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Cablegate: The Ccp Third Plenum: Hopeful but Not Holding

VZCZCXRO8887
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4102/01 3040854
ZNR UUUUU ZZH
P 300854Z OCT 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 0696
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 2297
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 004102

SENSITIVE
SIPDIS

COMMERCE FOR ALBERT HSU
TREASURY FOR OIA CWINSHIP AND TTYANG
NSC FOR LOI

E.O. 12958: N/A
TAGS: ECON EAGR PGOV EFIN SOCI CH
SUBJECT: THE CCP THIRD PLENUM: HOPEFUL BUT NOT HOLDING
THEIR BREATH IN NINGXIA

REF: A. BEIJING 3933
B. BEIJING 4100

1. (SBU) SUMMARY: Contacts from the Ningxia Hui
Autonomous Region, one of China's poorest regions,
expressed hope the decisions of the October 9-12 Third
Plenum of the Chinese Communist Party (CCP) 17th
Central Committee would translate into concrete
policies to boost agricultural production, sustainable
land use, broader rural financial services and higher
incomes. They did not expect immediate results,
however, and continue to wait for further details
about implementation to emerge. END SUMMARY.

2. (U) Econoff and Econ Specialist visited the Ningxia
Hui Autonomous Region October 15-17 and met with
contacts from Ningxia in Beijing on October 20. The
Third Plenum of the Chinese Communist Party (CCP)
17th Central Committee (aka "The Plenum") concluded on
October 12 with the release of a Communique (ref A),
followed by the more detailed "Decision on Major
Issues Concerning the Advancement of Rural Reform and
Development" (aka "Decision"), which was released to
the public on October 19 (ref B).

3. (SBU) In a meeting with Econoff and Econ Specialist
on October 15, Huang Yongfeng, General Manager of the
Ningxia Land Reclamation Company, said he welcomed the
policy thrust of the Third Plenum Communique because
it lays out how to proceed on rural reforms. Huang
noted that clarifying the system for transferring
land-use rights from individual farmers to a large
company such as his would allow his company to further
expand and increase its production scale. He also was
hopeful that land could be more easily consolidated
into larger scale farming operations. Huang noted
that details still need to be worked out, but the
renewed push to accelerate rural reforms provides
"additional space" to modernize agriculture. (Note:
The Ningxia Land Reclamation Company is a state-owned
agricultural conglomerate with businesses including
grain, vegetable and fruit farms, wineries, livestock
and dairy, and aquaculture. The company cultivates
approximately 188,000 hectares of land. End Note.) A
farmer from central Ningxia who spoke with Econoff
said his family paid close attention to the news
reports on the Plenum Communique and hoped further
reforms would "gradually" result.

4. (SBU) At the Ningxia Agriculture and Animal
Husbandry Bureau on October 15, the text of the Plenum
Communique was streaming on the electronic
announcement board in the lobby. The Bureau's Deputy
Director Zhang Yanping told Econoff his Bureau was
still studying the Communique, but that he was hopeful
the renewed push at the Plenum would help increase the
protection of peasants' interests. He said he was
also hopeful the Plenum will result in increased
fiscal transfers and overall support for agriculture
and rural communities, as well as the use of
specialized rural cooperatives (zhuanye hezuoshe) to
increase the commercialization of agriculture
production.

5. (SBU) A Ningxia Rural Credit Cooperative (RCC) loan
officer said his RCC does not currently allow rural
farmers to use land as collateral for loans but that,
if the necessary legal framework is established
following the Plenum, the RCC would start doing so.
(Note: The Plenum Decision released on October 19 did
not specifically mention the use of agricultural or
rural household land as collateral, even though this
possibility had been discussed in the Chinese media
during the run-up to the Plenum. See septel.)
Representatives from the Ningxia Center for
Environment and Poverty Alleviation (CEPA), a Chinese
NGO with micro-finance and grassland management
projects, said they hope the Plenum will directly
benefit their work. Zhang Jian'e, CEPA's Director for
Micro-finance Projects, said the Plenum may help lay a
legal framework for implementing microfinance projects
that is currently lacking. She explained that
microfinance projects are often carried out with only

BEIJING 00004102 002 OF 002


implicit official approval, making it difficult to
expand programs beyond an area run by a flexible
official. Li Fengyang, CEPA's Director for grassland
management projects hopes further reforms will make it
easier for herders to consolidate land into management
units consistent with sustainable range management
practices.
PICCUTA

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