Harvard-Trained Communists Vie for Power as Party Gathers

Neel Kashkari, head of global equities at Pacific Investment Management Co., talks about investment strategy in China, the Chinese economy and the outlook for U.S. markets.

Li Yuanchao serves the Chinese Communist Party as head of its organization department. For a few months in 2002 he had a different overseer: Larry Summers.

Li controls the patronage system of the 82 million-member party that this month is unveiling its next generation of leaders, overseeing an apparatus that names cadres to posts in state-owned companies including China Mobile Ltd. (941) and acting as career manager for thousands of rising officials. He took part in an executive training program at Harvard University when former U.S. Treasury Secretary Summers was the school’s president. Li reminded Summers of that when the two met in 2010 in Beijing.

SPECIAL REPORT: The New China Leadership

Li is the most prominent graduate of a program that has brought rising Chinese leaders to Harvard’s Cambridge, Massachusetts campus for more than a decade. The initiative underscores the fact that even as the U.S. and China are at odds over issues ranging from the value of the yuan to Syria, top politicians in China are increasingly drawing on their U.S. experiences in setting policy for the world’s second-biggest economy, said Anthony Saich, a professor at Harvard’s Kennedy School of Government who oversees the program.

“They’re exposed to America, and best practices from around the world,” Saich said in an interview in Beijing. “One of the things they often say to me is, ‘well we don’t agree with you any more than we did before, but at least we have a sense of why you think the way you do.’”

Top Speakers

Other graduates of the program at the Kennedy School’s Ash Center for Democratic Governance and Innovation include Commerce Minister Chen Deming and Zhao Zhengyong, the governor of Shaanxi province. They get face time with some of Harvard’s most famous professors. In one program, officials attend a series of seminars Saich calls “star turn.”

Want to learn about how a country uses soft power? Joseph Nye, the political scientist who coined the term, holds a seminar on that. What about the U.S. presidency? Roger Porter, who served in three U.S. administrations, including as assistant to the president for economic policy under George H.W. Bush, meets with the students. Economics? Summers will lecture on the U.S. or global economy “or whatever’s on Larry’s mind at any particular time,” Saich said.

Harvard’s Kennedy School has been expanding its offerings to Chinese officials and executives at state-owned enterprises since the first program -- for senior leaders at the vice- minister level -- began in 1998, sponsored by Hong Kong’s New World Development Co. About 150 officials have been through the program since its inception, with 20 each year at most, Saich said.

Local Leaders

In 2001, the school added a second program, for officials from local governments across China, called “China’s Leaders in Development,” taught both at Harvard and at Beijing’s Tsinghua University, sponsored by direct sales company Amway Corp. That program takes 50 to 60 officials each year, Saich said.

“The U.S. is probably seen as a good thing in their career trajectory,” said Saich, who works with Li’s department to bring Chinese officials to Harvard. “Virtually all of them get promoted, but then of course they are probably only in the program in the first place because the Organization Department has selected them for promotion and having a little Harvard plaque on your wall is a good thing.”

Huntsman Meeting

Students in this program spend time in Washington meeting with lawmakers and officials. Their U.S. tour takes them to Grand Rapids, Michigan, to meet with executives at Amway, which pays for all of the officials’ expenses in the U.S., including their lodging at Soldiers Field Park across the Charles River, Saich said. One year they went to Utah, meeting with the then- governor Jon Huntsman, who later went on to become the U.S. ambassador to China.

In 2009, the school added a program to train top officials in the Shanghai city government. Last year, the state-owned China Southern Power Grid Co. approached Harvard about starting a program for its rising executives, said Edward Cunningham, an assistant professor at Boston University who co-chairs the program with Saich.

This week, some of those graduates are inside Beijing’s Great Hall of the People attending the 18th Communist Party Congress where they will help choose China’s next generation of leaders -- or be chosen themselves. Li, Chen and Zhao are all delegates to the congress this year. One of Li’s lieutenants at the organization department, Zhang Jinan, is also a graduate of one of the programs and a party congress delegate.

Unbalanced Development

At the opening of the congress yesterday, President Hu Jintao said that China’s economic development remains “unbalanced, uncoordinated and unsustainable,” and leaders must work harder to solve those problems. Hu said China must double per-capita income by 2020.

