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Cablegate: East China Dispatches, May 14, 2007

VZCZCXRO3908
RR RUEHCN RUEHGH
DE RUEHGH #0283/01 1340737
ZNR UUUUU ZZH
R 140737Z MAY 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5800
INFO RUEHBJ/AMEMBASSY BEIJING 1062
RUEHCN/AMCONSUL CHENGDU 0625
RUEHGZ/AMCONSUL GUANGZHOU 0607
RUEHSH/AMCONSUL SHENYANG 0629
RUEHIN/AIT TAIPEI 0503
RHEHAAA/NSC WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6198

UNCLAS SECTION 01 OF 04 SHANGHAI 000283

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/CM, INR, R, EAP/PD, EAP/P, AND, IIP/G/EAP
DEPARTMENT FOR INR/EAP - CLARKE
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE
TREAS FOR AMB HOLMER, WRIGHT, TSMITH
TREAS FOR OASIA - DOHNER/HAARSAGER/CUSHMAN
DOC FOR ITA/MAC - DAS KASOFF, MELCHER, MCQUEEN
DOC FOR ITA - LEHRMAN
USDOC ALSO FOR OGC - SULLIVAN, BLANK
LOC/COPYRIGHT OFFICE - STEPP
USPTO FOR INT'L AFFAIRS - LBOLAND
NSC FOR WILDER AND TONG

E.O. 12958: N/A
TAGS: PGOV PREL ECON EINV SOCI OEXC OIIP KPAO CH
SUBJECT: EAST CHINA DISPATCHES, MAY 14, 2007


(U) Sensitive but Unclassified - please protect accordingly.
Not for dissemination outside USG channels.

1. (SBU) Summary: In this Dispatch, we learn that Shanghai
loves luxury cars, anti-Japanese sentiment still simmers,
Internet rumors spread quickly in Shanghai, even migrants dream
of making it big on the stock market, information on IPR
continues to be welcomed, and some Shanghai youth are passionate
about punk music. This is the first in a series of periodic
short-subject cables designed to offer more anecdotal
reflections on life in East China.

Cars, Cars, Cars
----------------

2. (U) For the week of April 22-28, Shanghai was taken over by
the 12th Annual Shanghai Auto Show. According to CCTV (Chinese
national television), the show had record attendance of around
500,000 visitors from over 100 countries and regions. Most
attendees appeared to be local Chinese, including many couples
and families. All the major and not so-major automakers
participated in the exhibition including GM, Toyota, BMW, and
Iran's Khodra. Chinese brands Chery, Roewe and Great Wall also
had prominent exhibitions.

3. (U) Generally, all car companies, even brands that might be
considered more budget-oriented in the United States, portrayed
their cars as passports to a luxury lifestyle. Information desk
attendants at one exhibition wore equestrian clothing, while the
Caucasian models in cocktail dresses and smoking jackets draped
themselves on the cars. Most displays did not make serious
mention of fuel economy or safety measures. While there were
hybrid gas/electric cars on display, sales people noted that
these cars were not for sale in China. Most attendees flocked
around the cutting edge concept cars and luxury brands. There
was wide coverage of the auto show in both western and Chinese
media, with many articles emphasizing the emergence of Chinese
brands. However, based on our trip to the show, foreign brands
still drew the biggest crowds.

"I Wouldn't Have Fixed Your Tire if You Were Japanese"
--------------------------------------------- ---------

4. (U) While overt acts of hostility towards Japanese in East
China remained rare over the past year, passive aggression,
according to some Japanese contacts still simmered. During a
recent intellectual property rights (IPR) conference hosted by a
security agency for Japanese companies, many Japanese companies
complained of police, courts, and administrative intellectual
property bureaus, especially in rural areas, refusing to take
action to protect their IPR because they were "Japanese
companies." The Japanese business representatives noted several
instances of the same authorities taking action to protect
intellectual property from U.S., European, and other Korean
companies while neglecting that of Japanese firms. Japanese
companies noted similar occasional frustrations with obtaining
other government services and finding Chinese business partners.

