Identifier
Created
Classification
Origin
09SHANGHAI149
2009-04-02 08:42:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Shanghai
Cable title:  

CHANGZHOU EMBRACES CLOSER U.S. TIES, ENJOYS HONEYMOON WITH

Tags:  ECON EINV ETRD ELAB SCUL SENV CH 
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VZCZCXRO7283
RR RUEHCN RUEHGH
DE RUEHGH #0149/01 0920842
ZNR UUUUU ZZH
R 020842Z APR 09
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7790
INFO RUEHBJ/AMEMBASSY BEIJING 2655
RUEHCN/AMCONSUL CHENGDU 1869
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGZ/AMCONSUL GUANGZHOU 0325
RUEHHK/AMCONSUL HONG KONG 2037
RHEHAAA/NSC WASHINGTON DC
RUEHSH/AMCONSUL SHENYANG 1860
RUEHIN/AIT TAIPEI 1657
RUCPDOC/USDOC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 8429
UNCLAS SECTION 01 OF 03 SHANGHAI 000149 

SENSITIVE
SIPDIS

DEPT FOR EAP/CM, ECA, OES
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH
DOC FOR ITA/MAC - DAS KASOFF, MELCHER, SZYMANSKI, COUCH, LEHRMAN
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN

E.O. 12958: N/A
TAGS: ECON EINV ETRD ELAB SCUL SENV CH
SUBJECT: CHANGZHOU EMBRACES CLOSER U.S. TIES, ENJOYS HONEYMOON WITH
INVESTORS DESPITE DOWNTURN

REF: 07 SHANGHAI 61

(U) Sensitive but unclassified. Not for dissemination outside
USG channels; not for Internet distribution.

Summary
-------

UNCLAS SECTION 01 OF 03 SHANGHAI 000149

SENSITIVE
SIPDIS

DEPT FOR EAP/CM, ECA, OES
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH
DOC FOR ITA/MAC - DAS KASOFF, MELCHER, SZYMANSKI, COUCH, LEHRMAN
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN

E.O. 12958: N/A
TAGS: ECON EINV ETRD ELAB SCUL SENV CH
SUBJECT: CHANGZHOU EMBRACES CLOSER U.S. TIES, ENJOYS HONEYMOON WITH
INVESTORS DESPITE DOWNTURN

REF: 07 SHANGHAI 61

(U) Sensitive but unclassified. Not for dissemination outside
USG channels; not for Internet distribution.

Summary
--------------


1. (SBU) A key Yangtze River Delta (YRD) city located roughly
midway between Shanghai and Nanjing, Changzhou aggressively woos
foreign investors, and city officials often travel to the United
States and Europe to expand commercial ties. Responding to
repeated invitations from energetic city officials, the Consul
General (CG) visited Changzhou, Jiangsu Province on March 31,
taking advantage of the city's on-going efforts to court U.S.
officials and investors (reftel). The CG met with Changzhou's
Party Secretary and Vice Mayor, as well as visited a U.S. joint
venture railway car investment, university campus, waste water
treatment plant, urban planning hall, and the bus rapid transit
(BRT) system. Changzhou aims to beat out local competition by
offering one of the best investment environments in the YRD.
End Summary.

Something Old: Changzhou's Going Out Strategy
--------------


2. (SBU) Changzhou Party Secretary Fan Yanqing thanked the CG
during a March 31 meeting for continuing to promote a strong
relationship between Changzhou and the United States, which
Changzhou has enjoyed for the past several years (reftel). Fan
argued that the global economic crisis and China's economic
downturn provide greater incentive for Changzhou to restructure
its economy while further promoting "opening up" by encouraging
both inward and outward investment. With a total population of
approximately 5 million, including 3.5 million residents and 1.5
million migrant workers, Changzhou now boasts 57,000 private
firms, including 3000 foreign invested enterprises (FIEs) in
sectors ranging from equipment manufacturing to agricultural
processing to textiles. Vice Mayor Han Jiayu told the CG that

he recently returned from an investment promotion trip to
Germany and France, and he will travel to the United States in
May to meet company representatives and government officials in
Chicago, Illinois and Jackson, Mississippi.


