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Cablegate: Hangzhou: Going Green, for Fun and Profit

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RR RUEHCN RUEHGH
DE RUEHGH #0736/01 3200946
ZNR UUUUU ZZH
R 160946Z NOV 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6457
INFO RUEHBJ/AMEMBASSY BEIJING 1527
RUEHCN/AMCONSUL CHENGDU 0955
RUEHGZ/AMCONSUL GUANGZHOU 0932
RUEHSH/AMCONSUL SHENYANG 0955
RUEHHK/AMCONSUL HONG KONG 1083
RUEHIN/AIT TAIPEI 0774
RUEAEPA/EPA WASHINGTON DC
RUCPDOC/USDOC WASHDC 0183
RUEHRC/USDA FAS WASHDC
RUEHGH/AMCONSUL SHANGHAI 6955

UNCLAS SECTION 01 OF 03 SHANGHAI 000736

SIPDIS

SENSITIVE
SIPDIS

STATE FOR OES-I ANN COVINGTON
EPA FOR INTERNATIONAL - NGUYEN AND MCCASKILL

E.O. 12958: N/A
TAGS: SENV PGOV EINV ECON CH
SUBJECT: HANGZHOU: GOING GREEN, FOR FUN AND PROFIT


1. (U) SUMMARY: Renowned within China for its natural beauty,
Hangzhou is beginning to attract international attention for its
economic growth and high quality of life. While Hangzhou's
government claims that these successes are due to its commitment
to preserving the environment, there is no question that
Hangzhou will also profit significantly from its "green
revolution." The success of its efforts at self-promotion was
evident during Hangzhou's Ninth Annual Tourism Expo, held at the
famed West Lake from October 27 to November 10. West Lake
Expo's three-fold purpose, namely to: 1) Showcase Hangzhou as a
tourism and investment destination; 2) Promote Hangzhou as a
host city for tradeshows and conventions; and 3) Serve as a
festival site for local residents is clearly starting to "bring
in the green" and reap long-term rewards for Hangzhou. END
SUMMARY.

The 9th Annual West Lake Expo
-----------------------------

2. (U) At the invitation of the Hangzhou Foreign Affairs
Office, Conoff attended the opening of the two week Ninth Annual
West Lake Expo on October 27 and 28. The event was attended by
representatives from several foreign missions, local government
officials, and Chinese celebrities. The Expo kicked off with an
official reception on October 27, followed by an extravagant
Opening Gala Show, with performances by several famous Chinese
pop stars.

BREAKFAST WITH THE BOSS
-----------------------

3. (U) On the morning of October 28, while the rest of the
diplomatic delegation toured local cultural sites, Conoff
attended a one-on-one traditional breakfast with Yeh Min,
Hangzhou Municipal Government's Vice Secretary-General and the
organizer of the West Lake Expo. Over breakfast in Hangzhou's
famous lakeside teahouse, Mr. Yeh explained the purpose and
goals of the annual event.

Increasing tourism, Attracting Investment
-----------------------------------------

4. (U) A Place for Tourism: Founded over 2,000 years ago,
Hangzhou is famous for its natural beauty and historic relics.
It ranks as one of the top tourist destinations in China, not
only for domestic tourism, but also attracting overseas Chinese
tourists, retirees and investors. Despite recent urban
development, Hangzhou has carefully preserved its cultural
heritage. The centerpiece of Hangzhou is West Lake, which has,
for centuries, typified the aesthetic found in traditional
Chinese paintings: glassy waters surrounded by weeping willows,
bordered by green hills topped by pagodas. Hangzhou is also one
of China's most livable cities, with many residents drawn to the
benefits of this "paradise on earth."

