Xiamen Mayor on Progress, Future Expansion

UNCLAS SECTION 01 OF 02 GUANGZHOU 030511 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM, EAP/RSP/TC STATE PASS USTR STRATFORD USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE USPACOM FOR FPA E.O. 12958: N/A TAGS: PREL PGOV ECON PINR TW CH SUBJECT: Xiamen Mayor on Progress, Future Expansion (U) This document is sensitive but unclassified. Please protect accordingly. Not for release outside U.S. government channels. Not for internet publication. ¶1. (U) Summary: Xiamen mayor Zhang Changping told the Consul General September 10 that the city's continuing development was dependent on the expansion of its infrastructure, especially its cargo transport system. In addition, he acknowledged the importance of further developing Xiamen's economic relationship with Taiwan and U.S. companies; like other cities and provinces, he took note of the work that needed to be done to protect the environment and conserve energy. The Mayor closed by welcoming the opening of an American consulate in Xiamen. End Summary Mayor See Steady Progress Towards Proposed Goals -------------- -------------- ¶2. (U) During his meeting with the Consul General, Mayor Zhang reviewed Xiamen's goals in its 11th 5-year plan. GDP, he said, had already risen by 15.5 percent and revenue had increased by 29 percent. The city planned to increase per capita GDP from $5,000 to $10,000 by 2010. Like other Chinese cities and provinces, the Mayor was sensitive to the central government's desire to protect the environment and reduce energy usage. ¶3. (U) Of prime importance to the city's economic development was the expansion of its infrastructure. According to the Mayor, Xiamen's port is the transit point for up to one-half of Fujian Province's trade; much of this trade with the United States, with exports of $2.2 billion and imports of $0.9 billion. The Mayor was well aware of the debate going on in the U.S. regarding the trade deficit and said he would like to find ways to diminish the imbalance. ¶4. (SBU) Mayor Zhang wants the city to be a center for U.S. products and a logistical center for air cargo and would like the U.S. to approve flights between the city and Chicago. Like his fellow mayors in Quanzhou and Putian, which the CG also visited on this trip, he views an agreement with Taiwan on the three-links as a major way of fueling the city's - and the province's - economic prospects. The Mayor also proudly pointed to recent U.S. investments in the region and noted the future opening of Kodak's 
digital graphics communication center, scheduled for early 2007, as well as the plans by the U.S. firm APC to assure uninterrupted power supply services in early 2007. Xiamen Airlines: Yes for Now to Boeings, but Maybe "No" if U.S. Military Sales to Taiwan Continue -------------- -------------- ¶5. (U) The Mayor took note of expansion plans for Xiamen Airlines, one of the most profitable airlines in China. Currently the air5line have 38 aircraft; it would like to expand to 65, with the additional planes providing long haul services. In addition, AIG had purchased Boeings to rent to Xiamen Airlines. AIG, he said, had plans to create a regional center and he hoped the company would build a leasing center for additional planes. However, he cautioned, if the U.S. government continued selling weapons to Taiwan, China might discontinue purchasing planes from Boeing. Xiamen Pleased With Relationship With Taiwan, Sees Some Room for Improvement -------------- -------------- ¶6. (U) Expansion of the relationship with Taiwan was clearly on the Mayor's mind; much of Xiamen's economic success remains tied to investment from and trade with Taiwan. Xiamen should be further ahead in its development, he said, given its prime location between the Yellow River Delta and the Pearl River Delta. However, a key limit on its growth was the cargo transport system; only 20 boats traveled from Jinmen to Xiamen each day and that number could easily be many multiples higher if there were direct transport across the Strait. Mayor Zhang said that he supported President Hu Jintao's policy of duty-free imports of Taiwan fruit and he called on Taiwan to relax more of its trade policies in advance of the upcoming October 18-19 agricultural fair. Graduates Continue Migration -------------- GUANGZHOU 00030511 002 OF 002 ¶7. (U) In response to the CG's question about labor shortages in Xiamen, the Mayor said that he had seen reports that Xiamen was not able to provide sufficient employment for its college graduates and that many of them were forced to move to other cities. The Mayor claimed that there was no problem, as Xiamen had a higher percentage of university graduates than any other Chinese city and did not need the large number of chemists, accountants and other professionals seeking work in the city. He did acknowledge, perhaps undercutting his argument a bit, that Xiamen could not offer salaries as high as those in Guangzhou, Beijing, and Shanghai. Consulates Opening Doors -------------- ¶8. (U) The Mayor spent a good part of the time praising Xiamen's new consular district and said it currently housed consulates from the Philippines, Singapore, and Thailand, with South Korea and Indonesia expected to open up soon. The Mayor enthusiastically welcomed the United States to open a consulate, noting that space could be reserved for such an eventuality if the Consul General were able to get approval. The CG pointed out that this was a USG-PRC central government issue that would require diplomatic discussions in Washington and Beijing. GOLDBERG