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R 280558Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 4135
INFO RUEHOO/CHINA POSTS COLLECTIVE
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RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 GUANGZHOU 030900 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
 
PACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ECON PREL CH TW
SUBJECT: Taiwan Businesses in Dongguan: Well Organized and 
Politically Neutral 
 
 
(U) This message is sensitive but unclassified.  Please handle 
accordingly. 
 
¶1. (SBU) Summary: Dongguan's Taiwan Business Association (TBA) 
leaders told Econ/Poloffs September 26 that their focus was on 
business and community issues, not politics; like other Taiwan 
businesspeople in China, they prefer to keep their politics to 
themselves, even declining to comment on a recent meeting between 
China and Taiwan on cross-strait flights.  The association, with 
over 3,500 member companies, is China's largest.  Stricter 
enforcement of environmental regulations, however, has already 
forced some Dongguan-based Taiwan businesses to move into China's 
interior.  In the absence of a Taiwan official presence on the 
mainland, the association provides important consular-related 
services locally, including prison visits and death case assistance. 
  End summary. 
 
¶2. (SBU) Econ/Poloffs met on September 26 with Samuel Kuo, President 
of the Dongguan TBA, who is also Chairman of Samson Group, the 
largest China-based exporter of furniture to the United States. 
Samson's two factories (located in Dongguan and Shanghai) employ 
approximately 13,000 people and manufacture OEM under the name 
Lacquer Craft.  Also attending the meeting were Mohammed Amini, 
President of Lacquer Craft, and Hawk Chiu, Kuo's Executive 
Secretary. 
 
SIPDIS 
 
Large and Well Organized 
------------------------ 
 
¶3. (SBU) Dongguan has one of the highest concentrations of Taiwan 
citizens on the mainland, with an estimated 120,000 Taiwan citizens 
and 6,000 Taiwan firms.  According to Kuo, the Dongguan TBA was 
established in 1993 and now has 3,500 member companies, making it 
almost twice as large as the next largest TBA, located near Suzhou 
in Jiangsu Province.  The main office has one full-time Taiwan 
employee, 12 Chinese staff, and one liaison from the Taiwan Affairs 
Office.  In addition, each of Dongguan's 32 districts has a small 
TBA office with one or two local staff. 
 
¶4. (SBU) Kuo said China has a total of 99 TBAs, 50 percent of which 
have less than 100 members.  Chinese officials oversee the 
activities of the smaller TBAs.  However, the TBAs in the Pearl 
River Delta cities of Guangzhou, Dongguan, and Shenzhen, and 
Fujian's Xiamen have a greater level of independence, as 
demonstrated by the Dongguan TBA meeting with Econ/Poloffs without 
Foreign Affairs Office approval.  The Dongguan TBA was instrumental 
in creating a school (kindergarten through 12th grade) for 1,500 
Taiwan students, which has co-certification by mainland authorities 
and the Taiwan Department of Education. 
 
Close Relations with the Local Government 
----------------------------------------- 
 
¶5. (SBU) Kuo said the Dongguan TBA has "very good relations" and 
almost daily communication with city officials.  Dongguan TBA 
leaders meet two-or-three times a year with the city's Party 
Secretary and Mayor.  Since there is no official Taiwan political 
 
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presence on the mainland, the Dongguan TBA provides services 
normally rendered by a consulate.  For example, the Dongguan TBA 
assists in handling death cases of Taiwan citizens, including 
internment of the body and communicating with family members. (Kuo 
said five or six Taiwan people died in Dongguan in 2006).  The 
Dongguan TBA also visits Taiwan citizens who are in Dongguan 
prisons.  The representatives one or two Taiwan businesspeople had 
been kidnapped in Dongguan last year; they blamed this on the fact 
"the men were not TBA members." 
 
Taiwan Businesses Moving Out and Branching Out 
--------------------------------------------- - 
 
¶6. (SBU) The representatives said authorities in Dongguan and other 
PRD cities have been more stringently enforcing environmental 
regulations during the past year, and have not renewed business 
licenses for highly polluting factories.  As a result, some Taiwan 
companies have moved to northern Guangdong or interior provinces, 
where enforcement is more lax - a fact that might explain why the 
number of Dongguan TBA member companies has not changed since 2004. 
In addition, Taiwan businesspeople are branching out into service 
industries, such as real estate and financing, as China's eases its 
restrictions on foreign investment. 
 
Cross-Strait Politics: Keeping Quiet 
------------------------------------ 
 
GUANGZHOU 00030900  002 OF 002 
 
 
 
¶7. (SBU) In response to a question about Dongguan TBA's dealings 
with the Chinese government on cross-strait issues, such as tourism 
and trade, Kuo was noticeably reticent.  Kuo said he attended a 
mid-September Beijing conference between representatives from 
Taiwan's KMT and China's CCP, but described it as nothing more than 
a political showcase. (Note: The two-day meeting was co-chaired by 
Chiang Ping-kun, a KMT Vice Chairman, and Chen Yunlin, the Director 
of China's Taiwan Affairs Office.  The press reported that six TBAs 
had attended meetings to discuss cross-strait flights.)  He added 
that, because Hong Kong is only one hour from Dongguan by vehicle, 
local Taiwan people are not very concerned about the lack of 
cross-strait direct flights.  Kuo refused to be drawn into any 
discussion about the future of Chen Shuibian or cross-strait 
relations. 
 
GOLDBERG