Cablegate: Shenzhen's Planned Comprehensive Reforms: What Will They

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

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