditionally liberal" stances of both newspapers, which are noted for "pushing the envelope" ("da cabianqiu," literally "playing edge ball").

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It is too early to tell whether these pieces have crossed a red line, xxxxx said, noting that both papers have often gotten into trouble with propaganda officials in the past.

9. (C) Surprisingly, even the xxxxx had not read either article that appeared in his group's newspapers. In response to PolOff's summary of the pieces, he strongly doubted they carried any political significance. Perhaps, he said, they represent an adjustment in the Party's media strategy. The Southern Weekend editor-in-chief must have had prior approval from Party authorities to publish the piece, xxxxx surmised, otherwise the editor would have been "dismissed immediately" for publishing such a sensitive article on his own. With Hu Jintao himself in charge of the media response to Tibet, xxxxx asked rhetorically, what newspaper editor would dare challenge the official media line, even implicitly? Therefore, the article's import, xxxxx claimed, is that it demonstrates the "slight loosening" of Party propaganda guidance on Tibet coverage beginning in late March, which purportedly allows for the "more nuanced" reporting advocated in the Southern Weekend article itself.

10. (C) Similarly, xxxxx was not aware of the articles. After listening to PolOff's explanation of them, however, xxxxx commented that the pieces likely represent the fact that there is "room for diversity" under the Propaganda Department's latest guidance. (Note: Despite this supposed "room" for more nuanced reporting on Tibet, xxxxx said Tibet is "far too sensitive" and his magazine has therefore decided "not to touch" the story for now.xxxxx, reportedly have been "ordered" to produce cover stories on Tibet under "very strict" guidelines from the Propaganda Department.)

Party Buoyed by Nationalist Sentiment... ----------------------------------------

11. (C) Almost all of xxxxx the Party has been buoyed by rising nationalist sentiment, fueled in part by anger at the West over "biased" media reporting on Tibet and Olympic-related protests.xxxxx all emphasized to PolOff that Chinese "anger" over the West's "bias" on Tibet is real, widespread and will have long-term effects. xxxxx them seemed themselves to be angry over Western media reporting, refusing to recognize the irony that for most Chinese, their only access to this "biased Western reporting" is through the official PRC press agency Xinhua's characterization of it. xxxxx emphasized that virtually "everyone" he knows is angry and believes that Western reporting, together with calls for boycotting the Olympic opening ceremony, implies support for Tibetan independence and makes the public feel that the West is trying to "keep China down." xxxxx, meanwhile, said nationalism is definitely surging, but he thought this sentiment is largely concentrated in the 25-35-year-old age group among both Hans and Tibetans.

12. (C) Whatever the causes of the surge in nationalism, the result has been a dramatic increase in support for the Party's policy on Tibet, contacts say. xxxxx said this outcome is partly a "natural" reaction to the fact that Chinese have in recent years become more nationalistic as a result of growing pride over China's rapid development, with the Tibet furor merely providing the most recent "spark" to inflame passions. xxxx separately acknowledged, however, that the Party's propaganda line has also purposefully stoked nationalistic feelings in order to rally the public in support of the Center's Tibet policy, and so far, it has been very successful in doing so. The recent Tibet crisis has "completely unified" the people behind the Party and Government, something that had been "unthinkable" throughout most of the 1980s and 1990s,xxxxx asserted.

...But Also Constrained by Popular Passions -------------------------------------------

13. (C) Although support for the Party over Tibet is currently quite high, popular passions also serve to constrain the leadership's options, xxxxx warned. Nationalism remains one "pillar" of Party rule, but central leaders do not want to let these feelings "spin out of control," xxxxx said. Perhaps reflecting these concerns, the Propaganda Department earlier this month reportedly directed that attacks on the Western press in China's official media be curtailed, according xxxxx

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xxxxx. That has not, however, stopped Chinese bloggers from continuing their attacks via the Internet, xxxxx observed.xxxxx also expressed concern about the long-term implications of the surge in nationalism, noting that "nothing is ever completely good." At any rate, there is "virtually no way" the Center could initiate a change in policy toward Tibet and the Dalai Lama, at least in the short term, given the popular anger over such issues, xxxxx said.

