Rise in Number of Middle Easterners: Threat or

UNCLAS SECTION 01 OF 04 GUANGZHOU 020888

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TAGS: PGOV PINR PREL SCUL SOCI CH
SUBJECT: Rise in Number of Middle Easterners: Threat or
Benefit to Guangdong?

REF: A) Guangzhou 18749

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1. (SBU) Summary. Over the past five years, the number of
Middle Eastern businessmen in Guangdong Province has
exploded to an estimated 7,000 (the majority coming from
Yemen, Jordan and Syria). Additionally, during the Canton
Trade Fair, as many as 11,000 Middle Eastern visitors flood
the city's now numerous Middle Eastern restaurants. Both
professional and personal frustrations with discrimination
from the Chinese government, however, have encouraged all
three of the major Middle Eastern groups to want to create
business associations to protect the rights of their
communities. Most of the Middle Easterners we met are
suspicious of their Muslim Chinese brethren (especially
those from Xinjiang),and prefer to focus on business,
rather than religious and political issues. End Summary.


2. (SBU) Since the Tang Dynasty, Muslim traders have been
visiting Guangdong Province. More recently, in the 1990s,
Middle Eastern businessmen came to Southeast Asia and,
following the Asian Financial Crisis, to South China for
business opportunities. In the past five years, cheap
consumer goods from China have flooded Middle Eastern
markets. According to the Ministry of Commerce, From
January to February 2006, Guangdong's exports to the Middle
East reached USD 940 million, up 37.4 percent from the same
period of last year, accounting for 19.7 percent of China's
total exports to the Middle East. Major destination
countries for Guangdong's exports include the United Arab
Emirates, Turkey and Saudi Arabia. Poloff met with
businessmen from Yemen, Jordan and Syria to learn about the
background and goals of this recent flood of Middle Eastern
businessmen.

Background on Foreigners in Guangzhou
--------------

3. (SBU) It is difficult to estimate Guangdong Province's
exact foreign population, since a large portion of expats
are transient businesspeople and the Chinese government is
reluctant to reveal its own data. For example, in mid-2005,
the Guangdong Foreign Affairs Office refused a petition from
the Guangzhou Consular corps to reveal statistics on
foreigners in South China. Only in September 2005,
following minor break-ins on the Polish and U.S. Consulates
in Guangzhou, did the Guangzhou Public Security Bureau (PSB)
reveal statistics on foreigners in Guangzhou. The Guangzhou
PSB stated that Guangzhou has 15,000 foreign residents and 2
million foreign visitors annually.


4. (SBU) According to the chief editor of "That's PRD" (the
leading expat magazine for South China),these numbers are
too low. The editor estimated that Macau and Zhuhai
together have about 14,000 foreigners, and Guangzhou has
about 50,000-60,000 foreigners (if Hong Kong and Taiwan
residents are included, the number is closer to 100,000).
The editor said that unquestionably, the Middle Eastern
population, estimated at about 15 percent of the total
foreign population, is the fastest growing segment in all of
South China.

The Guangdong Middle Eastern Community
--------------

5. (SBU) According to the Guangdong Muslim Association
(GMA),Guangdong Province has between 10,000-15,000 foreign
Muslims, mostly in Guangzhou and Shenzhen (see ref A),of
which, about 7,000 are from the Middle East. During the bi-
annual Canton Trade Fair, a local Guangzhou magazine
reported that as many as 11,000 Middle Easterners come to
Guangzhou. Based on various Consulate sources, the largest
number of Middle Eastern businessmen in Guangdong Province
come from (in order) Yemen, Jordan (some of whom are
actually Palestinian) and Syria. A smaller group of traders
come from Egypt, Algeria and Saudi Arabia.


6. (SBU) Many of these traders have made a certain section
of downtown Guangzhou as their business headquarters.
According to a Jordanian source, Guangzhou's Fuli Business
Centre, near several wholesale markets, has become known as
the "Arabic Center" with over 170 Middle Eastern businesses
in the building alone. In order to gain more leverage
against the Chinese government and fight against local

GUANGZHOU 00020888 002 OF 004


discrimination, Yemenis, Jordanians, and Syrians, have all
have sought to create business associations, though so far
unsuccessfully. In contrast, the Israeli Chamber of
Commerce recently established itself with only three
members.

Explosion of Middle Eastern Restaurants
--------------

7. (SBU) One important indicator of increased Middle
Eastern business in Guangdong Province is the rapid surge of
new Muslim restaurants. The Guangdong Muslim Association
reports Guangdong Province has several thousand Muslim
restaurants, both large and small, including around 200
Xinjiang restaurants in Guangzhou City. Foreign Muslims
have opened approximately 100 Arabic restaurants in
Guangdong. Only a few years ago there was only one halal
(Islamic kosher) restaurant in Guangzhou City, now there are
18, including cuisine from Syria, Lebanon, Egypt and Turkey.
For example, a Syrian restaurant across the street from
Guangzhou's "Arabic Center" grew from a terrace-style caf
to a multiple room restaurant in only a few years. A Syrian
restaurant owner (with restaurants in Guangzhou and Yiwu,
Zhejiang),however, said the restaurant business is good,
but unsteady. Guangzhou's restaurant profits are greatly
dependent on the influx of travelers during the bi-annual
Canton Trade Fair, because local Chinese do not usually
frequent these restaurants. In Yiwu, the restaurant owner
said, trade with Muslim countries is less dependent on
annual fairs and Middle Eastern restaurants are more
profitable.