5. (U) A recent encounter between a Consulate Econoff and a
bicycle repairman highlighted this latent passive aggression
towards Japanese. One evening as the Econoff road his bicycle
home from work, he had a flat tire. Within a short time, a
repairman passing by on his scooter stopped to help fix the
tire. After inquiring what country the Econoff came from, the
repairman quickly replied, "I am glad you are American. I
wouldn't have fixed your tire if you were Japanese." The
repairman went on to explain that his family hailed from Nanjing
and had survived the Nanjing massacre. He also explained that
he, like many of his acquaintances, might not want to directly
harm Japanese but definitely had no interest in helping or
befriending them.


SHANGHAI 00000283 002 OF 004


Facts Don't Impede Traffic on Shanghai's Information Superhighway
--------------------------------------------- --------

6. (SBU) One of the many challenges facing the Consulate is
navigating China's increasingly hi-tech, Internet-driven media
environment. With its potent combination of the highest number
of Internet users of any city in China (28.7 percent of citizens
are Internet users as compared to 10.5 percent nationwide,
according to a recent report from the government-owned China
Internet Network Information Center), and increasing competition
among media organizations for advertising revenue and customers,
Shanghai media easily fall victim to inaccurate reporting and
rumors swept along by the lightning speed of the Internet. The
most poignant recent example of this phenomenon was how the
Shanghai press picked up and spread rumors surrounding the
identity of the Virginia Tech gunman.

7. (SBU) Following the tragic events in Virginia on April 16,
rumors about the identity of the gunman took on a life of their
own in Shanghai. After the initial erroneous reports in various
U.S. media (Chicago Sun Times followed by Fox News) that the
assailant was a Chinese male who had been issued a student visa
in Shanghai, Consulate phones started to ring. Local media
outlets and citizens were quickly convinced that this
information was accurate, perhaps fueled by a commonly held
belief that the USG controls American media organizations much
the way the Chinese government does, so anything reported must
be authoritative. By the end of April 17 in Shanghai, the
speculation had taken a turn for the sinister - because the
gunman was presumed to have been from Shanghai, local citizens
and journalists were convinced that this would lead to a total
breakdown in U.S.-China relations and the USG would stop issuing
visas, particularly to Chinese males. Consulate sought to
counter these rumors by issuing a statement late on April 17
that "The U.S. continues to welcome legitimate student
travelers. The American Embassy and Consulates in China
continue to issue visas in accordance with U.S. law. There have
been no changes to our visa procedures." While in the end, no
local media chose to carry this statement, it helped put the
visa rumors to rest.

8. (SBU) Comment. China's media environment remains tightly
controlled and largely closed. Average citizens are not
accustomed to distinguishing between government information and
press reports and are far less likely to question the veracity
and motivation of a media report than their American
counterparts might be. This recent rumor incident underlines
the growing power of the Internet to spread news to ever wider
audiences in China, but also its weakness as a tool to discern
fact from rumor. End comment.

Newly Arrived Migrant Worker Buys Stocks
----------------------------------------

9. (U) While admitting that she did not understand how the
stock markets work, a newly arrived in Shanghai migrant worker
told Econoff that she had invested RMB 250 (USD 32) in
Shanghai's stock market. The Shanghai Stock Exchange, which has
risen 50 percent to new highs since the start of the year
continues to attract new investors. The market grew 130 percent
in 2006. The migrant, who was working as a hairdressing
assistant, said that she had purchased shares priced at RMB 2
(USD 0.25), in a company that she believed to be involved with
hydro-electric power generation. She was persuaded to buy on
the recommendation of her coworkers who routinely boasted about
their own stock market gains. The migrant worker, originally
from Pu-Er, Yunnan Province, arrived in Shanghai just over a
month ago. She came to Shanghai by herself with no contacts
here in the city. It took her five days to get here via bus and
train and she found a job on her second day. Her monthly salary
was about RMB 900 (USD 120). She hoped to make enough money
here in Shanghai over the next two years to be able to return

SHANGHAI 00000283 003 OF 004


home and start a family.