It’s more than just book learning. By Li’s own account, he used some of the lessons from a Kennedy school course on crisis management upon returning to his native Jiangsu province in 2002 when, as party secretary for Nanjing, he was confronted with a food-poisoning outbreak.

“In the process of dealing with this emergency, the Harvard training benefited me,” Li recalled in an Oct. 2009 speech at Harvard. “More than 200 lives were saved, the suspect was caught within 36 hours, and we as local people received recognition from the central government.”

Li didn’t respond to a faxed request for comment about his Harvard experience.

Vice Mayor

Li, who turns 62 this month, was born a year after the 1949 founding of the People’s Republic. He is the son of former Shanghai vice mayor Li Gancheng, according to Cheng Li, a scholar at Washington’s Brookings Institution who analyzes Chinese politics. His pedigree makes him a so-called princeling like Vice President Xi Jinping, whose father was a prominent revolutionary. Li also served in the Communist Party’s Youth League in the 1980s when Hu headed the organization.

“I think the senior leaders are looking for bridge people, who can speak to the outside world with that empathy and emotional intelligence,” said Cunningham, who accompanied Li around Boston in 2002 during his stay at Harvard. “Someone like Li Yuanchao is pretty well positioned to provide that bridge.”

While Li was seen as a contender for the powerful Politburo Standing Committee in a Bloomberg News survey of 26 analysts of Chinese politics published in September, analysts including Saich now say he’s unlikely to win a spot.

Another Kennedy School graduate from China is Bo Guagua, the son of disgraced former Politburo member Bo Xilai. He earned a master’s degree in public policy this year, university records show. The Central Committee on Nov. 4 affirmed Bo Xilai’s expulsion from the Communist Party, after his wife was convicted in August of murdering British businessman Neil Heywood.

Other Relatives

Harvard also attracts other relatives of China’s top leaders. Chen Xiaodan, the granddaughter of top planning official Chen Yun and daughter of China Development Bank Corp. Chairman Chen Yuan, graduated from the business school with an MBA this year, school records show. Xi Mingze, Xi Jinping’s daughter, is an undergraduate at Harvard College.

The Chinese characters for Harvard in Chinese are “Ha Fo,” or “laughing Buddha.” For decades, China’s top officials have sought access to foreign schools, said Jerome Cohen, a New York University law professor and adjunct senior fellow of the Council on Foreign Relations in New York.

Open Policy

“It’s been going on since the beginning of the Open Policy, at least,” said Cohen, who worked in Beijing from 1979 to 1981, referring to the period of economic opening that began more than three decades ago. “High officials were constantly looking for scholarships to fund favorite people, children, nieces, nephews, mistresses, whatever, to study overseas.”

There are 686 full-time students from China enrolled at Harvard for the 2012-2013 academic year, more than from any other foreign country, and almost half of them, 331, are in the Graduate School of Arts and Sciences, according to the Harvard International Office website. The Harvard Kennedy School of Government, where Li and Bo attended, has 32 Chinese students, according to the site.

Harvard’s links to China go back at least to 1879, when Ko Kun-Hua, a Chinese language teacher, was hired, according to the university website. Ko died of pneumonia less than three years after arriving and his books became part of the Harvard Yenching Library, which now has more than 1 million volumes.

GE Training

Saich said the Kennedy School’s program with China is the oldest of its kind in the U.S. Harvard’s offerings has since been augmented by programs at places including Stanford University and the General Electric Co. training center in Crotonville, New York.

Li is quick to talk about his time at Harvard with visiting U.S. officials also connected to the school.

When Summers was director of President Barack Obama’s National Economic Council in 2010, he met Li in Beijing. Li talked to him about how he studied the economic theories of Summers’s uncle, Nobel economics laureate Paul Samuelson. A year earlier in Washington, Summers met another top Chinese official, Liu He, who was a Kennedy School graduate and party congress participant.

Liu, a top official on the finance and economics panel that advises China’s leaders, graduated with a master’s in public administration from Harvard in 1995, school records show.

In a brief interview yesterday in Beijing, Liu said a pickup in China’s growth next year depends on the external environment, especially Europe, where the economy may improve “a little bit.”

His career path since his time at Harvard offers another link between the university and China’s rulers. Liu has been called “China’s Larry Summers.”

To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net; John Lauerman in Boston at jlauerman@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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