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09CHENGDU218 2009-10-07 09:24:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Chengdu
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1. (SBU) Summary: Despite official Sichuan Province statistics
claiming 97 percent of rural home rebuilding following last
year's earthquake has been completed, a trip to the area in
mid-September revealed a significant proportion of rural
residents remain in temporary housing. Banners proclaiming the
province's September 30, 2009 deadline for rural home
reconstruction were a common site, but local residents reported
that the need to be officially registered as a local household
and the high costs of rebuilding remain barriers to progress.
More positively, reconstruction continues apace and we did
observe a significant reduction in the number of temporary
shelter complexes compared with previous trips. Possibly
reflecting greater skepticism than provincial statisticians,
however, Premier Wen Jiabao, during a visit to Sichuan quake
areas in late September, commented that the Province "must still
overcome challenges before it can be judged a complete success."
End Summary.

2. (SBU) Consul General and PolEconOff traveled on September 10
to rural areas in Sichuan hit by the May 2008 earthquake,
including the towns of Hongyan and Zundao, both lying within
about two hours drive north from downtown Chengdu. In Hongyan,
CG participated in the opening ceremony of a livelihood project
implemented by Heifer International's China office in
cooperation with the Pengzhou Bureau of Animal Husbandry.
During the unofficial visit to Zundao, we completed a walking
tour of the town, speaking to local residents about their
experience with the reconstruction process and the challenges
they are facing. (Note: Travel in the quake area, once off of
the few multi-lane highways that reach the main cities, remains
difficult and often unpredictable, with road and bridge
reconstruction projects often blocking routes, necessitating
travel along unpaved and narrow roads between county-level
towns. End Note.)

Progress, but Many Still Waiting for Housing


3. (SBU) Traveling along the increasingly rough and unpaved
roads to Hongyan, we noted a reduced number of temporary housing
complexes in comparison to our visit several months ago (ref A).
However, many of the fields of white-walled, blue-roofed
prefabricated shacks remain, some now topped with new satellite
dishes. Large red banners exhorting disaster area residents to
"enthusiastically" work to meet the province's September 30
deadline for completion of rural home reconstruction were a
common site, hanging across roadways and on construction sites.
(Note: In early May, Sichuan officials announced that all rural
residents must move into permanent housing by the end of
September. End Note.)

4. (SBU) In Hongyan, residents living in temporary structures
built from materials recycled from their destroyed homes,
estimated that they still had months to go before they would be
moving into permanent housing. When asked about the apartment
complex still under construction nearby, into which many of them
expect to move, locals noted that while the outer shell could be
done within weeks, the internal construction will likely not be
completed until early 2010.

No Hukou, No Rebuilding Subsidies


5. (SBU) In Zundao, where the quake destroyed about 90 percent
of the buildings, construction of a number of new private homes
and public buildings -- such as the new middle school and
kindergarten -- had been completed since our last visit in
April. However, the town still appeared to be a large
construction site, with the majority of residences in some state
of reconstruction or repair. Several residents readily
recounted the challenges they still face in the recovery
process. Within minutes after we entered the town on foot, two
older residents had separately approached us to complain that
they were unable to rebuild -- they do not have local household
registrations (hukous), they said, so local officials denied
them the reconstruction subsidies available to their neighbors.

Rebuilt Home Brings Heavy Debt Burden


6. (SBU) A Zundao couple, who recently completed the
construction of a new two-story family home, invited us into
their home and recounted to CG the struggles they underwent in
financing the rebuilding. Between themselves and the wife's
parents, they were able to obtain 32,000 RMB (USD 4,700).
However, they said, rebuilding costs totaled 120,000 RMB (USD

CHENGDU 00000218 002.2 OF 002

17,650) -- a figure consistent with what we have heard from many
other residents in that area. They filled the gap by drawing
down the savings they had amassed over the years -- 20,000 RMB
(USD 2,940) -- along with a small bank loan and a larger loan
from family members. They noted that the loans are a "great
burden" and they do not know how they will repay them, but said
that they had decided that they must nevertheless rebuild their
home, otherwise they would have no life. In their 50s, the
couple said they now earn several hundred RMB a month from a
flower pot business run out of their home. Neither have
pensions coming -- the husband noted that he had been laid off
from his factory job in Mianyang (a nearby city) over a decade
ago, receiving only a one-time payout and losing his retirement
security in the process.

Official Statistics versus Rural Reality


7. (SBU) Comment: Infrastructure and housing reconstruction
progress in the quake-affected areas is evident, having shifted
into high gear early in 2009 (ref A). However, official
provincial statistics announcing that 97 percent of rural
homebuilding has been completed to date do not appear to be
borne out by reality on the ground. More remote areas, further
afield than Hongyan and Zundao and comprising a large portion of
the quake impact area, are reportedly facing even greater
rebuilding challenges. Premier Wen Jiabao paid his eighth visit
to the quake zone in late September, and commented that the
effort "must still overcome challenges before it can be judged a
complete success," -- perhaps also expressing greater skepticism
than provincial statisticians.