VZCZCXRO8922
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHNH
DE RUEHGZ #0883/01 1860758
ZNR UUUUU ZZH
R 050758Z JUL 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 4227
INFO RUEHC/SECSTATE WASHDC 4228
RUEHOO/CHINA POSTS COLLECTIVE
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 GUANGZHOU 020883 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB, R, EAP/CM, EAP/PD, DRL 
STATE PASS USTR - STRATFORD, CELICO 
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ECON PGOV SENV PHUM ASEC CVIS CH
SUBJECT:  British Discuss South China: Economic/Political 
but Security Concerns as well 
 
 
¶1. (SBU) SUMMARY:   At a recent meeting with British 
Consulate colleagues, the topics for discussion included 
growth in the high-end real estate market, prospects for 
continued economic growth in South China, successful 
strategies for requesting meetings with local officials on 
sensitive topics, and the growing population of foreign 
Muslims.  We also heard how our British counterparts have 
approached the issues of building rule of law and fighting 
corruption as long-term goals best achieved through small- 
scale projects, such as scholarships that expose promising 
young Chinese to life in Britain.  On visa affairs, we 
learned that despite high issuance rates there is still a 
perception that getting a British visa is difficult.  As 
part of ongoing efforts to curb fraud, the British will 
begin fingerprinting applicants next year, are promoting 
legal routes to obtaining a visa, and are cooperating with 
local officials on forgery training.  An ongoing human 
rights dialogue with the Chinese government in Beijing will 
include a visit to Guangzhou this year so that UK 
participants can meet with local groups involved in the 
themes of this year's meeting -- legal representation in the 
courts and workers rights.  END SUMMARY. 
 
¶2. (SBU) The Consul General and Econoffs recently met with 
British Consul General Chris Wood and Deputy Consul General 
David Lusher for a periodic meeting to discuss South China 
political and economic issues.  This was the final meeting 
between Consul General Dong and our British Colleagues, who 
expressed a keen interest in continuing these meetings once 
incoming Consul General Goldberg arrives at Post. 
 
Adding Hunan Province 
--------------------- 
 
¶3. (SBU) CG Wood began by noting that Hunan Province had 
been added to his consular district, and as a result, he had 
recently paid a familiarization visit to that province.  He 
noted that he was surprised by the large amount of South 
Korean investment he saw there.  He explained that Hunan 
Province will be the United Kingdom's third largest market 
after Guangdong and Fujian, and he also noted that the 
British Council sees a huge potential market in Hunan for 
students who want to study in the UK. 
 
Who is Buying all the Apartments? 
--------------------------------- 
 
¶4. (SBU) Several times throughout our meeting CG Wood 
expressed his curiosity about the local real estate market, 
asking rhetorically, who is buying all the luxury apartments 
that are being built in the region?  He commented that given 
China's weak banking system and the lack of either risk 
assessment or credit systems he was very surprised that 
people were able to buy high-end apartments at a rate that 
would justify the growth in this market. 
 
What Will Stop the Growth? 
-------------------------- 
 
¶5. (SBU) The discussion of the real estate market led Wood 
to ask rhetorically what it would take to stop the economic 
growth that South China has been experiencing.  To this end, 
we discussed the local water shortage, noting that while the 
region also lacks power, power can be created, unlike water. 
Econoff commented that further complicating the water 
shortage issue is the fact that in addition to the shortage, 
much of the limited water that is available is heavily 
polluted. 
 
It's All in the Marketing: "Energy Efficiency" is In 
--------------------------------------------- ------- 
 
¶6. (SBU) In discussing the local water and power shortages, 
Wood emphasized that China energy issues and climate change 
are at the top of his government's agenda.  As such, the 
British have recently named a new climate change envoy -- 
who incidentally is considered a "China hand" -- and the 
topic of "climate security" is being addressed by his 
consulate at the local level.  He explained to us that in 
 
GUANGZHOU 00020883  002 OF 003 
 
 
his experience, local officials -- such as interlocutors 
from the Development and Reform Commission -- will not meet 
with officers from his consulate to discuss "climate 
change," but they will meet if the meeting is framed as an 
opportunity to discuss "energy efficiency."  His said that 
despite their interest in this topic, many officials appear 
to be focused solely on energy efficiency at the industrial 
level, to the exclusion of the consumer level. 
 
