Identifier
Created
Classification
Origin
08CHENGDU98
2008-05-08 03:31:00
CONFIDENTIAL
Consulate Chengdu
Cable title:  

CHENGDU PETROCHINA PROJECT PROTEST

Tags:  PGOV SENV PHUM ECON CH 
pdf how-to read a cable
VZCZCXRO8071
RR RUEHGH RUEHVC
DE RUEHCN #0098/01 1290331
ZNY CCCCC ZZH
R 080331Z MAY 08
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2839
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3441
C O N F I D E N T I A L SECTION 01 OF 02 CHENGDU 000098 

SIPDIS

DEPT FOR EAP/CM

E.O. 12958: DECL: 5/8/2033
TAGS: PGOV SENV PHUM ECON CH
SUBJECT: CHENGDU PETROCHINA PROJECT PROTEST

REF: 06 CHENGDU 1161

CHENGDU 00000098 001.2 OF 002


CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate
General, Chengdu.
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 02 CHENGDU 000098

SIPDIS

DEPT FOR EAP/CM

E.O. 12958: DECL: 5/8/2033
TAGS: PGOV SENV PHUM ECON CH
SUBJECT: CHENGDU PETROCHINA PROJECT PROTEST

REF: 06 CHENGDU 1161

CHENGDU 00000098 001.2 OF 002


CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate
General, Chengdu.
REASON: 1.4 (b),(d)




1. (C) Summary: Summoned by anonymous text messages, a crowd of
100 or more protestors gathered in Chengdu on May 4 to express
their opposition to the construction of a large chemical plant
north of the city. The project in question is a USD 5.5 billion
joint investment by PetroChina and the Sichuan Provincial
Government. Although the protest occurred next to Sichuan's
largest university, the crowd was composed mainly of middle
class urban residents who perceive a threat to property values
and Chengdu's quality of life. Long a focus of local
controversy, the plant is apparently a "pet project" of Sichuan
Vice Governor Huang Xiaoxiang. A government official in the
locality where the plant is being constructed complained to us
land was requisitioned at a discounted price. According to a
Consulate contact, Chengdu-based human rights activist Chen
Yunfei was involved in the protest and was briefly detained and
questioned by security officials following its conclusion. End
Summary.


2. (SBU) Beginning about 2:00 pm on a pleasantly warm Sunday
afternoon of May 4, a group estimated to contain from 100 to 500
people (depending on the source) gathered on a shady Chengdu
street to protest against the construction of a large ethylene
plant and oil refinery on the outskirts of the city. Although
none of the protestors carried signs or shouted slogans, many
protestors wore surgical facemasks as a gesture of concern over
possible future effects of the plant on air and water quality in
the city. The protestors walked up and down a stretch of road
just outside the east gate of Sichuan University for about two
hours, and although several dozen uniformed officers (and
perhaps undercover officers as well) shadowed the marchers, the
incident ended without official interference around 5:00 pm.

THE PENGZHOU REFINERY
--------------


3. (SBU) The spark for the protest was news that PetroChina had

begun the construction of its USD 5.5 billion ethylene plant and
oil refinery in Longfeng Township, located in the county-level
city of Pengzhou about 25 miles north of Chengdu. By all
accounts the plant is a large project. PetroChina has announced
that upon completion it will produce 800,000 metric tons of
ethylene and 10 million metric tons of refined petroleum
annually, with a projected annual sales volume of 50 billion RMB
(USD 7.1 billion). The plant will occupy 400 hectares (988
acres) of what was previously prime farmland, and is slated for
completion in 2010.


4. (C) According to Sichuan Petrochemical Association Vice
Chairman Zhang Ke, the project is funded by PetroChina (a 75
percent share) and the Sichuan Provincial Government (25
percent). Well-connected Chinese-American contacts in the local
business community have told us that the plant is also a "pet
project" of Sichuan Vice Governor Huang Xiaoxiang. On March 8,
2007 PetroChina and provincial authorities hosted a signing
ceremony in Beijing attended by Sichuan Governor Jiang Jufeng
and Chengdu Party Secretary Li Chuncheng.


5. (C) The plant has long been the focus of local controversy.
Environmental activists have warned that the plant will foul
Chengdu's air and water, and that transportation of its products
on Sichuan's crowded highways will heighten the risk of a spill
of hazardous materials. One such critic is Chengdu Institute of
Mountain Hazards and Environment (an office of the Chinese
Academy of Science) Senior Researcher Chen Guojie (strictly
protect),who has also been a vocal critic of the Three Gorges
Dam project. He told us in 2006 that the Pengzhou plant ranked
as one of the most significant threats to Chengdu's environment
(reftel).


6. (C) An official in the Pengzhou government told us of his own
dissatisfaction with the project, claiming that it posed a far
greater threat to the environment of Pengzhou than it did to
Chengdu. He also alleged that, while Pengzhou had been
compelled to provide the land for the land for the plant at the
supposedly discounted price of 30,000 RMB (USD$4347) per mu
(0.12 acres),almost all of the profit from project would flow
to other governmental units -- the Central Government
(presumably through PetroChina) as well as Sichuan and Chengdu.

THE PROTESTORS
--------------


7. (C) On the morning of May 4, many Chengdu residents began

CHENGDU 00000098 002.2 OF 002


receiving text messages beginning with the words "Petrochemical
Project Alert." Those messages warned, "downtown Chengdu will
be severely polluted" as a result of the construction of the
plant, and urged recipients to gather in the area outside the
Sichuan University gate to "express your anger." According to
local contacts, most of the marchers were Chengdu city
residents, the majority of whom were middle to upper class, with
a smattering of local human rights and environmental activists.
Despite the location of the protest just outside Sichuan's
largest university, there were apparently few if any students
involved in the protest.


8. (C) There are varying accounts of how the text message
campaign started, but local contacts tell us that Chengdu-based
human rights activist Chen Yunfei was involved. Chen was
purportedly responsible for the placement of an advertisement in
a local paper last summer that memorialized the victims of the
1989 Tiananmen massacre. According to one contact, after the
Sunday demonstration Chen was briefly detained by the Ministry
of State Security and then released. Other activists supposedly
involved were Huang Xiaoming, Yang Yusheng, Wen Di, and Fan Xiao
(the last two mentioned in media accounts as well).


9. (SBU) Although authorities did nothing to stop the protest,
the next day (May 5),the Chengdu Commercial News ran a
front-page interview with PetroChina Deputy General Manager and
Chief Engineer Zhang Dongping, in which Zhang defended the
project as "safe and environmentally friendly." The interview
also noted that the project had received approval from the
National Development and Reform Commission.

COMMENT
--------------


10. (C) With its largely middle class participants, the incident
evokes two other recent protests in other cities in China, one
in Shanghai against the extension of the Maglev, and the other
in Xiamen against the construction of a chemical plant. The
Pengzhou project appears to threaten some of the "core values"
that Chengdu residents (especially property owners) hold dear --
especially the city's relative lack of heavy industry and
abundant water supplies. These same "core values" have served
to attract significant amounts of investment in the relatively
"clean" high tech sector to the city (Intel is one prominent
example),and we have been told by some local business contacts
that they see the project as a potential threat to attracting
future private investment. Controversy over the project may run
deep among the area's economic and political elites.
BOUGHNER