Policy Change Unlikely in the Short Term ----------------------------------------

14. (C) Major policy adjustment on Tibet is highly unlikely for the foreseeable future for a host of reasons other than popular sentiment, at least until after the Olympics, contacts say. Given Hu's own legacy in Tibet, where he cracked down on similar demonstrations in 1987 and 1989, Hu Jintao will likely be loath to adopt a "softer" line, lest his own policies and past actions come under criticism, xxxxx argued. Moreover, it will be almost "impossible" for Chinese leaders to reorient policy if they look like they are doing so under international pressure, xxxxx assessed. Moreover, xxxxx observed, domestic stability remains the leadership's top priority above all else, meaning there will "almost surely" be no relaxation of the current hard line on Tibet or in places like Xinjiang. xxxxx said he sensed Chinese leaders worry they could lose control of Tibet if they do not maintain tight control there, which would have both domestic consequences and could invite "unwanted interference" from India.

15. (C) While staging a successful Olympics is also a priority, xxxxx said he senses the leadership has assessed that at a minimum, athletes will show up to the Games. As a result, the Center is starting to adjust public expectations about the Games by saying that, even if there is a "boycott" of the opening ceremony, that is not important, given that it is the IOC and respective National Olympic Committees, not the Chinese Government, hat decide whether to invite national leaders. (Note: xxxxx disagreed, saying that, in his view, the success of the Games for Chinese leaders hinges on whether President Bush attends the opening ceremonies.) xxxxx said that Hu Jintao's comments on April 12 to Australian PM Rudd on the margins of the Bo'ao Forum, which were reported via Xinhua and reflected China's hard-line stance on Tibet to date, signaled that domestically there is "no room for debate" on the Tibet issue. Only after Tibetan areas have "settled down" and the Olympics have concluded, will there be any chance for a possible review of Tibet policy, he asserted. Randt

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E.o. 12958: decl: 07/23/2034 Tags: pgov, ch Subject: top leadership dynamics driven by consensus, interests, contacts say

Ref: a. Beijing 2063 b. Beijing 2040

Classified By: Political Minister Counselor Aubrey Carlson. Reasons 1. 4 (b/d).

Summary -------

1. (C) The need for consensus and the desire to protect vested interests are the main drivers of Politburo Standing Committee (PBSC) decision-making and Chinese leadership dynamics in general, according to Embassy contacts with access to leadership circles. Contacts have variously described relations at the top of China's Party-state structure as akin to those in the executive suite of a large corporation, as determined by the interplay of powerful interests, or as shaped by competition between "princelings" with family ties to party elders and "shopkeepers" who have risen through the ranks of the Party. End Summary.

Hu Jintao as Chairman of the Board? -----------------------------------

2. (C) Chinese Communist Party (CCP) Politburo decision-making is similar to executive decision-making in a large company, two well-connected contacts say. xxxxx that Party General Secretary Hu Jintao could be compared to the Chairman of the Board or CEO of a big corporation.xxxxx, used the same analogy in a May 18 meeting with PolOffs. xxxxx said that PBSC decision making was akin to a corporation in which the greater the stock ownership the greater the voice in decisions. "Hu Jintao holds the most stock, so his views carry the greatest weight," and so on down the hierarchy, but the PBSC did not formally vote, xxxxx. "It is a consensus system," he maintained, "in which members can exercise veto power."

3. (C) xxxxx had told PolOff previously that he knew "on very good authority" that "major policies," such as the country's core policy on Taiwan or North Korea, had to be decided by the full 25-member Politburo. Other more specific matters, he said, were decided by the nine-member PBSC alone. Some issues were put to a formal vote, while others were merely discussed until a consensus was reached. Either way, xxxxx stated sarcastically, the Politburo was the "most democratic body in the world," the only place in China where true democracy existed. xxxxx said that although there was "something" to the notion of a rough factional balancing at the top between the Jiang Zemin-Shanghai group and the Hu-Wen group, neither group was dominant, and major issues had to be decided by consensus.

