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ZNR UUUUU ZZH
R 210935Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 3744
INFO RUEHOO/CHINA POSTS COLLECTIVE
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RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 GUANGZHOU 030511 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM, EAP/RSP/TC 
STATE PASS USTR STRATFORD 
USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON PINR TW CH
SUBJECT: Xiamen Mayor on Progress, Future Expansion 
 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly.  Not for release outside U.S. government channels.  Not 
for internet publication. 
 
¶1. (U) Summary: Xiamen mayor Zhang Changping told the Consul General 
September 10 that the city's continuing development was dependent on 
the expansion of its infrastructure, especially its cargo transport 
system.  In addition, he acknowledged the importance of further 
developing Xiamen's economic relationship with Taiwan and U.S. 
companies; like other cities and provinces, he took note of the work 
that needed to be done to protect the environment and conserve 
energy.  The Mayor closed by welcoming the opening of an American 
consulate in Xiamen.  End Summary 
 
Mayor See Steady Progress Towards Proposed Goals 
--------------------------------------------- ---- 
 
¶2.  (U) During his meeting with the Consul General, Mayor Zhang 
reviewed Xiamen's goals in its 11th 5-year plan.  GDP, he said, had 
already risen by 15.5 percent and revenue had increased by 29 
percent. The city planned to increase per capita GDP from $5,000 to 
$10,000 by 2010.  Like other Chinese cities and provinces, the Mayor 
was sensitive to the central government's desire to protect the 
environment and reduce energy usage. 
 
¶3.  (U) Of prime importance to the city's economic development was 
the expansion of its infrastructure.  According to the Mayor, 
Xiamen's port is the transit point for up to one-half of Fujian 
Province's trade; much of this trade with the United States, with 
exports of $2.2 billion and imports of $0.9 billion.  The Mayor was 
well aware of the debate going on in the U.S. regarding the trade 
deficit and said he would like to find ways to diminish the 
imbalance. 
 
¶4.  (SBU) Mayor Zhang wants the city to be a center for U.S. 
products and a logistical center for air cargo and would like the 
U.S. to approve flights between the city and Chicago.  Like his 
fellow mayors in Quanzhou and Putian, which the CG also visited on 
this trip, he views an agreement with Taiwan on the three-links as a 
major way of fueling the city's - and the province's -  economic 
prospects.  The Mayor also proudly pointed to recent U.S. 
investments in the region and noted the future opening of Kodak's 
digital graphics communication center, scheduled for early 2007, as 
well as the plans by the U.S. firm APC to assure uninterrupted power 
supply services in early 2007. 
 
Xiamen Airlines: Yes for Now to Boeings, but Maybe "No" if U.S. 
Military Sales to Taiwan Continue 
--------------------------------------------- ---------- 
 
¶5.  (U) The Mayor took note of expansion plans for Xiamen Airlines, 
one of the most profitable airlines in China. Currently the air5line 
have 38 aircraft; it would like to expand to 65, with the additional 
planes providing long haul services.  In addition, AIG had purchased 
Boeings to rent to Xiamen Airlines.  AIG, he said, had plans to 
create a regional center and he hoped the company would build a 
leasing center for additional planes.  However, he cautioned, if the 
U.S. government continued selling weapons to Taiwan, China might 
discontinue purchasing planes from Boeing. 
 
Xiamen Pleased With Relationship With Taiwan, Sees Some Room for 
Improvement 
--------------------------------------------- ---------- 
 
¶6.  (U) Expansion of the relationship with Taiwan was clearly on the 
Mayor's mind; much of Xiamen's economic success remains tied to 
investment from and trade with Taiwan.  Xiamen should be further 
ahead in its development, he said, given its prime location between 
the Yellow River Delta and the Pearl River Delta.  However, a key 
limit on its growth was the cargo transport system; only 20 boats 
traveled from Jinmen to Xiamen each day and that number could easily 
be many multiples higher if there were direct transport across the 
Strait.  Mayor Zhang said that he supported President Hu Jintao's 
policy of duty-free imports of Taiwan fruit and he called on Taiwan 
to relax more of its trade policies in advance of the upcoming 
October 18-19 agricultural fair. 
 
Graduates Continue Migration 
---------------------------- 
 
 
GUANGZHOU 00030511  002 OF 002 
 
 
¶7.  (U) In response to the CG's question about labor shortages in 
Xiamen, the Mayor said that he had seen reports that Xiamen was not 
able to provide sufficient employment for its college graduates and 
that many of them were forced to move to other cities. The Mayor 
claimed that there was no problem, as Xiamen had a higher percentage 
of university graduates than any other Chinese city and did not need 
the large number of chemists, accountants and other professionals 
seeking work in the city.  He did acknowledge, perhaps undercutting 
his argument a bit, that Xiamen could not offer salaries as high as 
those in Guangzhou, Beijing, and Shanghai. 
 
Consulates Opening Doors 
------------------------ 
 
¶8.  (U) The Mayor spent a good part of the time praising Xiamen's 
new consular district and said it currently housed consulates from 
the Philippines, Singapore, and Thailand, with South Korea and 
Indonesia expected to open up soon. The Mayor enthusiastically 
welcomed the United States to open a consulate, noting that space 
could be reserved for such an eventuality if the Consul General were 
able to get approval.  The CG pointed out that this was a USG-PRC 
central government issue that would require diplomatic discussions 
in Washington and Beijing. 
 
GOLDBERG