Cablegate: Sw China: Chengdu Mayor Ge Meets Consulates

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R 260912Z JAN 10
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 3705
INFO RUEHOO/CHINA POSTS COLLECTIVE
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RUEHCN/AMCONSUL CHENGDU 4428

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TAGS: ECON EINV ELTN EAIR PGOV PINR SENV BEXP CH
SUBJECT: SW CHINA: CHENGDU MAYOR GE MEETS CONSULATES

REF: A) 08 CHENGDU 251; B) 09 CHENGDU 232; C) 09 CHENGDU 310; D) 09 CHENGDU 81

CHENGDU 00000018 001.2 OF 002

1. (SBU) Summary: Chengdu will build on its strengths in high
tech areas such as IT, software services, and the aircraft
industry, Mayor Ge Honglin said January 22. Chengdu will lead
in cutting carbon emissions: it closed all coalmines in the
larger Chengdu municipal region, and is now replacing smaller
cement plans with larger ones using French technology.
Chengdu's first subway line will being trial runs in October
2010; another three lines are under construction or in the
advanced planning stage. Two-thirds of the townships in Chengdu
have their own sewage treatment; the remainder will have it by
the end of 2010. Only 300,000 of Chengdu's 11 million people
are poor; the city government provides them with free medical
care and a minimum income higher than most other Chinese cities.
End Summary.

Chengdu Mayor Ge Honglin's Q&A with SW China Consulates

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2. (SBU) Chengdu Mayor Ge Honglin (refs A and B) met diplomats
in southwest China January 22 for an hour-long session. Ge, who
has impressed us with his command of detail, pragmatism, and
good humor, opening the session with: "I gave you a hand out on
Chengdu, so no need to repeat what's there. Let's do a question
and answer session." (This meeting, and a January 21 meeting
with Sichuan Party Secretary Liu Qibao, were organized at the
request of Consul General Brown, acting on behalf of all Consul
Generals and Consuls in Chengdu and Chongqing.)

3. (SBU) Mayor Ge responded to questions by explaining that
2010 was the last year of China's 11th five-year plan, and that
Chengdu was thus reviewing its longer-term economic plans.
Chengdu will build on its strengths in high-tech fields,
focusing particularly on IT, software services, and the aircraft
industry, the mayor said. On February 27, non-stop air service
will begin from Chengdu to Bangalore, the center of India's
software industry. Chengdu Airlines made its first flight on
January 23, Ge noted. The airline is a re-launch of the defunct
United Eagle, and is a joint venture of a trio of state-owned
enterprises: COMAC, Sichuan Airlines, and the Chengdu
Transportation Investment Group.

Large Infrastructure Projects; Opportunities for Foreign Firms

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4. (SBU) Large infrastructure construction through 2020 (refs C
and D), will include a second airport for Chengdu, and light
rail links from Chengdu's downtown to all the secondary cities
in the six counties under the Chengdu city government. The
Chengdu-Dujiangyan high-speed rail line will open on May 12,
2010. Trial operation of the Chengdu subway system's line 1
(north to south) will begin in October. Construction of line 2
(east to west) is already well underway. Construction of line 4
starts during 2010. Planning of line 3 is well advanced. Ge
mentioned that these projects have created opportunities for
foreign investors, mentioning a U.S. company's joint venture
with a Chinese firm in the Chengdu suburb of Longquanyi, where
the company makes boring equipment for tunnels and heavy
equipment for highway construction. (Note: With involvement of
the FCS advocacy program, Motorola won a contract for subway
line 1, and hopes to win the contract for line 2. End Note.)

5. (SBU) U.S., French, and German, companies are doing well in
Chengdu, Ge said. The Singapore CG responded with a
question-comment indicating her concerns about the investment
climate in Chengdu. She said that Singapore is the third
largest investor in Chengdu after Hong Kong and the Virgin
Islands.

Chengdu - Chongqing Compete to Become Carbon Demonstration City
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CHENGDU 00000018 002.2 OF 002

6. (SBU) "Chengdu has won an award for being a leading Chinese
low-carbon emissions city! Look at today's newspaper," Mayor Ge
exclaimed. Indeed, on January 22, the Sichuan cities of Chengdu
and Guanyuan won the title of contributor to the lowering of
carbon emissions at the first annual meeting of the "Low Carbon
China Forum" [Ditan Zhongguo Luntan] meeting in Beijing. Mayor
Ge mentioned two ways Chengdu how won the low carbon city title:
closing coalmines and small cement plants. The cement plants
were replaced with big cement plants that use the low pollution
technology of France's La Farge, the world's largest cement
company. Chengdu set aside 400 million RMB (USD 70 million
dollars) to help laid off workers from the small cement plants
to find new jobs, Ge explained.

7. (U) Chengdu and Chongqing are competing for the
national-level designation as a "low carbon economy
demonstration city," following on Premier Wen Jiabao's November
2009 statement at the "S&T Driven Sustainable Economy
Conference" that China would make creating a low carbon economy
a high priority, according to a January 25 Lianhe Zaobao
(Singapore) report. Chengdu will stress development of low
carbon emission energy sources and industries such as solar,
nuclear and wind power, and LED lighting. Chongqing
Municipality pledged to reduce its carbon intensity to 40
percent below the 2005 level by 2020. See URL
tinyurl.com/chengdu-low-carbon.)

The Environment and Poverty Alleviation

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8. (SBU) Mayor Ge responded to two questions from the Pakistani
CG on environmental quality, and poverty alleviation, noting
that:

-- Chengdu is working to reduce the stink of stagnant waters,
including in the area near the U.S. Consulate in Chengdu. He
said the rivers in Chengdu area are wide and shallow and are
often slow moving. Sometimes water flow is cut off at
Dujiangyan in the wintertime for renovations there. The Mayor
said that two-thirds of the towns of the nine districts, six
counties and four cities in which the 11 million people of
Chengdu live already have water treatment plants; the remaining
one third will have them by the end of 2010.

-- About 300,000 of Chengdu's 11 million people live are poor.
Chengdu has one of the highest guaranteed minimum incomes in
China and provides housing and health care to the poor. The
beggars on Chengdu's streets all come from out of town, he
asserted. Ge said his top priority as mayor has been to reduce
the urban-rural income gap in Chengdu. The stress on spending
extra resources to rural development is what makes Chengdu's
path to development distinctive, he felt.

No Response to Question on Overheated Chengdu Housing Market

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9. (SBU) ConGenOff asked Mayor Ge whether the Chinese
government's 4 trillion RMB fiscal stimulus package may cause
the Chengdu housing market to overheat. The Mayor gave an
unresponsive answer, noting that Chengdu is not pushing prices
up and is implementing the central government's policy. Note:
Chengdu housing prices declined beginning in late 2007, but have
risen rapidly in recent months.
BROWN

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