Rise in Number of Middle Easterners: Threat or

UNCLAS SECTION 01 OF 04 GUANGZHOU 020888 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM, DRL and INR PACOM FOR FPA E.O. 12958: N/A TAGS: PGOV PINR PREL SCUL SOCI CH SUBJECT: Rise in Number of Middle Easterners: Threat or Benefit to Guangdong? REF: A) Guangzhou 18749 (U) THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. NOT FOR RELEASE OUTSIDE U.S. GOVERNMENT CHANNELS. NOT FOR INTERNET PUBLICATION. ¶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 �00A;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