Taiwan Businesses in Dongguan: Well Organized and

UNCLAS SECTION 01 OF 02 GUANGZHOU 030900 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM PACOM FOR FPA E.O. 12958: N/A TAGS: ECON PREL CH TW SUBJECT: Taiwan Businesses in Dongguan: Well Organized and Politically Neutral (U) This message is sensitive but unclassified. Please handle accordingly. ¶1. (SBU) Summary: Dongguan's Taiwan Business Association (TBA) leaders told Econ/Poloffs September 26 that their focus was on business and community issues, not politics; like other Taiwan businesspeople in China, they prefer to keep their politics to themselves, even declining to comment on a recent meeting between China and Taiwan on cross-strait flights. The association, with over 3,500 member companies, is China's largest. Stricter enforcement of environmental regulations, however, has already forced some Dongguan-based Taiwan businesses to move into China's interior. In the absence of a Taiwan official presence on the mainland, the association provides important consular-related services locally, including prison visits and death case assistance. End summary. ¶2. (SBU) Econ/Poloffs met on September 26 with Samuel Kuo, President of the Dongguan TBA, who is also Chairman of Samson Group, the largest China-based exporter of furniture to the United States. Samson's two factories (located in Dongguan and Shanghai) employ approximately 13,000 people and manufacture OEM under the name Lacquer Craft. Also attending the meeting were Mohammed Amini, President of Lacquer Craft, and Hawk Chiu, Kuo's Executive Secretary. SIPDIS Large and Well Organized -------------- ¶3. (SBU) Dongguan has one of the highest concentrations of Taiwan citizens on the mainland, with an estimated 120,000 Taiwan citizens and 6,000 Taiwan firms. According to Kuo, the Dongguan TBA was established in 1993 and now has 3,500 member companies, making it almost twice as large as the next largest TBA, located near Suzhou in Jiangsu Province. The main office has one full-time Taiwan employee, 12 Chinese staff, and one liaison from the Taiwan Affairs Office. In addition, each of Dongguan's 32 districts has a small TBA office with one or two local staff. ¶4. (SBU) Kuo said China has a total of 99 TBAs, 50 percent of which have less than 100 members. Chinese officials oversee the activities of the smaller TBAs. However, the TBAs in the Pearl River Delta cities of Guangzhou, Dongguan, and Shenzhen, and Fujian's Xiamen have a greater level of independence, as demonstrated by the Dongguan TBA meeting with Econ/Poloffs without Foreign Affairs Office approval. The Dongguan TBA was instrumental in creating a school (kindergarten through 12th grade) for 1,500 Taiwan students, which has co-certification by mainland authorities and the Taiwan Department of Education. Close Relations with the Local Government -------------- ¶5. (SBU) Kuo said the Dongguan TBA has "very good relations" and almost daily communication with city officials. Dongguan TBA leaders meet two-or-three times a year with the city's Party Secretary and Mayor. Since there is no official Taiwan political SIPDIS presence on the mainland, the Dongguan TBA provides services normally rendered by a consulate. For example, the Dongguan TBA assists in handling death cases of Taiwan citizens, including internment of the body and communicating with family members. (Kuo said five or six Taiwan people died in Dongguan in 2006). The Dongguan TBA also visits Taiwan citizens who are in Dongguan prisons. The representatives one or two Taiwan businesspeople had been kidnapped in Dongguan last year; they blamed this on the fact "the men were not TBA members." Taiwan Businesses Moving Out and Branching Out -------------- - ¶6. (SBU) The representatives said authorities in Dongguan and other PRD cities have been more stringently enforcing environmental regulations during the past year, and have not renewed business licenses for highly polluting factories. As a result, some Taiwan companies have moved to northern Guangdong or interior provinces, where enforcement is more lax - a fact that might explain why the number of Dongguan TBA member companies has not changed since 2004. In addition, Taiwan businesspeople are branching out into service industries, such as real estate and financing, as China's eases its restrictions on foreign investment. Cross-Strait Politics: Keeping Quiet -------------- GUANGZHOU 00030900 002 OF 002 ¶7. (SBU) In response to a question about Dongguan TBA's dealings with the Chinese government on cross-strait issues, such as tourism and trade, Kuo was noticeably reticent. Kuo said he attended a mid-September Beijing conference between representatives from Taiwan's KMT and China's CCP, but described it as nothing more than a political showcase. (Note: The two-day meeting was co-chaired by Chiang Ping-kun, a KMT Vice Chairman, and Chen Yunlin, the Director of China's Taiwan Affairs Office. The press reported that six TBAs had attended meetings to discuss cross-strait flights.) He added that, because Hong Kong is only one hour from Dongguan by vehicle, local Taiwan people are not very concerned about the lack of cross-strait direct flights. Kuo refused to be drawn into any discussion about the future of Chen Shuibian or cross-strait relations. GOLDBERG