Xiamen Mayor on Progress, Future Expansion

UNCLAS SECTION 01 OF 02 GUANGZHOU 030511

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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
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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
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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
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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
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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
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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