Yemenis, Jordanians and Syrians
--------------

8. (SBU) The largest and most organized group of Middle
Easterners is from Yemen. A Yemeni/naturalized-Canadian
citizen, who is also the honorary Yemeni trade consul in
Guangzhou, told Poloff there are around 1,000 Yemenis
businesses in Guangdong. The SCMP estimated the entire
Yemenis community at around 5,000 people. In 2005, Yemenis
businessmen tried to better organize their community through
data collection and training for newly-arrived traders. Led
by the honorary trade consul, the Yemenis held three large
meetings in Guangzhou with their trade minister and
ambassador to China. The meetings were eventually shut-down
because the Chinese government claimed the group need a
permit to assemble such a large number of people (around
200). Instead, Yemenis businesspeople meet informally and
consult new members of the community about business and
social life in South China.


9. (SBU) The second biggest group are the Jordanians,
estimated at around 1,000 businesses. The Jordanians are
currently seeking to create a Jordanian Chamber of Commerce
to organize the community and better represent their rights.


10. (SBU) The Syrian numbers are smaller than the other two
groups. The Syrian restaurateur and clothing trader said
the Syrians tried to create a Syrian business association
but the project failed. According to the restaurant owner,
the business association failed because, first, many of the
businessmen were too busy. Second, the government was very
suspicious of Arab businessmen and, according to the
restaurant owner, the government "did not want them to form
a group." Instead the Syrians meet informally to discuss
the business climate.

Government Harassment: "Worse than Illegal Chinese
Businesses"
-------------- --------------

11. (SBU) All of the businessmen agreed that there is great
distrust and discrimination by the Chinese government and
local Chinese businesses toward Middle Easterners.
Consequently most of the businessmen prefer to give the top
management positions in their firms to family members or
other Middle Easterners. However they generally said they
would avoid hiring Xinjiang Muslims to work in their
businesses.


12. (SBU) One businessman surveyed said that legal Middle
Eastern businesses, at times, "receive worse treatment then
illegal Chinese businesses." In general the businessmen
complained of unsupportive protection from the Chinese
Public Security Bureau (PSB). For example, the Yemenis
trade consul said that he had tried to report cases of
Yemenis businessmen being kidnapped by their creditors or

GUANGZHOU 00020888 003 OF 004


professional bill collectors. Yemeni leaders had tried
unsuccessfully to start a dialogue with the authorities by
such means as contacting the China Council for Promotion of
International Trade and the Guangzhou Police's economic
crime division. The PSB were unwilling to take such cases,
claiming they are business transaction cases and should be
handled by the courts. Thus the Yemenis trade consul was
forced to seek help from the Yemenis Embassy in Beijing. In
November 2005, as reported in Hong Kong press, Guangzhou
police stopped more than 200 businessmen from the city's
Yemeni community from meeting at a hotel because the group
did not have approval for a mass gathering.


13. (SBU) In another example, the Yemenis trade consul
himself was personally threatened by Chinese thugs to give
up 50,000 RMB ($6,250 USD). His only recourse was to tape
record the "shake-down" conversation and threaten that the
Canadian and U.S. Consulates in Guangzhou (because of his
Canadian citizenship and his children's U.S. citizenship)
had great influence in China and would protect his company
at all cost.


14. (SBU) The Syrian restaurant owner complained of regular
"inspections" by police carrying cameras at restaurants and
cafes frequented by customers from the Middle East
(particularly during the Trade Fair). Besides increased
surveillance, the Syrian businessman also complained that he
personally could only get visas for a maximum of five
months. Moreover, he claimed that Guangzhou government had
a quota of only 50 foreign chefs who are allowed to work in
the city.

Mafia and Corruption
--------------

15. (SBU) The businessmen surveyed also revealed some of
the corruption and dangers of the lucrative South China
manufacturing world. The Jordanian contact said if his
company has problems, they usually cannot rely on the
police. Instead, he claimed, they must call "the Chinese
mafia" to threaten the individuals causing trouble. The
prices vary, but generally the mafia prefers "in-kind
transfers", such as an invitation to KTV (karaoke) bars,
jewelry, and cars. The Syrian restaurant owner also
described how bribes are a fact of business. The man matter-
of-factly opened his desk drawer and pulled out wad of
awaiting envelopes with bribes inside (the so-called
"hongbao"). The Syrian man said that even Syrian diplomats
in Beijing are so tempted by profits in the Pearl River
Delta that they have their own trading companies, in
violation of Syrian laws.

