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Cablegate: Stones From Other Hills Serve to Polish the Jade: Suzhou's

VZCZCXRO0108
RR RUEHCN RUEHGH
DE RUEHGH #0450/01 2950435
ZNR UUUUU ZZH
R 210435Z OCT 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7262
INFO RUEHBJ/AMEMBASSY BEIJING 2215
RUEHSH/AMCONSUL SHENYANG 1477
RUEHCN/AMCONSUL CHENGDU 1485
RUEHGZ/AMCONSUL GUANGZHOU 1456
RUEHHK/AMCONSUL HONG KONG 1641
RUEHIN/AIT TAIPEI 1279
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7854

UNCLAS SECTION 01 OF 02 SHANGHAI 000450

SIPDIS

USDOC FOR ITA/MAC/OCEA, MELCHER

E.O. 12958: N/A
TAGS: EINV PGOV PREL ETRD ECON SOCI CH
SUBJECT: STONES FROM OTHER HILLS SERVE TO POLISH THE JADE: SUZHOU'S
CONSULTATION MEETING WITH FOREIGN DIPLOMATS AND BUSINESS
REPRESENTATIVES

1. (U) Summary: Suzhou Mayor Yan Li invited Shanghai-based
diplomats, business people and sister city reps to a two-day
event Sept. 26-27 showcasing the city as a model of
investment-friendly and harmonious development. Although billed
as a an opportunity for the city to seek advice from outside
("stones from other hills may serve to polish the jade from this
hill"), the event served as a more lavish version of the sales
pitch tour that ambitious East China cities regularly bring to
Shanghai-based consulates and businesses. Now in its third
year, the Suzhou consultation format appears to have taken its
cue from Shanghai's International Business Leaders Advisory
Committee, which will convene its 20th annual meeting in
November. End summary.

2. (U) Famous in Chinese history for its classical gardens,
Suzhou is today a city of 6.25 million inhabitants and site of
the largest industrial parks in Jiangsu Province. Sister
cities include Venice, which presented a gondola as a gift to
Suzhou, as well as Constance, Germany and Portland, Oregon.
During the core Consultation Meeting attended by over 100
invitees, including the Consul General and Conoff, topics
included sustainable development, education, expanding
international cooperation, development of the service industry,
and the making the local economy to resource efficient and
environmentally friendly. The mayor's keynote speech emphasized
that China requires a concerted strategy of sustainable
development in order to maintain current growth rates. He
identified several threats to growth, including a burgeoning
population, influx of laborers from the countryside, and
environmental deterioration. Quoting a U.S. scholar that
"growth for the sake of growth is the ideology of cancer," the
mayor highlighted the costs of economic growth, including
resource exhaustion and environmental pollution.

3. (U) The mayor presented several policies designed to
confront these challenges, primarily the development of the
service sector as the city's foremost growth engine. Noting
that the service sector compromises 34.6% of Suzhou's GDP, Mayor
Yan hoped to reduce the dominance of the manufacturing sector by
continuing to focus energy toward developing service industries
and moving toward technology and knowledge intensive industries.
This strategy includes the development of modern and efficient
agriculture production methods, the growth of R&D centers, as
well as the stimulation of domestic consumption and tourism.
The mayor noted that population policies must be in line with
economic and social policies, and that a "deepening
urbanization" should be encouraged to improve economies of
scale. He also stated that "overall population growth should be
strictly controlled by strengthening the management of migrants
and the entry of registered residence."

4. (U) Foreign speakers included representatives from Germany,
Italy, AIA, Porsche, several companies based at the Suzhou
Industrial Park, and Amcham China. Additional foreign speakers
took the stage during the scheduled half-hour "brainstorming"
session, continuing with the earlier themes. In his remarks,
Beijing-based Amcham China President Michael Barbalas, a former
resident and now honorary citizen of Suzhou, said that the
economic slowdown in the United States and the corresponding
reduction in international trade will present challenges for
Suzhou's economy. However, a recent Amcham survey showed that
over 89% of US business leaders remain optimistic about the
future of their businesses in China. With Suzhou's
well-developed infrastructure and close proximity to Shanghai,
Barbalas predicted that U.S. companies who are scaling down
their investments and activities in the U.S. will continue
expanding aggressively in China. (FYI: The Shanghai Amcham has
several hundred members based in Suzhou. End FYI.)

5. (U) Attendees were also invited to tour the China-Singapore
Suzhou Industrial Park (SIP), the largest industrial park in
Jiangsu Province. SIP was created in 1994 via an agreement
signed by Chinese Vice Premier Li Lanqing and Singapore Senior
Minister Lee Kuan Yew. As of year-end 2007, SIP was home to
3107 foreign-invested enterprises with accumulated contracted
investments valued at US$31.7 billion. Investments by U.S.
companies accounted for 12.4% or $3.93 billion. SIP creates 15%
of Suzhou's GDP.

6. (U) Comment: Suzhou's lavish and well-organized
consultation meeting presented an attractive vision of
sustainable development and efforts to move toward a resource
efficient economy. Having reportedly learned from an earlier

SHANGHAI 00000450 002 OF 002


year's meeting that brainstorming can get out of hand, the
prudent organizers opted to fill that segment of the schedule
with more set speeches. Suzhou nevertheless managed to hit the
right buttons with a tour of the huge industrial park, speeches
about environmental protection, a tree planting ceremony, and a
mayor and party secretary who personally greeted all the guests
at the evening reception.
CAMP

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