LIANYUNGANG OFFICIALS ELABORATE ON JIANGSU COASTAL

UNCLAS SECTION 01 OF 03 SHANGHAI 000293 SIPDIS STATE ALSO FOR EAP/CM, INR/EAP, EEB/TRA, INR/B STATE PASS USTR FOR CHNA OFFICE - WINTER, WINELAND TRANSPORTATION ALSO FOR DAS JOEL SZABAT TRANSPORTATION ALSO FOR X1, X40 TRANSPORTATION ALSO FOR OFFICE OF INTERNATIONAL AVIATION USDOC FOR ITA DAS KASOFF, MCA/OCEA - SZYMANSKI E.O. 12958: N/A TAGS: ECON EWWT ELTN EAIR EIND PGOV CH SUBJECT: LIANYUNGANG OFFICIALS ELABORATE ON JIANGSU COASTAL DEVELOPMENT PLAN SHANGHAI 00000293 001.2 OF 003 ¶1. (U) Summary. Party and municipal government officials from the Jiangsu Province port city of Lianyungang extolled the city's investment prospects and development plans under the State Council-approved Jiangsu Coastal Region Development Plan at a July 1 seminar in Shanghai. New materials, new energy and new pharmaceuticals are preferred directions of industrial development, while the city's rail and highway links will be expanded, as will the port's harbor and shipyard capacities. End summary. ¶2. (U) Pol/Econ Chief and summer intern and Economic Assistant (notetakers) attended the Promotion Fair for Cooperation on the Coastal Development of Lianyungang, hosted by Lianyungang Party Secretary Wang Jianhua and Mayor Xu Yiping on July 1 at the Shanghai International Conventional Center. Approximately 500 persons attended the morning speeches and ensuing noontime banquet (bai jiu optional; traditional Chinese music performed by a troupe of entertainers from Lianyungang),including Jiangsu Province Vice Governor Zhang Weiguo; diplomats from Russia, Japan, Spain, the Netherlands, South Korea, and Singapore; numerous businesspersons from Jiangsu, Shanghai, elsewhere in the Mainland, Hong Kong, Japan and Taiwan; and a large media contingent which was not offered opportunity to raise questions during the formal 90-minute morning briefing session. (Party Secretary Wang had conducted at least one press interview earlier in the week, however.) Vice Mayor Shi Yan, Municipal Foreign Affairs Office Director General Li Ya, Municipal Party Publicity Director and Party Committee Secretary-General Zhang Guangdong, and multiple city district Party Secretaries were among the large Lianyungang delegation. The Shanghai event was convened three weeks after the State Council in Beijing approved the Jiangsu Coastal Region Development Plan on June 10, which upgraded Lianyungang's economic development status to the national strategic level. Jiangsu Coastal Region Development Plan ;¶3. (U) Under the Jiangsu Coastal Region Development Plan, Jiangsu Province (population 76 million; 2008 GDP $440 billion) is to serve as a major economic growth engine in East China. The development plan has eight major points: -Accelerate the development of Lianyungang, Yancheng and Nantong, building the coastal economy while increasing urbanization. (Note: The populations of these three administrative areas within Jiangsu Province are 4.8 million, 8.1 million and 7.7 million, respectively. All are located to in that portion of Jiangsu Province north of the Yangtze River (Su Bei),that is, in that portion of Jiangsu considerably less well-off than Suzhou, Wuxi, Changzhou, Kunshan, provincial capital Nanjing and the rest of Jiangsu south of the Yangtze River (Su Nan). End note.) -Develop and improve ports, transportation, waterways, power grids, and other local infrastructure. -Modernize the agriculture sector and build an agriculture production base. -Promote the development of advanced manufacturing and service industries; develop production of alternative energy technologies such as wind-power. -Accelerate urbanization in order to narrow the disparity between the northern and southern parts of Jiangsu. SHANGHAI 00000293 002.2 OF 003 -Promote development of ocean resources. -Enforce strict compliance of regulations for the protection of environment. -Continue to build human resources to further develop Jiangsu. Party Secretary Wang: Lianyungang's Seven Advantages ¶4. (U) With Mayor Xu service as master of ceremonies for the July 1 briefing, Lianyungang Party Secretary Wang Jianhua provided the lengthiest and most substantive presentation about the coastal development plan and Lianyungang's role as a locomotive for economic development in Su Bei and for those inland provinces, all the way out to Xinjiang, linked to the Port of Lianyungang by rail. Briefly noting that Lianyungang had achieved its 13 percent GDP growth target in 2009 Q1, Wang said Lianyungang has