5. (U) A Place for Business: Although tourism is a significant
part of the local economy, the Hangzhou Municipal Government is
successful in promoting Hangzhou as a business location. In
addition to traditional textile, tea, and silk industries,
Hangzhou also hosts several large, modern businesses. For
example, Hangzhou houses the headquarters of Wahaha, China's
largest beverage company. Given its idyllic surroundings,
Hangzhou is also known as the design capital of Eastern China
and is home to the famous China Academy of Fine Art and Design.
800 architects and interior designers have set up practices in
Hangzhou, and approximately 2300 furniture factories are located
in the region. The city has also caught the attention of the
financial sector, with Citibank recently opening its first
Hangzhou office. Ms. Cathy Dou, Citibank Hangzhou Branch
Manager, described Hangzhou as a "key economic center that
continues to prosper. There is high demand in Hangzhou for
banking and wealth management services by a sophisticated
population." The Hangzhou municipal government is committed to
creating a "Silicon Valley in Paradise" and has attracted
several high-tech industries in the pharmaceuticals, IT and
environmental engineering sectors. Toshiba's only overseas
production plant for laptop computers is located in Hangzhou.

6. (U) Antiquity and Modernity: The Expo's Opening Gala Show
typified Hangzhou's blend of antiquity and modernity, as

SHANGHAI 00000736 002 OF 003


fireworks exploded alongside a special performance stage
featuring 10 enormous digital screens that floated in the middle
of the West Lake. The performance was broadcast live across
China by the state television channel (CCTV). Mr. Yeh expressed
confidence that this national broadcast would boost Hangzhou's
reputation as a tourism and investment destination. For
pictures of this impressive display, please go to the website:
http://en1.chinabroadcast.cn/3100/2007/10/28/ 1301@288508.htm.

CHINA'S PREFERRED TRADESHOW AND CONVENTION DESTINATION
--------------------------------------------- ----------

7. (U) Global Attention: Hangzhou hopes to become China's top
destination for tradeshows and conventions. Mr. Yeh commented
that while conventions and tradeshows are drawn to Las Vegas by
the lure of casinos and gambling, Hangzhou hopes to attract
these events by the draw of its cultural tourism and scenic
beauty. Mr. Yeh further noted that Hangzhou would like to
establish a sister city relationship with Las Vegas, to learn
from Las Vegas' convention and tradeshow successes. To promote
the city as an international destination, Hangzhou and the World
Leisure Organization hosted the first-ever World Leisure Expo in
2006, a series of exhibitions, special events, conferences,
trade shows, festivals and training programs. According to Mr.
Yeh, in upcoming years Hangzhou is slated to host regional
meetings of the World Economic Forum and APEC. Yeh was
confident that Hangzhou's long-standing tourism infrastructure
readily lends itself to hosting conventions and tradeshows, and
remarked that bookings and reservations for these events are on
the rise.

A Party for the "Little" People
------------------------------

8. (U) One for the Record books: In total, 72 cultural and
commercial events took place throughout the city during the
two-week Expo. All events were free and open to the public. Of
special note was the November 3 event, "Silicon Valley in
Paradise on the Earth, Binjiang Evening - 2007 Hangzhou
International Fireworks Show." According to Mr. Yeh, this event
would break the Guinness Book World Record for firework
displays, which he said, "is only fitting, since it was the
Chinese who invented fireworks." Fireworks were launched from a
massive platform built across a local river. Fireworks displays
included "caption fireworks, computer-controlled stunt
fireworks, flashing fireworks, fireworks in the upper air,
artistic fireworks in the medium and lower air, candle lighting
fireworks on the top of skyscrapers, and fireworks horizontally
shot at the audience to achieve a three-dimensional effect."
Hangzhou received registration notices from over 5,000 tour
groups from across China to attend the fireworks show.

9. (U) In addition to hosting cultural events, local businesses
were encouraged to give out free samples of their wares.
Outside the most expensive teahouse in Hangzhou, Mr. Yeh (whose
16-year-old son is a boarding student at a private school in
Flushing, NY) pointed out a six-foot tall plastic tea pot with a
spigot, dispensing free tea to the "peasants." Yeh said that
the Expo is "as much for the little people as it is for domestic
and international visitors."