Leadership Dynamics: Driven by Vested Interests --------------------------------------------- ---

4. (C)xxxxx asserted to PolOff March 12 that the Party should be viewed primarily as a collection of interest groups. There was no "reform wing," xxxxx claimed.xxxxx made the same argument in several discussions with PolOff over the past year, asserting that China's top leadership had carved up China's economic "pie," creating an ossified system in which "vested interests" drove decision-making and impeded reform as leaders maneuvered to ensure that those interests were not threatened. It was "well known," xxxxx stated, that former Premier Li Peng and his family controlled all electric power interests; PBSC member and security czar Zhou Yongkang and associates controlled the oil interests; the late former top leader Chen Yun's family controlled most of the PRC's banking sector; PBSC member and Chinese People's Political Consultative Conference Chairman Jia Qinglin was the main interest behind major Beijing real estate developments; Hu Jintao's son-in -law ran Sina.com; and Wen Jiabao's wife controlled China's precious gems sector.

5. (SBU) Note: In a development that could fan the "vested interest" rumor mill, China-related websites in the United States this week were reporting that a Chinese security technology company with links to Hu's eldest son, Hu Haifeng, was being investigated in Namibia on charges of corruption. A July 19 article in a Malaysian paper, cited by a U.S.-based dissident website, wenxuecity.com, reported that Hu Haifeng was a "potential witness" in the case but was not himself a suspect. The report said that the younger Hu was a former CEO of Nuctech and currently the Party Secretary of its

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parent company, Tsinghua Holding Co. Ltd. According to the China Digital Times website at the University of California Berkeley's China Internet Project, the Central Propaganda Department on July 21 issued orders to block any reference to the case in the PRC media. End note.

6. (C) xxxxx, had told PolOff earlier that leaders had close ties to powerful economic actors, especially real estate developers and corporate leaders, who in some cases were officials themselves. The same was true at the local level, xxxxx stated. He claimed that these interest networks had policy implications since most local leaders had "bought" their positions and wanted an immediate financial "return" on their investment. They always supported fast-growth policies and opposed reform efforts that might harm their interests, xxxxx. Vested interests were especially inclined to oppose media openness, he said, lest someone question the shady deals behind land transactions. As a result, the proponents of "growth first" would always be in a stronger position than those who favored controlling inflation or taking care of the poor, xxxxx.

7. (C) xxxxx that the central feature of leadership politics was the need to protect oneself and one's family from attack after leaving office. Thus, current leaders carefully cultivated proteges who would defend their interests once they stepped down. It was natural, xxxxx said, that someone like Xi Jinping, who maintained a non-threatening low profile and had never made enemies, would be elevated by Jiang Zemin and Zeng Qinghong. Xi would act to ensure that Jiang was not harassed or that Jiang's corrupt son would not be arrested, xxxxx.

Princelings vs. Shopkeepers ---------------------------

8. (C)xxxxx, separately described leadership alignments at the top of the CCP as shaped largely by one's "princeling" or "shopkeeper" lineage. In separate conversations in recent months, xxxxx said that some argued that China's "princelings," the sons and daughters of prominent Communist Party officials, including many who helped found the PRC, shared a perception that they, as the descendents of those who shed blood in the name of the Communist revolution, had a "right" to continue to lead China and protect the fruits of that revolution. Such a mindset could potentially place the "princelings" at odds with Party members who do not have similar pedigrees, xxxxx, such as President Hu Jintao, Premier Wen Jiabao and Party members with a CYL background, who were derisively referred to as "shopkeepers' sons." xxxxx had heard some princeling families denounce those without revolutionary pedigrees by saying, "While my father was bleeding and dying for China, your father was selling shoelaces." Goldberg

On other issues, however, informants told American diplomats that Chinese leaders were often left to pursue their own interests. Politburo member Zhou Yongkang, who heads up Chinese security services, is said to be closely linked with the state oil industry, for example. Jia Qinglin, in slot four of the Chinese leadership hierarchy, allegedly maintains close contacts with Peking's construction industry. Hu Jintao's son-in-law was the boss of the big internet firm sina.com. One source claimed that Wen Jiabao's wife controlled the precious gems industry.

In addition, many of the 25 Politburo members are thought to maintain "close ties" to real estate magnates, many of whom are likewise party functionaries. Posts within the Chinese Communist party, US diplomats believe, sometimes go to the highest bidder. In order to turn a quick profit, such functionaries, sources told the US, are especially eager to push for economic growth, no matter what the environmental or social price might be.