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Cablegate: Promoting Business, Education Ties with Zhuhai

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RR RUEHCN RUEHGH
DE RUEHGZ #0597/01 2940604
ZNR UUUUU ZZH
R 210604Z OCT 09
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0998
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0293
RUEHBJ/AMEMBASSY BEIJING 0782
RUEHGH/AMCONSUL SHANGHAI 0227
RUEHCN/AMCONSUL CHENGDU 0228
RUEHSH/AMCONSUL SHENYANG 0237
RUEHHK/AMCONSUL HONG KONG 0298
RUEHIN/AIT TAIPEI 0215
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0156
RUEAIIA/CIA WASHDC 0276
RUEKJCS/DIA WASHDC 0272

UNCLAS SECTION 01 OF 02 GUANGZHOU 000597

SENSITIVE
SIPDIS

State for EAP/CM, INR/EAP;
USTR for China Office

E.O. 12958: N/A
TAGS: ETRD PGOV SENV ELAB EINV ECON PGOV CH
SUBJECT: Promoting Business, Education Ties with Zhuhai

REFS: GUANGZHOU 000589

1. (SBU) Summary: During the Consul General's first official visit
to Zhuhai October 8-9, he encouraged stronger academic and cultural
ties between the coastal Guangdong city and the United States and
promoted increased U.S.-China trade and investment. The CG also
addressed students at Hong-Kong style "High Table" dinner at United
International College (UIC), where school officials said China was
moving away from centralized management of education (See REFTEL).
Zhuhai Vice Mayor Chen Honghui and other municipal officials
expressed enthusiasm about expanding economic ties with the United
States and identified an upcoming trade delegation as a potential
opportunity for cooperation. Local business leaders praised the
city government's long-term economic vision and support for
business. End Summary

Looking to Expand Trade and Investment in Both Directions
--------------------------------------------- ----------

2. (U) Zhuhai Bureau of Foreign Trade and Economic Cooperation
(BOFTEC) official Yan Hong agreed with the CG that the United States
and Zhuhai should work together to expand trade and investment. He
expressed excitement about an upcoming trip in November that Zhuhai
Party Secretary Gan Lin is leading to San Francisco and Boston
focused on purchasing medical equipment and other products. The CG
offered the Consulate's support for the trip. Yan also highlighted
clean energy as a development priority in Zhuhai and mentioned the
city's 2010 boat show as another area of potential partnership. The
CG agreed to work with U.S. businesses and other U.S. government
agencies to find ways to cooperate in these areas.

Committed to Promoting U.S. and Zhuhai Ties
-------------------------------------------

3. (U) Zhuhai Vice Mayor Chen Honghui told the CG the United States
was one of the most important foreign partners for Zhuhai and that
he looked forward to more U.S.-Zhuhai cooperation. Chen said that
Zhuhai had the second largest number of colleges and universities in
Guangdong Province, and agreed with CG that there should be more
exchanges between students and faculty from China and the United
States. The CG was happy to offer support for further exchanges, as
well as welcome the upcoming medical products and other future trade
delegations.

Local U.S. Businessman gives perspective
----------------------------------------

4. (SBU) J.J. Verdun (protect), an American businessman based in
Zhuhai, explained that although Zhuhai had not developed as quickly
as other Pearl River Delta (PRD) cities, officials were happy with
the pace because they were focused on long-term goals while avoiding
pollution, over-crowding, etc. Verdun gave major development
projects in Zhuhai mixed prospects. Overall, the Hengqin Island
development project, which aims to develop high-tech, service and
tourism industries in the island that borders Macau, will be
positive for the city, and many Zhuhai citizens are excited about
the project, according to Verdun. However, he was pessimistic about
the Hong Kong-Zhuhai-Macao Bridge. Although it will help Zhuhai
market itself to investors, Verdun believes the tangible economic
benefits will be few. He argued that truck traffic would likely
only pass through Zhuhai without benefitting the local economy.
With no public transportation option associated with the bridge,
there is no incentive to use it rather than the current system of
ferries, he said. Verdun was more optimistic about the benefits of
the less publicized light rail project that will connect Guangzhou
and Zhuhai. Inherently Macau cannot do for Zhuhai what Hong Kong
did for Shenzhen by providing financial services, manufacturing
investments, and technology/production know-how.

Foreign Investor Continues Success Despite Recession
--------------------------------------------- -------

5. (SBU) Vice-President Fu Jun (protect) of Singapore-based
Flextronics told the CG that although the firm was pleased with the
tremendous support and incentives it had received from the local
government, he was frustrated by many inefficiencies in the Chinese
government especially in protection of the environment and workers'
rights. Because of these inefficiencies, his company has decided to

GUANGZHOU 00000597 002 OF 002


be self-disciplined when it comes to dealing with these issues.
Flextronics has built its own water treatment plant and is careful
to make sure all of its employees are fully compensated. When the
CG asked about the effects of the economic slump on the company, Fu
said that although the company was much more stable than 9-10 months
ago, its performance was still below pre-downturn levels.
Flextronics had reached a high of 63,000 employees at the Zhuhai
campus with a million-square meter factory floor, but staff has
fallen 20%, and production is down 30%. Fu also expressed some
concern about the company's high staff turnover rate of 30-40%
annually, lamenting that the talent pool was draining from the PRD.
He pointed out that 90-95% of Flextronics' employees were young
migrant workers and suggested that these workers saw less need to
come to coastal provinces because the quality of life was improving
inland. Flextronics is battling this phenomenon with career
development programs for high-skill jobs and by partnering with
vocational schools and some universities to train and educate
students to become workers at the company.

Helping Migrant Workers Adjust to a New Life
--------------------------------------------

6. (SBU) After the meeting at Flextronics, Fu led the CG to a unique
NGO community center founded specifically for migrant workers. The
Zhuhai Center for Social Work Facilitators works with migrant
workers to help them adjust to their new surroundings and to
overcome displacement issues. It currently assists about 40 workers
per day, advertising its services primarily by word of mouth. The
center is the product of a unique cooperation between the
government, private enterprise (Flextronics) and an NGO.
Flextronics and the Zhuhai Civil Affairs Bureau fund the center.
Asked what the biggest problem migrant workers faced, the NGO
director responded that depression and loneliness were the biggest
problems. The workers were making good money, but they were far
away from their families and needed community support through
activities and conversation.

GOLDBECK

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