Changing Society One Person at a Time 
------------------------------------- 
 
¶7. (SBU) The group next discussed the problems of corruption 
and weak rule of law in China.  Consul General Dong 
commented that one advantage China has in the struggle 
against corruption is that in China corruption is seen by 
most people as morally wrong, which is not true in all 
countries.  This basic belief gives the Chinese government 
some leverage for change in the fight against corruption. 
Wood agreed and pointed out that his consulate is 
approaching these issues through small-scale projects.  He 
explained that, for example, they have scholarship programs 
to expose intelligent young people to life in the UK and to 
free debate to help them learn more about these issues.  He 
said that his government sends roughly 200 scholars from 
across China to study in the U.K. each year. 
 
Visa Affairs 
------------ 
 
¶8. (SBU) Our British colleagues shared with us their belief 
that there is a perception in South China that getting a 
visa to the U.K. is difficult, despite an issuance rate of 
roughly 85-90%.  They noted that in regard to student visas, 
they are seeing fewer applications, but the approval rates 
for these applications are going up, which leads them to 
believe that their outreach efforts are indeed educating the 
general public about visa requirements and are encouraging 
qualified applicants to apply.  Lusher mentioned that they 
would begin fingerprinting visa applicants next year. 
 
¶9. (SBU) Lusher also mentioned that he had recently visited 
Fujian Province to discuss visa issues.  Exhibiting his 
typical understated humor, Lusher noted that he went to 
Fujian -- a region infamous for visa fraud -- because it is 
home to "many of the people who come to see us without 
documents."  Lusher explained that he and his colleagues 
wanted to share their expertise with Fujian officials, but 
they encountered a good deal of denial from local officials, 
who maintained that everyone who left had proper documents. 
They claimed that any illegal activities that occur were 
happening overseas.  We have also encountered this type of 
response when dealing with Fujian officials. 
 
¶10. (SBU) To counteract the levels of fraud the British 
Consulate is encountering, Wood mentioned that his staff is 
working to promote the legal route to obtaining a British 
visa as a way to stop applicants from taking illegal routes 
(snakeheads) or from becoming involved with visa brokers. 
Wood commented that his consulate is also cooperating with 
officials on forgery training. 
 
Human Rights Dialogue 
--------------------- 
 
¶11. (SBU) Wood next noted that his government has a human 
rights dialogue with the Chinese government two times each 
year.  He explained that the China portion of the dialogue 
would be occurring the week of 3 July.  It would begin with 
formal meetings in Beijing, followed by the U.K. 
participants visiting Guangdong for two to three days. 
During that time, the group would visit entities such as the 
Federation of Trade Unions, the Public Security Bureau, and 
various research institutes.  The themes of this year's 
dialogue are legal representation in the courts and workers 
rights. 
 
¶12. (SBU) In discussing workers rights, Wood mentioned that 
the UK Ministry of Commerce is more interested in the issue 
 
GUANGZHOU 00020883  003 OF 003 
 
 
of corporate social responsibility (CSR) than it has been in 
the past.  He commented that at the local level his 
consulate is involved in a "good practices" CSR working 
group.  He said he hopes that a local group will eventually 
take the lead in this effort, but thus far no group has 
offered to fill this role. 
 
Growing Foreign Muslim Presence 
------------------------------- 
 
¶13. (SBU) Turning to another topic, Wood also mentioned the 
large number of itinerant Muslim traders in Guangzhou, 
saying that their growing presence "give us pause for 
thought."  He said that based on his understanding, the 
large number of foreign Muslim traders in Guangzhou do not 
associate with either the local Hui Muslims or Xinjiang 
Muslims.  Underscoring his interest in this topic, Lusher 
mentioned on another occasion that the growing Muslim 
presence is of great interest to security officials at the 
British Consulate. 
 
Comment:  Preaching to the Choir 
-------------------------------- 
 
¶14. (SBU) We find these periodic meetings with our British 
counterparts to be quite useful as a means to "compare 
notes" on our respective activities.  It is also a good way 
to share examples of what works when dealing with local 
officials -- who can be quite cagy about agreeing to meeting 
requests -- and more importantly perhaps, what does not 
work.  Because our two consulates share many of the same 
goals in our work in South China, we often do not learn of 
any surprising events or issues.  Nonetheless, it is good to 
get together periodically to know that we are not a lone 
voice advocating for change in areas such as rule of law, 
transparency, and CSR. 
 
MARTIN