Cablegate: Wuhan to Take the Lead On Central China Rising

VZCZCXRO9304
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #3787/01 3191017
ZNR UUUUU ZZH
P 151017Z NOV 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 2112
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 023787

SIPDIS

SENSITIVE
SIPDIS

USDOC FOR 4420
STATE PASS USTR FOR STRATFORD, WINTER, ALTBACH
STATE PASS CEA FOR BLOCK
TREASURY FOR OASIA/CUSHMAN
USDA/ERS FOR LOHMAR, TUAN, SYLVANA LI
USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ECON EAGR ELAB PGOV SOCI CH
SUBJECT: WUHAN TO TAKE THE LEAD ON CENTRAL CHINA RISING

REF: (A) BEIJING 22299 (B) BEIJING 10969

SUMMARY
-------

1. (SBU) Hubei Provincial Government officials said that
the Central Government is relying on Wuhan to lead the
recently launched Central China Rising initiative. In
order to promote more robust economic development in the
region, the six provinces of Central China will need to
emphasize private sector development, especially in the
services sector. Officials and researchers in Wuhan
described Central China as an artificial concept,
suggesting it will be difficult to coordinate activities in
all six provinces, particularly when each province is more
closely tied to different economic centers on the coast
than to the other provinces within the Central China
grouping. END SUMMARY.

TRAVEL TO HUBEI
---------------

2. (SBU) Econ Macroeconomic Unit Chief, Econoff, Econ
Assistant, and Conoff traveled to Wuhan, Hubei Province,
from October 31 to November 2. Emboffs met with Provincial
Government officials at Hubei's Development and Reform
Commission, Foreign Affairs Office, Bureau of Land
Resources, Statistics Bureau and Academy of Social Sciences.

WUHAN TAKING THE LEAD
---------------------

3. (SBU) A transportation and logistics hub located on the
Yangtze River in Hubei Province, Wuhan is China's fifth-
ranked population center with 7.86 million residents.
According to Gong Bailin at the Hubei Provincial
Development and Reform Commission (HPDRC), Wuhan's role as
an agricultural, energy, and manufacturing base, as well as
transportation hub, makes it the ideal city to take the
lead on Central China's economic development. Qin Zunwen
at the Hubei Academy of Social Sciences (HASS) added that
because of Wuhan's inherent economic advantages, President
Hu Jintao told the city's leaders during a recent visit
that spearheading the Central China Rising initiative is
Wuhan's responsibility.

CHANGES IN ATTITUDE...
----------------------

4. (SBU) Gong suggested that because the Central China
Rising policy is a new initiative, promoting more robust
economic development in the region will require several
adjustments. First, many of the region's leaders need to
recognize why Central China's economic standing has fallen
and Coastal China has boomed as China has reformed and
opened up its economy. There are too many officials in
Wuhan, Gong said, who continue to erroneously believe that
the city's old state-owned industrial base is sufficient
for future growth, adding that Central China must shift to
a market orientation that encourages private sector
dvelopment and welcomes investment by foreign copanies.
We noted that in this respect, Wuhan is off to a good start,
with a lot of investment from Hong Kong, France, and the
United States. Gong further commented that Central China
should promote enterprise development in the services
sector, which traditionally has been underrepresented in
the region.

...CHANGES IN LATITUDE
----------------------

5. (SBU) The Central China Rising strategy faces another
significant challenge in that the concept of Central China
is arguably artificial, and the region's six provinces are
not accustomed to coordinating with each other. Qin Zunwen
at HASS pointed out that Hubei Province is the only one of
Central China's provinces that does not border on a coastal
province and therefore is not tied to another economic
center on the coast. Henan and Shanxi Provinces are tied

BEIJING 00023787 002 OF 002

economically to Beijing-Tianjin and the Bohai Rim, Anhui
Province to Shanghai and the Yangtze River Delta (YRD), and
Jiangxi and Hunan Provinces to Guangzhou and the Pearl
River Delta (PRD).

6. (SBU) In order for the Central China Rising policy to be
successful, therefore, the six provinces will need to
cooperate to attract investment and capital to the region.
As Central China's most economically dynamic city, Wuhan
will need to lead the effort and help the six provinces
establish a new regional identity, Qin stated.

RANDT

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