HANGZHOU VICE MAYOR DISCUSSES FINANCIAL TURMOIL, CPC PLENUM,

UNCLAS SECTION 01 OF 02 SHANGHAI 000436 SENSITIVE SIPDIS TREASURY FOR OASIA/INA/CUSHMAN AND WINSHIP DEPT FOR EAP/CM DEPT FOR INR/B E.O. 12958: N/A TAGS: ECON PGOV EFIN ETRD EINV KIPR CH SUBJECT: HANGZHOU VICE MAYOR DISCUSSES FINANCIAL TURMOIL, CPC PLENUM, AND IP PROTECTION REF: SHANGHAI 320 SHANGHAI 00000436 001.2 OF 002 (U) This cable is sensitive but unclassified and for official use only. Not for distribution outside of USG channels or via the internet. Summary -------------- ¶1. (SBU) Tong Guili, Vice Mayor of Hangzhou, told the Consul General on October 9 that the city's exports have decreased in the face of a challenging economic environment, and the municipal government has introduced several export promotion measures to counter the effects of the global financial crisis. Tong said the upcoming Communist Party of China (CPC) plenary session would be an important opportunity to address the urban-rural income gap problem, which she believes Hangzhou has managed better than many other cities. The Vice Mayor also commented on the evaluation of local leaders and intellectual property protection in Hangzhou. End Summary. Paying Close Attention to Global Financial Turmoil -------------- -------------- ¶2. (SBU) Vice Mayor Tong said Hangzhou officials are paying close attention to the impact of the global financial crisis on small exporters (see also reftel). Hangzhou's exports to the United States have decreased this year, she said, and the municipal government has introduced a series of measures to encourage exports, including offering preferential loans to small- and medium-sized enterprises (SMEs) and also reducing the tax burden for SMEs. According to the Vice Mayor, Hangzhou is better positioned than many Chinese cities to tackle economic challenges because of the high proportion of private firms in the city. Hangzhou officials are optimistic that private firms, working together with the municipal government, can overcome the current difficulties, she said. Hangzhou's Views on the Third Plenum -------------- ¶3. (SBU) When asked about the upcoming Third Plenum of the 17th Communist Party of China (CPC) Central Committee, Vice Mayor Tong immediately referred to the importance of addressing the global financial crisis at the Plenum. Only when specifically asked about the Plenum's stated focus on rural reform did she repeat the Central Government's position that it is important for the entire country's economic and social development for the Plenum to focus on rural reform and the urban-rural income gap. For Hangzhou, the urban-rural income gap is not as large because rapid urbanization has benefited rural residents, she said, and the municipal government will continue to promote urbanization and secure the rights of villagers living in the municipality. Evaluation and Training of Local Leaders -------------- ¶4. (SBU) In response to a question about possible outcomes from the Plenum's rural reform focus that would affect her work in Hangzhou, Vice Mayor Tong said her trade and investment portfolio would be unaffected by the Plenum. Tong acknowledged efforts in Southern China and elsewhere to revise the evaluation of local leaders to include non-economic indicators such as environmental protection. For her part, however, as the Vice Mayor with the foreign affairs portfolio, Tong told the Consul General that most of her evaluation focuses on promoting economic development in Hangzhou through trade, investment, and foreign economic cooperation. ¶5. (SBU) Tong said the Zhejiang Provincial government sends 50 local officials to economic training programs in the United States each year, including one-year Master's in Public Administration (MPA) courses in Los Angeles and Houston, an indication of the importance of foreign trade and investment to Zhejiang Province and Hangzhou municipality. Tong praised the four-month economic management training course she attended at UCLA in 2000. Protecting Intellectual Property in Hangzhou -------------- ¶6. (SBU) Although the Consulate has in the past found Zhejiang provincial and Hangzhou municipal government officials unwilling to discuss intellectual property rights (IPR) concerns, Vice SHANGHAI 00000436 002.2 OF 002 Mayor Tong said municipal government officials now better understand the importance of protecting IPR because Hangzhou is trying to develop its hi-tech sector. IPR will therefore be a key part of the city's development strategy, Tong said, adding that the municipality still has a long way to go to meet global standards for IPR protection. There is an IPR complaint center in Hangzhou that cooperates with the Municipal Science and Technology Bureau and Municipal Industrial and Commerce Bureau, she said. Comment -------------- ¶7. (SBU) Vice Mayor Tong reiterated many of the concerns raised by Mayor Cai Qi in Hangzhou two months ago. Like other second-tier cities in East China, Hangzhou clearly remains seriously concerned about the impact of the global financial crisis and the economic slowdown in the United States. Bio Note: Tong Guili -------------- ¶8. (SBU) Tong Guili is a young, impressive city official who is steadily moving upward. She was born in October 1969 in Anshun, Guizhou Province, and is a native of Wuchang, Heilongjiang Province. She was named Vice Mayor of Hangzhou in April 2007 after having served as Deputy Secretary General of Hangzhou's CPC Standing Committee from December 2006 to April 2007. Her portfolio includes trade, investment, foreign economic cooperation, foreign affairs, Overseas Chinese affairs, Taiwan affairs, port affairs, the Hangzhou Economic Development Zone, and High-tech Industrial Zone. She is responsible for the work of Hangzhou's Foreign Trade and Economic Cooperation Bureau and the Municipal Foreign Affairs Office. ¶9. (SBU) Tong visited the Consulate on October 9 to apply for a visa to travel to New York as the head of a municipal government-level delegation to the United Nations, which will host the "Hangzhou Food Festival" October 18-21. Tong said it would be her second trip to the United States -- in 2000 she attended a four-month economic management training at the University of California at Los Angeles (UCLA) sponsored by the Zhejiang Provincial Government. ¶10. (SBU) CPC Party Secretary in Fuyang County, Zhejiang Province from December 2002 to December 2006 (and Fuyang's Deputy Party Secretary from July 2001 to December 2002). From 1990 to 2001, she was Deputy Chief and then Chief of the Qinggong Department of the Communist Youth League (CYL) Hangzhou Committee, Deputy Secretary and then Secretary of the CYL's Hangzhou Committee, and a member of the CPC Hangzhou Standing Committee. CAMP