Identifier
Created
Classification
Origin
06GUANGZHOU30121
2006-09-15 09:55:00
UNCLASSIFIED
Consulate Guangzhou
Cable title:  

ASIA PACIFIC PARTNERSHIP ON CLEAN DEVELOPMENT AND

Tags:  SENV ENRG TSPL BEXP CH 
pdf how-to read a cable
VZCZCXRO4200
PP RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0121/01 2580955
ZNR UUUUU ZZH
P 150955Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC PRIORITY 3354
INFO RUEHBY/AMEMBASSY CANBERRA 0370
RUEHNE/AMEMBASSY NEW DELHI 0096
RUEHUL/AMEMBASSY SEOUL 1424
RUEHKO/AMEMBASSY TOKYO 1209
RUEHOO/CHINA POSTS COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 03 GUANGZHOU 030121 

SIPDIS

SIPDIS

STATE FOR OES/WATSON, OES/EGC-DEROSA-JOYNT AND OES/PCI
STATE FOR EAP/CM - WARD
STATE PASS TO CEQ CONNAUGHTON AND BANKS AND NSC FOR HUNTER
DOE FOR INTERNATIONAL/PUMPHREY AND GEBERT
EPA FOR INTERNATIONAL/MCASKILL

E.O. 12958: N/A
TAGS: SENV ENRG TSPL BEXP CH
SUBJECT: ASIA PACIFIC PARTNERSHIP ON CLEAN DEVELOPMENT AND
CLIMATE: CEQ CONNAUGHTON MEETS WITH AMCHAM SOUTH CHINA

UNCLAS SECTION 01 OF 03 GUANGZHOU 030121

SIPDIS

SIPDIS

STATE FOR OES/WATSON, OES/EGC-DEROSA-JOYNT AND OES/PCI
STATE FOR EAP/CM - WARD
STATE PASS TO CEQ CONNAUGHTON AND BANKS AND NSC FOR HUNTER
DOE FOR INTERNATIONAL/PUMPHREY AND GEBERT
EPA FOR INTERNATIONAL/MCASKILL

E.O. 12958: N/A
TAGS: SENV ENRG TSPL BEXP CH
SUBJECT: ASIA PACIFIC PARTNERSHIP ON CLEAN DEVELOPMENT AND
CLIMATE: CEQ CONNAUGHTON MEETS WITH AMCHAM SOUTH CHINA


1. (U) Summary: In his roundtable discussion with
American Chamber of Commerce South China representatives
September 1, White House Council on Environmental Quality
(CEQ) Chairman James Connaughton said that his mission in
China was to advance the Asia Pacific Partnership on Clean
Development and Climate (APP). The latter, he noted, is
designed to foster private-public cooperation and to
address pollution control, greenhouse gas reduction, and
energy security issues. AmCham representatives outlined
environmental protection efforts in their companies, and
discussed challenges they face in the region. End Summary.


2. (U) On September 1, CEQ Chairman Conaughton met with the
AmCham South China Board of Governors and selected company
representatives in Guangzhou. Connaughton said that his
mission in China was to advance the APP on pollution
control, greenhouse gas reduction, and energy security
issues. He said that the APP countries (the United States,
Australia, China, India, Japan, and South Korea)
represented 50% of current and future growth and energy use.
The challenge would be to find ways to break down the
shared commitments under the APP into practical
partnerships in the APP task forces. Mr. Connaughton
commented that he was working with China to bring its
industrial sector more fully into the partnership. One
desired policy outcome would be to eliminate tariffs on
environmental equipment and services, pulling the zero-
tariff issue out of the stalled Doha Round WTO negotiations.
He then opened the discussion to the AmCham members present
to hear about the opportunities and challenges they faced
in South China.

AmCham President
--------------


3. (U) AmCham President Harley Seyedin highlighted the
environmental protection efforts of South China companies,
taking note, in particular, of MBA New Plastics Technology
Co. and the Nine Dragons Paper Co. MBA, he said, uses 100%

recycled materials in its manufacturing, and Nine Dragons
is a waste paper export and recycling company. Seyedin
also mentioned that he was trying to organize an
international conference on energy and the environment to
Guangzhou in 2007, and he invited the Chairman ? and those
involved in the APP - to attend, if possible.


4. (U) Seyedin said that Guangdong had no significant coal,
oil, or liquefied natural gas (LNG) resources and must
either import these or electricity from hydroelectric
plants in Yunnan Province. (Note: According to Chinese
Government statistics, in 2005, Yunnan transmitted 6.296
billion kilowatt hours to Guangdong, while Guangdong
generated 216.3 billion kilowatt hours. End Note).
Seyedin noted, however, that in the last five-to-six years,
Guangdong had done more than any other province to improve
the local energy situation. An LNG plant and pipeline,
which had begun operations in the province, could
potentially supply the region with up to 10 million gallons
of imported LNG from Australia.