Religious and Family Life
--------------

16. (SBU) Increasingly many of the Middle Eastern
businessmen are hoping to settle in Guangdong Province and
bring their families with them. Middle Eastern businessmen,
like many expats, would like ideally to create a religious
and social environment similar to their home countries. In
reality, China's strict laws on religious freedom and
religious education, limits their activities. For example,
Guangdong Province has a limited number of mosques.
Guangzhou City has only three mosques and one ancient tomb.
Shenzhen, a city of nine million, has only one mosque. The
Guangdong Province Muslim Association has complained to the
Chinese Muslim Association headquarters in Beijing that
Guangdong's 11 imams are insufficient (reftel). Newspaper
reports have mentioned overflowing mosques during Friday
prayers, especially during the Canton Trade Fair. The
Syrian restaurant owner complained there no children
services at mosques he had visited. Some Middle Eastern
restaurants have tried to fill this void by building small,
unofficial mosques and carpeted pray areas inside their
restaurants. Some of these underground-type groups have
been closed down by the Chinese government. One such
restaurant owner complained to the Yemenis trade consul
about the situation. The trade consul, replying
pragmatically, said a Muslim can pray anywhere, anytime, and
that creating hidden mosques was too great a risk.


17. (SBU) Religious and Arabic education is also limited.
There are no Islamic institutions of higher education in
South China. In terms of children's education, only one
mosque in Guangzhou teaches Arabic. An informal Jordanian
school also exists, but some Jordanians avoid it since
teachers are mostly Jordanian businessmen's spouses with no

GUANGZHOU 00020888 004 OF 004


pedagogical training or set curriculum. Consequently, some
Jordanian businessmen have sought to improve the situation.
The Jordanians are planning to first, establish a business
association to organize their community, second, create
official Jordanian and Arabic schools for their children,
and third, bring Jordanian doctors from home to create
Arabic hospitals and clinics.

Relations with Local Muslims
--------------

18. (SBU) Relations with local Muslims are poor if non-
existent. Except for occasional meetings at Friday prayers
in mosques (foreigners and Chinese allowed to worship
together),most of the businessmen said they preferred to
avoid the local Muslims, although the Jordanians did employ
a Hui Muslim woman. Some of the Middle Eastern restaurants
employ only Hui Muslims, since they are more suitable for
halal cuisine, while others merely have their female staff
wear head coverings. None of the businessmen said they had
ever visited or used the services of the Guangdong Province
Muslim Association. The businessmen particularly did not
get along with Xinjiang Muslims. The businessmen called
Xinjiang people "gangsters" and "knife-carrying hooligans".
One of the Jordanian contacts said that in certain areas of
Guangzhou City, even the police are afraid of interfering in
Xinjiang people's problems. This same Jordanian had an
encounter with two Xinjiang men when they tried to steal his
bag on the way to his office. He called the police, who
claimed they could not help until violence had actually
occurred.


19. (SBU) The businessmen surveyed also did not acknowledge
any significant Muslim missionary work by Middle Eastern
businessmen. Instead they argued most businesspeople were
solely focused on making money in China. Nevertheless, a
noted American scholar on the subject wrote to Poloff that
"large numbers of Yemenis [in South China] merit watching as
they have been doing a lot of missionary work and have been
supportive of Salafi [fundamentalist Chinese Muslims]
groups."

Comment: Money more than Mohammed
--------------

20. (SBU) In 2002, Guangzhou received some attention when
the Asia Wall Street Journal reported that an Egyptian and
two Yemeni nationals, were cited as having started an Al-
Qaeda web site called maalemaljihad.com. Nevertheless, the
significant rise in the number of Middle Easterners in
Guangdong Province seems less a symbol of a rising terror
threat in South China and more a symbol of the powerful
manufacturing sector in the Pearl River Delta. The
businessmen surveyed seemed focused on creating the most
profit for themselves and not ideologically bent on a
religious mission or nefarious activities in China. A more
ideologically driven element could exist in Guangdong
Province, however, Post has no accurate way of measuring
this nor did our interlocturs said they were not aware of
such groups. In fact, many of the businessmen seemed to
have poor relations with local Muslims. Instead, like many
expats, they would like to insulate themselves from the
Chinese and create their own institutions (schools, mosques,
hospitals, etc.) that would emulate their lifestyles in the
Middle East.


21. (SBU) The experience of the Middle Easterners is also
reflective of the current investment climate in South China.
Many Middle Eastern small and medium size-businesses in
China still face difficulties working through the often
corrupt and Byzantine-like Chinese bureaucracy. Unlike
their U.S. or British counterparts working in multi-national
corporations, many of these Middle Eastern businessmen feel
"alone" in China, since they are independent traders. In
South China, there are no Middle Eastern business
associations or diplomatic representation. Therefore, the
Middle Easterners are seeking to organize themselves (at
least as national groupings, since there is no hope of a Pan-
Arab union) to create a more unified and powerful voice of
protection.

MARTIN