Spotlight on Pirated Patents, Counterfeit Copyrights and Tainted
Trademarks
--------------------------------------------- -----------

10. (U) As part of Post's ongoing outreach on IPR, Consulate
invited Professor Michael Ryan, Director of the Creative and
Innovative Economy Center at George Washington University Law
School, to visit East China as a U.S. Speaker. Dr. Ryan has
lectured and conducted research on intellectual property,
technology, and trade issues in over 20 countries, and is an
expert on IP issues related to the entertainment,
pharmaceutical, and biotech industries in developing countries.
April 13 and 16, Dr. Ryan gave presentations at the Jiangsu
Province Economy Regulation Office, Nanjing University of
Science & Technology, the Shanghai Intellectual Property Rights
(IPR) Bureau, and East China University of Politics and Law's
IPR School.

11. (U) At the first three venues, Dr. Ryan spoke to more than
150 local government officials and students on "The Role of
Intellectual Property in the Innovation Cycle" and at the latter
venue, about 100 students heard him address "Innovation,
Copyrights, and Patents in the Software Sector." During the Q&A
sessions, most of the questions he fielded related to the
copyright and market access cases initiated by the USG against
China on April 9 at the WTO, but the audiences also showed great
interest in the U.S. phenomenon of academia-industry clusters
and their connection to economic growth in urban areas around
the U.S. IPR officials and students appreciated Dr. Ryan's
comments because he provided a more informed and balanced view
of the rationale for China enforcing its IPR laws.

Shanghai Rocks Out To Sonic Youth
---------------------------------

12. (U) In the past year Shanghai has hosted an increasing
number of concerts by foreign performers, including the Rolling
Stones, James Brown and the Black Eyed Peas. The audiences at
all of the concerts have been remarkably consistent, mostly
foreigners (of all ages) with few Chinese. As a result, most
foreigners expected a similar audience at an April 24 show by
New York-based punk band Sonic Youth. Unbeknownst to most
(Econoff included) Sonic Youth has a large, devoted following in
China.

13. (U) The concert was held at the Shanghai Concert Hall, a
historic building in the center of People's Park that primarily
hosts classical music concerts. Before the show started the
mostly twenty-something clean-cut Chinese audience was seated
politely, many still in work attire, most with backpacks, a far
cry from the typical Sonic Youth crowd in the United States.
There was no alcohol or soda sold, only water. As soon as the
lights dimmed, however, pandemonium erupted.

14. (U) The Chinese security seemed unsure how to react; for
the first hour every time they tried to control the audience,
the band would castigate them. Five minutes into the show the
audience rushed the stage but the security stopped the surging
crowd and aggressively pushed the audience back to their seats
at which point the band stopped singing and asked the security
to let the crowd approach the stage. Security held firm until a
particularly popular song whipped the crowd into such a frenzy
that it overwhelmed the security guards and the audience took
over the stage pit. As the concert went on, security eased up
more and more so that by the end they were allowing stage diving.

15. (U) According to Lilo Wang, a 24-year old accountant, who
spent most of the show in the heart of the mosh pit, Sonic Youth
had been popular in China for a long time and within the rock
crowd was extremely popular. She said that Shanghai's rock

SHANGHAI 00000283 004 OF 004


scene was weak because all everyone cared about was making money
and they were not passionate about life. She said the cost of
the tickets (RMB 480 or USD 62) was worth it and that she hoped
more bands like Sonic Youth would come to China and that rock,
especially punk, would grow in popularity in Shanghai.

16. (U) Regards from Shanghai.
JARRETT

© Scoop Media

 
 
 
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