seven key advantages that make strong economic growth possible: -First, Lianyungang has received solid support from the Central Government, as shown by State Council passage of the Jiangsu Coastal Region Development Plan. This plan has specified Lianyungang to become the leading coastal city in Jiangsu Province. -Second, Lianyungang boasts a precious coastline suitable for a major port. Lianyungang's administrative district (the city itself and several adjoining counties) has a 205-kilometer coast line, including 44 kilometers of deepwater coastline. These precious resources give Lianyungang the capability to build numerous berths capable of handling ships from 50,000 to 300,000 tons. Since 2005, investments in upgrading infrastructure and deepening harbor channels at the Port of Lianyungang has amounted to RMB 15 billion - more than $2 billion. By 2012, the Port of Lianyungang will attain an annual throughput capacity of 120 million tons and 4 million TEU. (Note: Wang's accompanying slide presentation showed plans to develop a second port and heavy industry zone on landfill planned for south of the current Port of Lianyungang. End note.) -Third, Lianyungang was among the first 14 cities opened to foreign investment in 1984 and is one of the three business centers of Jiangsu Province. Since it opened to foreign investment in 1984, Lianyungang has received accumulated foreign investment amounting to $6 billion. Many global enterprises have established operations in Lianyungang, with the Party Secretary citing DuPont and Mitsubishi as examples. -Fourth, Lianyungang has 300 square kilometers of salt land nears its port that can be converted into industrial zones easily, and provides space to develop new energy, new materials and new pharmaceutical industries. Lianyungang has also formed all the necessary ancillary services to develop new energy, materials and pharmaceutical industries, Wang asserted. -Fifth, there are low operating costs for industries in Lianyungang. The average monthly salary for middle management and technical workers is between RMB2000-2500, while the average monthly salary for workers is between RMB800-1000. The average housing purchase price in the urban area is only RMB 3500/square meter. SHANGHAI 00000293 003.2 OF 003 -Sixth, Lianyungang's transportation conveniently connects it to the world. Lianyungang has opened more than 50 container lines that can reach most major ports in the world. It also plans to upgrade the international airport to open more domestic and international lines. The Ministry of Railways has approved the construction of the Qingdao-Shanghai railway, and upon completion it will take only two hours by train to reach Qingdao (a major port to the north in Shandong Province) and Shanghai from Lianyungang. -Seventh, Lianyungang offers beautiful mountains and seashores to attract tourism. In the Yangtze Delta Region, Lianyungang is the closest destination for wide sand ocean beaches, along with boasting four AAAA sightseeing areas, the highest designation conferred by China's National Tourism Administration. Key Future Industries for the New Lianyungang ¶5. (U) Party Secretary Wang's speech offered several details about the planned development of new materials, new energy and new pharmaceuticals industries for Lianyungang's future (see also ref A). For new materials, Lianyungang plans to develop carbon fiber, polysilicon (for solar power),photoelectronic materials and fuel cell materials. In the new energy area, Lianyungang aims to increase production of wind-power equipment, solar heating utilization technology and to develop the solar PV industry and other clean energy equipment industries. (Note: A Hong Kong businessman at the July 1 event told us his company has recently shipped 300,000 tons of steam coal from the United States (principally from the Powder River Basin and from Alaska) to Chinese customers and that power plant operators in Lianyungang have expressed interest in using U.S. coal to mix with domestic coal as a means of reducing overall sulfur emissions. Lianyungang has thermal power plants and an IGCC facility planned there under the auspices of the Chinese Academy of Sciences, but most often touts its Russian-built nuclear power plant for providing reliable, adequate and reasonably priced electricity to businesses there. End note.) In new pharmaceuticals, Lianyungang plans to develop chemosynthesis medicine, modern production of traditional Chinese medicines and marine biomedicine. CAMP