5. (U) On the environment, Seyedin said that 186 water
treatment plants were in the planning or construction phase.
He noted that one third of power generation in the region
came from "backyard" generation (small, unlicensed, highly-
polluting diesel generators used during periodic power
outages in the area). Once newer, larger power plants come
online, Seyedin said, backyard generators would disappear.
Nonetheless, the province would still likely experience
major shortages for the next five years.


6. (U) These newer power plants would be mostly be LNG-
fueled, as it was difficult to get a coal-fired plant
project approved by the Government. Hydroelectric power
transmitted from Yunnan Province supplemented local
production and was a source of electricity to energy-
intensive factories and residential areas in Guangdong.
When there was a drought in western China, electricity
imports declined, causing industries to rely more heavily

GUANGZHOU 00030121 002 OF 003


on local coal-fired power plants and their own backyard
plants.


7. (U) Seyedin said that the regional power grid could not
handle the load, and that there was significant energy loss
in transmission. He estimated that it would require USD 25
billion in upgrades for the grid to handle the load.

Nine Dragons Paper
--------------


8. (U) Ming Chung Liu, Nine Dragons' CEO, said that in
addition to waste paper and recycling business, Nine
Dragons operated its own waste water treatment plant and a
coal-fired power plant that used pollution reduction
equipment. Liu stated that "for better living tomorrow, we
need to protect the environment today." He pointed out
that Chinese-made desulfurization equipment using the semi-
dry or dry method did not work and the wet method was
better. As for marketing U.S.-manufactured environmental
equipment to Chinese consumers, Liu suggested that the
Chinese did not want to read studies or reports; "they need
to see a sample, they need to see how it works."

Northwest Airlines
--------------


9. (U) Northwest Airlines General Manager for China Sandeep
Bahl said improvements in airspace management near airports
were needed to minimize "circling" and reduce fuel
consumption. Northwest no longer used airplane power units
(APUs) when planes were at an airport in an effort to
conserve fuel; Chinese carriers, however, still used them.
He added that he would like to see a sector-wide move
towards motor-driven taxiing instead of engine taxiing.
Bahl stated that while it was good that the APP promoted
discussions with businesses, "decisions are made on the
government level, and business complies."

FedEx
--------------


10. (U) Alex Yim, FedEx's Managing Director of Operations
for Southern China, echoed Bahl's comments on fuel
conservation, adding that non-Chinese carriers were still
not permitted to fly more direct routes, such as the "L888"
route across China; this would allow companies to save time
and fuel. Yim said that China is now focusing more on
environmental issues; recent well publicized environmental
disasters had, in fact, pushed the Government to improve
its efforts.

Closing Remarks
--------------


11. (U) Connaughton discussed his meetings with Chinese
officials in Beijing, saying that the Vice Premier with
whom he met was "bold" when discussing opportunities for
cooperation. However, Connaughton said that the problem
now is getting the bureaucracy to implement things. The
United States and China are coal consuming nations,
Connaughton said, and we had a special responsibility to
improve our environmental protection efforts. He stated
that the "payback" was real in human health terms. He
noted that many of the environmental systems were cheaper
to install in China than in the United States. Connaughton
said that while cost/benefit analysis and pricing
structures were poor in China, that there was no reason why
China could not be right behind the United States in
getting coal-fired plants to reduce pollution by 90%.
Connaughton also told the AmCham representatives that China
needed a national fuel standard and should develop clean
dieselization.


12. (U) The Chairman expressed his desire to see CEOs of
Chinese public and private companies talking to CEOs of
other countries' companies and sharing knowledge and best
practices to reduce pollution. He suggested that AmCham

GUANGZHOU 00030121 003 OF 003


get in touch with its companies? CEOs and start a
grassroots network to initiate this type of international
dialogue.


13. (U) AmCham Participants

Harley Seyedin, AmCham President
Tim Wen, Allway Co. President
Simon Foo, AIU Guangzhou General Manager
Christian Doeringer, Hewitt General Manager
Charles Hubbs, Guangzhou Fortunique CEO
Tony Zou, Proctor and Gamble Director of Government
Relations
Alex Yim, FedEx Managing Director of Operations
Thomas Podgurski, Royal Service Air Conditioning System
Operation Director
Brad Mingus, Lexmark Director of Hardware Operations
Ming Chung Liu, Nine Dragons Paper CEO
Eric Wang, GISE-MBA New Plastics Technology General Manager
Frederick Hong, Frederick Hong Law Office
C.K. Lim, ENSR General Manager
Andy Qian, Elevation Technology General Manager
Sandeep Bahl, Northwest Airlines General Manager for China


14. (U) Chairman Connaughton has cleared this message.

GOLDBERG