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Cablegate: Jiangsu Environmental Officials Hold Some Optimism About

VZCZCXRO6173
RR RUEHCN RUEHGH
DE RUEHGH #0797/01 3540216
ZNY EEEEE ZZH
R 200216Z DEC 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6547
INFO RUEHBJ/AMEMBASSY BEIJING 1595
RUEHSH/AMCONSUL SHENYANG 1018
RUEHCN/AMCONSUL CHENGDU 1018
RUEHGZ/AMCONSUL GUANGZHOU 0988
RUEHHK/AMCONSUL HONG KONG 1149
RUCPDOC/USDOC WASHINGTON DC 0016
RUEAEPA/EPA WASHINGTON DC
RUEHIN/AIT TAIPEI 0836
RUEHGH/AMCONSUL SHANGHAI 7069

UNCLAS E F T O SECTION 01 OF 03 SHANGHAI 000797

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SENSITIVE
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STATE ALSO FOR OES/I - COVINGTON
EPA FOR INTERNATIONAL - NGUYEN AND MCASKILL

E.O. 12958: N/A
TAGS: SENV PGOV ECON EIND CH
SUBJECT: JIANGSU ENVIRONMENTAL OFFICIALS HOLD SOME OPTIMISM ABOUT
LAKE TAI CLEAN-UP PROSPECTS

REF: SHANGHAI 760; SHANGHAI 483; SHANGHAI 420

1. (SBU) Summary. Congenoffs met with Jiangsu Provincial
Academy of Environmental Sciences Senior Engineer and Vice
Director Wang Hua and Jiangsu Provincial Environmental
Protection Department Vice Director Zhu Deming on November 28 to
discuss Lake Tai (Tai Hu) pollution clean-up prospects and
prospects for greater use of environmental protection criteria
in performance evaluations for local government units,
government officials and Communist Party cadre. Both expressed
guarded optimism that significant numbers of water-polluting
factories on the shores of Lake Tai will cease lakeside
operations in 2008, although many may relocate to less
economically developed parts of the province and country. The
October 2007 promotion and transfer of Jiangsu Province Party
Secretary Li Yuanchao, who had committed the Province to

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aggressively cleaning up Lake Tai in the near term, to the
Politburo in Beijing as head of the Party's Organization
Department provides the Party with a means to enforce Lake Tai
clean up initatives and other environmental protection
priorities. Jiangsu Province leaders are resolute to clean up
Lake Tai, even if at the cost of a decrease in provincial
economic output, the two environmental officials said. End
summary.

Lake Tai - Big, Important, Seriously Polluted

2. (SBU) Lake Tai, west of Shanghai, is China's third-largest
freshwater lake (2,250 square kilometers) and now one of the
worst polluted lakes in China. Major causes of water pollution
include poorly regulated discharges from industries -- more than
8,500 chemical factories are located in the Lake Tai watershed
-- and untreated wastewater from urban areas, pig farms and
other agricultural activities , with nitrates and phosphorous
playing particularly important roles in the pollution mix. More
than one-fourth of China's textile factories are in Jiangsu
Province, local officials say, with many of them also in the
Lake Tai watershed. The May 2007 massive outbreak of blue-green
algae in Lake Tai resulted in cutting off the drinking water
supply to the 4 million residents of the city of Wuxi. Jiangsu
environmental officials attributed the severity of this year's
outbreak to "70 percent natural factors and 30 percent human
factors," namely, the lowest water level in 50 years, excessive
heat, and excessive pollution from factories, agricultural waste
and human waste.

3. (SBU) Dr. Wang and Director Zhu, both of whom traveled to
the United States in our FY 2007 as recipients of State
Department International Visitor program awards, attributed some
revised environmental protection policies under consideration in
Jiangsu Province to observations of U.S. environmental
protection policies and enforcement. In particular, the
province may move to impose fines on a daily vice occasional
basis for excessive pollution emitters. Even so, they foresee a
need to promote the development of true non-government
organizations to accurately reflect the common people's
aspirations for cleaner air and water and bring added pressure
on government units to enforce China's environmental protection
rules. A number of government-organized non-government
organizations (GONGOs) in China which have spoken out on
environmental issues remain under the control of government
paymasters and thus do not truly represent the common people's
views, they observed.