10. (U) The Environment, Hangzhou's greatest Asset: According
to Mr. Yeh, each of the 72 cultural and commercial events is
sponsored by local companies, not by the Hangzhou Government.
Yeh emphasized, "The Hangzhou Municipal Government doesn't spend
money on events and activities; it spends money on protecting
Hangzhou's natural beauty." Mr. Yeh recognized that, "It is
this natural beauty which makes living and doing business in
Hangzhou desirable." He reinforced several times that the local
government is doing all that it can to beautify the city, keep
the air clean, and maintain Hangzhou as a "paradise on earth."

11. (U) To reinforce this perception, the Hangzhou Foreign
Affairs Office (FAO) organized a tour for diplomats of the Xixi
Wetland Park, the first national wetland park in the country.
Traditionally, the Xixi Wetland area had been inhabited by
fisherman and farmers. However, seeking to preserve "the
tranquil, wild, light and elegant" environment, the municipal
government evicted all residents and created a natural preserve.
Visitors can cruise the winding inlets, bird-watch, and

SHANGHAI 00000736 003 OF 003


participate in environmental education activities. By 2009, the
China Wetland Museum is expected to open - the first state-level
wetland museum of its kind in China. The municipal government
hopes that tourists and visitors who come to Hangzhou to
appreciate the natural beauty of West Lake will also be drawn to
the Xixi Wetland Park as an eco-tourism destination. To attract
convention organizers and conference attendees, the municipal
government has constructed a meeting hall, conference rooms, and
a small hotel in the park. According to the Hangzhou FAO, the
Xixi Wetland Park symbolizes Hangzhou's commitment to protecting
the environment.

Self-Promotion Pays Off
-----------------------

12. (U) Mr. Yeh confirmed that Hangzhou's star is rising. In
2006, Forbes magazine ranked Hangzhou as the number one city in
China for business for the fourth year in a row. Also, for
three years in a row, the World Bank has recognized Hangzhou as
the best Chinese destination for investment. Numerical data
also supports that Hangzhou is on the rise. In 2006, Hangzhou's
GDP was RMB 345 billion (USD 46 Billion). Its GDP per capita
was RMB 38,247 (USD 4,620), which ranks eighth among China's 659
cities. In addition to its economic potential, Hangzhou is
receiving increased recognition as a "livable" city. In recent
years, Hangzhou won the "International Garden City Award" as
well as the "UN Best Human Habitat Award." Mr. Yeh also
commented that Hangzhou reaps social benefits from its natural
beauty as well. A recent census by the central government found
that Hangzhou has the highest marriage rate in all of China.
Mr. Yeh, explains this is because "young couples strolling along
the lake become caught up in the lake's romantic beauty, and
decide to get married." On October 13, 2007, one hundred
couples from all over China took part in a mass wedding ceremony
on the West Lake. To view the festivities please go to the
website: http://www.china.org.cn/english/China/227975. htm
Mr. Yeh also proudly commented that Hangzhou has one of China's
highest education rates, lowest crime rates, and highest income
rates. All of these factors make Hangzhou a wonderful place to
live, visit and do business.

COMMENT
-------

(SBU) Hangzhou Loves the Green (AS IN money): Mr. Yeh really
pushed the environmental protection line. In the face of recent
press reports about China's un-winnable battle with pollution,
Hangzhou is making a concerted effort to promote itself as
China's "green city." A visit to a high-tech corridor in
Hangzhou was cancelled at the last minute, thus allowing the
diplomatic delegation's focus to fall exclusively on Hangzhou's
environmental protection efforts. The mere fact that the bulk
of the diplomatic tour was spent floating on a boat in the Xixi
Wetlands Preservation Park served to reinforce the message that
Hangzhou wants to send to the international community:
"Hangzhou is green." It bears noting, however, that at no time
during the tour, or during the conversation with Mr. Yeh, did
officials opine that preserving the environment was a worthy
goal in and of itself. It seems that in Hangzhou it is well
understood that being green is good for business. END COMMENT.
JARRETT

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