3. (SBU) Party Secretary Fan highlighted the CSR Qishuyan
Locomotive Company, a General Electric (GE) joint venture
partner, as a positive example of Changzhou's long-standing
commercial cooperation with U.S. firms. The Changzhou Municipal
Government hopes the on-going partnership with GE will help
upgrade the city's management methods and technology base, Fan
said. During a visit to the CSR Qishuyan factory, General
Manager Wang Hongnian told the CG that more than 200 CSR
Qishuyan employees have participated in training programs at
GE's facility in Erie, Pennsylvania. The company hopes its good
relations with GE will help introduce more efficient
transportation technologies into China, which are likely to be
employed as part of the Central Government's stimulus package,
Wang said. CSR Qishuyan's reputation helps attract graduates
from some of China's best engineering universities, including
those that emphasize transportation infrastructure, such as
Jiaotong University in Beijing and Shanghai Jiaotong University,
he added.

Something New: Education and the Environment
--------------


4. (SBU) Seeking to consolidate Changzhou's scientific knowledge
base and develop homegrown talent, officials from Jiangsu
Polytechnic University and five vocational colleges, in
cooperation with the city government, established the Changzhou
Science and Education Town on the outskirts of the city in 2003.
University officials emphasized that they are proud of the
initiative -- which has attracted the attention of government
leaders, including a visit from President Hu Jintao in 2005 --
and they believe an educational plan that "tailors" graduates to
fit business needs is a successful model. According to Hu Peng,
Vice Director of the Science and Education Town's Administration
Commission, on a shared campus of 78,000 students, 90 to 95

SHANGHAI 00000149 002 OF 003


percent of the schools' graduates find jobs in their fields.
(Comment: We found it strange, however, that Hu expressed
optimism for the employment prospects for this year's graduates
of the Town's Textile and Garments Vocational School given the
economic downturn and reports of many textile factory closures
in the YRD. End Comment.) The Chinese Academy of Sciences also
sponsors a Research and Development Center at the Science and
Education Town, which Hu said is supported by more than 150
companies and 13 other research institutes, including Tsinghua
and Peking Universities. The contributions of the Changzhou
Science and Education Town were perhaps best summarized,
however, by a provincial government official who stated in a
promotional video that the new initiative "has not yet proven"
its value to Changzhou's future development.


5. (SBU) Changzhou's environmental protection efforts also are
in a nascent stage, but city officials recognize the need to
improve air and water quality. When asked what citizens are
most concerned about, the FAO deputy director instantly replied,
"the environment." Changzhou closed 900 small chemical
factories in the last two years because they did not meet
environmental standards, Party Secretary Fan said. Given
Changzhou's proximity to the Yangtze River, water treatment
projects are extremely important, Fan added. The CG later
visited the Shenshui Jiangbian Wastewater Treatment plant where
800,000 cubic meters of water are treated per day and recycled
back into the river. Officials of SZWG, the Shenzhen-based
state-owned enterprise (SOE) that manages the project,
acknowledged, however that Changzhou's water is not yet 100
percent treated and the wastewater treatment facility does not
treat the water to the level of being potable. Construction is
on-going at Shenshui Jiangbian with only one-third of the
planned facility complete.

Something Borrowed: The Ubiquitous Urban Planning Hall
-------------- --------------


6. (SBU) A quick tour through Changzhou's urban planning hall
reflected the big dreams of a city trying to move past its
shortcomings towards a high-tech future. Borrowing the urban
planning hall concept from large metropolises, including
Shanghai and Beijing, as well as similar-sized cities such as
its Yangtze River neighbor to the southwest, Jiujiang, Changzhou
spotlights its rapid development from a city of moderate
historic and cultural significance to one of the YRD's economic
and commercial hubs with its four-floor museum. Changzhou's
urban planning hall is part of a new city complex that includes
the high-rise municipal government headquarters, a theater,
Olympic sports stadium, and municipal museum. With an eye on
attracting investors, Foreign Affairs Office Director Shen Yilin
said the urban planning hall gives house buyers and potential
investors a better idea of where they might want to buy or build.