4 (SBU) The October 2007 Jiangsu Taihu Water Pollution
Treatment Protocol brokered by the Jiangsu Provincial Government
constitutes a crucial step if Lake Tai pollution problems are to
be successfully addressed, they continued. Beyond the important
surge of funding to be made available for pollution control and
cleanup, the agreement assigns distinct environmental protection
responsibilities to multiple government agencies. Provincial
and local water treatment departments had taken a leading role
in attempts to deal with Lake Tai's massive blue-algae bloom
this year (refs). But with multiple agencies previously told
they had environmental protection as an important goal but no
specific assignment of responsibilities, a situation of "three
monks with no water to drink" had occurred, i.e., many agencies
expected other agencies to take the lead in addressing Lake
Tai's problems. Now clearer responsibilities have been assigned
to local agricultural departments, industrial supervision
departments and others, and responsibility for protecting rivers

SHANGHAI 00000797 002 OF 003


in the Lake Tai watershed had also been clearly assigned. Most
effectively, future promotion prospects for officials has been
better linked to performance of environmental protection
responsibilities.

5. (SBU) As part of an important shift from rewarding the
quantity of economic growth to the rewarding the quality of
economic growth, performance of local government units in
Jiangsu Province will henceforth be more closely linked to two
environmental indexes, one for forest preservation and one for
environmental quality. The latter will include component factor
scores for potable water quality, air quality, water quality,
noise pollution abatement, and other factors. Out of a possible
total index score of 100 points, a government unit must score at
least 80 points, or unit leaders will face reassignment to less
desirable positions. Because of the massive blue algae bloom in
the current performance cycle, 20 points have already been lost
by many units for water quality protection. In this performance
evaluation cycle, unit leaders must receive training on
environmental protection topics to avoid potential dismissal for
the blue-algae problems.

6. (SBU) In addition to the visible and noxious blue-algae
problem in Lake Tai, Jiangsu Province also faces prominent water
quality problems along the Yangtze and Huai Rivers, Wang
explained. Textile factories are significant sources of Lake
Tai pollution, and at present only 15-20 percent are estimated
to be able to meet more stringent 2008 provincial effluent
discharge restrictions for the Lake Tai watershed area, which
were only issued in October 2007. For instance, the chemical
oxygen demand standard had been 180 micrograms per liter until
2006, when it was lowered to 100; in 2008, the COD restriction
for dyeing and textile factories in the Lake Tai watershed will
be further reduced to 60 micrograms per liter. The provincial
government wants factories in the Lake Tai watershed to either
rapidly invest in pollution control capabilities, which would
either squeeze very thin profit margins for many or force them
to raise prices in a competitive market, or relocate to other
areas outside the Lake Tai watershed. Wang and Zhu predicted
that some companies will in fact choose to relocate their
factories to areas in the less economically developed northern
part of Jiangsu Province, such as in or near the port city of
Lianyungang, while others will choose to cease operations
altogether.

7. (SBU) Nonetheless, provincial party and government
officials are resolute in their determination to clean up Lake
Tai, even if provincial GDP must slightly drop, Wang and Zhu
continued. Former Provincial Party Secretary Li Yuanchao had
secured broad commitments from the Party and government units to
address this urgent issue, placing this environmental clean-up
goal clearly in the context of "achieving a moderately well-off
society" and "scientific development," two important Party goals
across China. Li's successor will be bound by the commitments
made during his tenure in Jiangsu - and Li's new role as head of
the Party's national Organization Department in Beijing provides
Li with means to enforce this goal via selection and promotion
of personnel based on their performance.

Environmental Issues Prominent in Citizens' Petitions

8. (SBU) Wang and Zhu commented that while the absolute number
of citizen petitions to file complaints or calls for redress in
Jiangsu Province has been decreasing, the share within the total
based on pollution or other environment-related issues is
increasing rapidly, even faster than the province's high annual
GDP growth rate. (Note: According to the Jiangsu Statistical
Bureau, provincial GDP growth was 14.5 percent in 2005, 14.9
percent in 2006, and 15.0 percent through the third quarter of
2007. End note.) Furthermore, they said, National People's
Congress and Chinese People's Political Consultative Conference
delegates are increasingly raising concerns about pollution and
environmental protection in their respective deliberations.

An Environmental Protection Role in the Supply Chain?

9. (SBU) Finally, Wang said that environmental activists
(location and nationality not specified) will soon ask some
large companies that source significant amount of goods from
China, such as WalMart and The Gap, to speak to their suppliers

SHANGHAI 00000797 003 OF 003


about corporate responsibility for environmental stewardship and
purchasing company expectations of their suppliers with regards
to pollution control.
JARRETT

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