VZCZCXRO2080
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4171/01 3340439
ZNR UUUUU ZZH
P 300439Z NOV 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 2549
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 024171 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR 4420 
STATE PASS CEA FOR BLOCK 
TREASURY FOR OASIA/CUSHMAN 
USDA/ERS FOR LOHMAR, TUAN, SYLVANA LI 
USDOL FOR ILAB 
E.O. 12958:  N/A 
TAGS: ECON EAGR ELAB PGOV SOCI CH
SUBJECT: HENAN PROVINCE'S NINE-CITY URBANIZATION PLAN 
 
REF:  BEIJING 2661 
 
SUMMARY 
------- 
 
¶1. (SBU) Provincial and municipal level officials in 
Central China's Henan Province look to rapid urbanization 
to accelerate economic growth and absorb excess rural labor. 
Henan's urbanization plan focuses on nine cities that 
account for 40 percent of the province's population and 60 
percent of its economic output.  Policymakers in Zhengzhou, 
the provincial capital, have designated specific roles for 
each of the cities, and they hope the policy will attract 
more farmers to urban areas.  Local officials in Kaifeng 
are optimistic about economic development, but display 
concern about the long-term impact of rapid urbanization on 
rural stability.  (Note: Zhengzhou is an APP city.  End 
Note.)  END SUMMARY. 
 
TRAVEL TO HENAN 
--------------- 
 
¶2. (SBU) Econoff, Conoff, and Econ Assistant traveled to 
Henan Province, November 6-8.  In Zhengzhou, Emboffs met 
with Provincial officials at the Development and Reform 
Commission and Foreign Affairs Office.  They also visited 
Henan People's Radio, and discussed the government's rural 
policy with faculty at the Henan Agricultural University. 
On November 7, Emboffs traveled to Kaifeng where they met 
with officials at the Municipal Development and Reform 
Commission and Municipal Agriculture and Forestry Bureau. 
 
HENAN'S RAPID URBANIZATION 
-------------------------- 
 
¶3. (SBU) Henan Provincial Government officials continue to 
emphasize that the best hope for the province's 70 million 
rural residents is to find work for them in the cities 
(reftel).  With excess rural labor already heading to urban 
areas in search of employment, accelerating industrial 
development is a key objective for the government, said 
Shao Yingnan, Deputy Director of the Foreign Economy 
Department at the Henan Provincial Development and Reform 
Commission.  Shao estimated that as much as 30 percent of 
rural income is derived from part-time work in the cities. 
Henan Province wants to attract investment from more 
private sector companies, including foreign investors, Shao 
said.  Rapid urbanization and industrialization resulted in 
13.9 percent GDP growth during the first nine months of 
2006 compared to the same period the previous year.  (Note: 
Henan's projected GDP growth rate in 2006 is consistent 
with its 14.1 percent growth rate in 2005.  End Note.) 
 
POLICY FOCUS ON NINE CITIES 
--------------------------- 
 
¶4. (SBU) Henan Province's apparent urgency to attract 
private sector investment reflects officials' recognition 
that the land-locked province remains backward compared to 
its coastal neighbors.  The China Daily reported in March 
2006 that Henan Province's urbanization rate, at 30.7 
percent, is significantly lower than the national average 
of 43 percent.  Henan Province's urbanization plan focuses 
on nine cities that currently account for 40 percent of the 
province's population and 60 percent of its economic output. 
The nine cities, Zhengzhou, Kaifeng, Luoyang, Jiyuan, 
Xinxiang, Jiaozuo, Xuchang, Pingdingshan, and Luohe, each 
have specific designated roles.  Provincial government 
officials stated, for example, that Zhengzhou and Luoyang 
will remain the province's industrial bases and financial 
centers, with other cities serving specific roles such as 
Kaifeng as a tourism hub, Jiaozuo as a coal producer, and 
Luohe as a livestock center.  Zhengzhou, the provincial 
capital, also serves as Central China's major 
transportation and logistics hub. 
 
KAIFENG: OPTIMISTIC ABOUT PROSPECTS... 
-------------------------------------- 
 
¶5. (SBU) In Kaifeng, a city of 4.87 million residents east 
of Zhengzhou, municipal government officials expressed 
 
BEIJING 00024171  002 OF 002 
 
 
optimism about the Nine Cities plan and Kaifeng's role. 
Kaifeng, one of the "Seven Ancient Capitals of China," 
attracted 18 million tourists in 2005, and the city also 
emphasized development in its transportation and banking 
sectors during the year, said An Honghai, Director of the 
Kaifeng Development and Reform Commission.  Rural residents 
in Kaifeng still account for approximately 80 percent of 
the municipality's population, but officials at the Kaifeng 
Agriculture and Forestry Bureau said that as in other parts 
of Henan, non-farm income is increasingly important in 
rural areas.  Taken together with agricultural sector 
modernization, wage income from part-time work in the city 
or non-farm work in the countryside contributed to a 14 
percent increase in Kaifeng's rural incomes in 2005, higher 
than the provincial average of 7.5 percent during the year. 
 
...BUT WORRIED ABOUT REALITIES 
------------------------------ 
 
¶6. (SBU) Rural residents in Kaifeng remain poor, however, 
and per capita rural income is only RMB 2714 (USD 340), An 
stated.  Local officials said that they will continue to 
focus on raising rural incomes and strengthening social 
services such as education and health care.  Officials 
stated that their greatest concern in Kaifeng is the 
growing conflict between rapid industrialization and 
preserving arable land.  They claimed that the local 
government always offers compensation to farmers whose land 
is expropriated for development projects, and the most 
important element of the compensation is providing training 
to farmers who want to work in the city.  Officials at the 
Agriculture and Forestry Bureau said that they remain 
concerned, however, about the long-term impact of rapid 
urbanization and resulting land confiscations on rural 
stability. 
 
¶7. (SBU) Conflicts over the use of land are not limited, 
however, to the fringes of urban areas.  In a model village 
development outside Kaifeng, one visibly upset farmer 
shouted to visiting Emboffs that she wanted to tell them 
her story about how she had been prevented from moving to 
the model village.  Local officials would say only that 80 
of 200 families in the village "had the ability to pay" to 
move to units in the model village. 
 
RANDT