Something Blue: Bus Rapid Transit Moving Commuters
-------------- --------------


7. (SBU) An additional sign of Changzhou's urban development is
that the primary north-south thoroughfare is dominated by powder
blue bus stations -- noticeable markers of the recently launched
bus rapid transit (BRT) system. Entering its second year, the
BRT has improved traffic flow and contributed to better air
quality, said project consultant (and American citizen) Xu
Kangming. Of the 120,000 riders each day, approximately 11
percent used to be full-time private car drivers, he said.
Changzhou is one of several cities in China -- including Xiamen,
Chongqing, Zhengzhou, and Beijing -- using variations of the
BRT. The city's powder blue bus stops sport Scania buses with a
matching blue color scheme that cost RMB 2 million (USD 300,000)
and adhere to Euro IV emission standards. To date, there have
been no reported instances of private cars driving in the BRT
lanes, which, Xu said, would carry a heavy fine. Meanwhile, new
office building and apartment construction in the city has
gravitated to areas near the BRT's 24 km-long north-south line
and its three spur lines; an additional east-west line will go
into operation on May 1.


8. (SBU) The Changzhou BRT's first year in operation was

SHANGHAI 00000149 003 OF 003


eventful, as a major snowstorm knocked out the city's
transportation network a few days after the BRT's launch in
January 2008. The BRT was the only transportation in-service
during the storm, offering the new public transit option free
publicity in its early days, Xu said. On the downside, in
October 2008, controversy struck the BRT when an internet
blogger alleged that city officials had benefited from kickbacks
related to the system. Mayor Wang Weicheng posted a three-page
letter in an on-line forum a few days later, refuting the
allegations (see septel). Presently, however, BRT officials are
focused on the opening of the east-west line in May, said
Changzhou Transit Group General Manager Cai Jianchen.

Comment: Changzhou Sizing Up the Other Suitors
-------------- -


9. (SBU) A key Yangtze River Delta (YRD) city located roughly
midway between Shanghai and Nanjing, Changzhou aggressively woos
foreign investors, and officials often travel to the United
States and Europe to expand commercial ties. The Consulate
General has frequent contacts with the city's officialdom at
events in Shanghai such as the "Changzhou Meets Shanghai" event
on February 24, 2009. Armed with a professional and extremely
articulate Foreign Affairs Office staff and a series of glossy
promotion materials, Changzhou aims to beat out local
competition by offering one of the best investment environments
in the YRD. City officials recognize that competition with
neighboring cities is fierce, particularly during an economic
slowdown. Our trip to Changzhou indicated that the city's
economy is still strong, and city officials expressed optimism
that the future also looks bright. From a Mercedes pick-up at
the train station to a fancy lunch and dinner, city officials
are adept at giving visitors the positive impression of a
prosperous, progressive, and harmonious city. End Comment.

Bio Note: Changzhou Party Secretary Fan Yanqing
-------------- --


10. (SBU) Party Secretary Fan Yanqing is a strong proponent of
active cooperation with the United States, as well as other
foreign countries, having hosted the "Changzhou Meets Shanghai"
meeting in February 2009 and having met with previous Consul
General Jarrett in August 2008. A native of Wuxi, Changzhou's
close neighbor on the Yangtze River, the 53-year old graduate of
Shanghai Jiaotong University held several positions in Wuxi up
to Vice Mayor and Deputy Party Secretary before moving to
Changzhou as Mayor in 2001. Fan, who has been Changzhou's Party
Secretary since 2003, is energetic and personable, deftly
handling the CG's questions on a range of issues from
environmental protection to the city's e-government initiatives.

Bio Note: Changzhou Vice Mayor Han Jiayu
--------------


11. (SBU) Vice Mayor Han is one of Changzhou's eight vice
mayors, and he is primarily responsible for the overseas
investment and foreign trade portfolio. He travels frequently
to Shanghai and hosted a Spring Festival reception for the
diplomatic corps in January 2009. Han frequently travels abroad
to represent the Changzhou Municipal Government and previously
has met with officials from the U.S.-China Chamber of Commerce,
State of Virginia, and State of Illinois among other U.S.
company and government representatives on his travels. A native
of Jurong, Jiangsu Province, Han, 44-years-old, joined the
Communist Party in 1985 and specialized in water conservation,
serving in several technical capacities first in Jintan County
and later in Changzhou. He was named Vice Director of
Changzhou's Water Resources Bureau in 1996. In 2001, Han was
named Secretary of the CCP Jintan County Committee, and he
became Vice Mayor of Changzhou in 2003.
CAMP