VZCZCXRO7153
RR RUEHGH RUEHVC
DE RUEHCN #0036/01 0341004
ZNR UUUUU ZZH
R 031004Z FEB 07
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2380
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 2875

UNCLAS SECTION 01 OF 02 CHENGDU 000036 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM AND EB 
NSC FOR CHRISTINA COLLINS 
 
E.O. 12958: N/A 
TAGS: ECON EAGR ELAB PGOV SOCI CH
SUBJECT: CHONGQING STRUGGLES WITH RURAL POVERTY, RESETTLEMENT, 
DROUGHT 
 
REF: A) CHENGDU 33  B) 06 CHENGDU 1022 
 
CHENGDU 00000036  001.2 OF 002 
 
 
¶1. (SBU) Summary.  While Chongqing officials praise their own 
response to last summer's drought -- the worst in the region in 
over a century -- and speak optimistically of development 
prospects, necessary funding for water conservation, education, 
and health care may be lacking.  The city of Fuling, featured in 
the book "River Town" by a former Peace Corps volunteer, has 
seen large-scale construction of protective dikes and new 
housing projects, but local job opportunities appear scarce.  An 
upbeat situation?  Decidedly not.  End summary. 
 
¶2. (U) Consul General and Congenoff traveled to Chongqing and 
the city of Fuling January 22-28, meeting with government 
officials to discuss rural poverty and the effects of last 
summer's drought, and visiting areas affected by the filling of 
the Three Gorges Dam reservoir.  A visit to a U.S.-invested 
agricultural project in Chongqing's Zhongxian County was 
described ref A. 
 
--------------------------------------------- --------------- 
A RURAL SECTOR BESET WITH PROBLEMS 
--------------------------------------------- --------------- 
 
¶3. (U) Congenoffs met with Chongqing Rural Working Office 
Director Mr. Xie Jinfeng to discuss the economic and social 
challenges facing Chongqing's rural population.  A 
representative of Chongqing's FAO sat in on the meeting. 
 
¶4. (U) Xie described how, although the Chongqing region's rural 
population is 23.5 million (out of a total 37.8 million), its 
rural economy accounts for only 15 percent of GDP.  During 2006, 
over 7 million of those rural residents left the countryside for 
jobs in urban areas - about half going to other provinces. 
Outside of Chongqing city, Guangdong, Hainan, Fujian, and 
Zhejiang are the most common destinations.  The income generated 
by those migrant workers accounted for a substantial part of 
rural GDP: in 2006, government figures claimed total rural per 
capita income of 2871 RMB (USD 368), but Xie said RMB 1203 (USD 
145) of that came from the earnings of migrant workers. 
 
¶5. (U) Xie listed three major priorities for Chongqing's 
government in 2007.  First is the need to improve rural 
infrastructure, especially irrigation/water conservation 
systems, roads, and telecommunications.  Xie said that Chongqing 
would seek increased funding from the central government to meet 
these objectives, and would encourage local governments and 
rural residents to pay more attention to the care of existing 
water conservation facilities. 
 
¶6. (SBU) Funding for rural education is another major priority, 
according to Xie.   He said recent central government directives 
had made 1.3 million Chongqing rural children eligible for free 
tuition and textbooks, but Chongqing needed more money from 
Beijing to cover these new expenses.  The final major rural 
priority was rural health insurance.  Xie stated that "only" 64 
percent of Chongqing's rural residents participated, a figure 
which he considered too low.  (Note: other interlocutors have 
given far lower participation figures.  End note.) 
 
--------------------------------------------- ------- 
WATER LACKING, AWARDS GALORE 
--------------------------------------------- ------- 
 
¶7. (SBU) Xie detailed the effects of the 2006 drought, the 
"worst in over 100 years" on Chongqing's rural economy: 22.3 
million people deprived of drinking water, direct economic 
losses of over RMB 800 million (USD 102 million), a reduction in 
grain output of over 2.58 million metric tons over 2005.  (Note: 
Rather improbably, Xie also stated that per capita rural income 
had nevertheless increased by two percent in 2006.  Admittedly, 
increased remittances from migrant workers may have played a 
role.  Other contacts in Chongqing noted to us that government 
officials usually refer to a "drop" of at least two to three 
percent in per capita incomes due to the drought.  End note.) 
 
¶8. (U) Discussing the reasons for the drought, Xie dismissed the 
idea of changes in Chongqing's microclimate due to the 
construction of the Three Gorges Dam, and instead blamed global 
warming.  He admitted, however, that Chongqing's water 
conservation system and irrigation network was unsophisticated 
and in need of repair, adding that local governments lacked the 
funds necessary to maintain the system properly.  Asked about 
the effectiveness of local leadership in coordinating the 
response to the drought, Xie heaped praise on Chongqing's 
officialdom: "The response was so effective that Party Secretary 
Wang Yang was named as one of the ten most capable municipal 
 
CHENGDU 00000036  002.2 OF 002 
 
 
officials in all of China in 2006!" 
 
----------------------------------------- 
RIVER TOWN TEN YEARS ON 
----------------------------------------- 
 
¶9. (SBU) Congenoffs visited the city of Fuling, made famous in 
former Peace Corps volunteer Peter Hessler's bestseller "River 
Town."  Although much of the older part of the city has been 
demolished, a massive dike now protects the lower elevations. 
New apartment buildings, hotels, and government offices have 
been constructed on higher grounds.  As a result, Fuling is now 
divided into an "old city" and a "new city," with a seedy 
section of low-rent hotels and massage parlors dividing the two 
areas.  Alongside the dike itself, authorities have encouraged 
the development of an "entertainment district," featuring wide 
sidewalks, art installations, night clubs, and restaurants. 
 
¶10. (SBU) Fuling officials gave a rosy view of Fuling's 
development prospects.  According to Fuling Resettlement Bureau 
Director Zhang Yanlu, almost 100,000 Fuling residents (out of a 
total of 300,000) have been resettled in new housing areas. 
Fuling Development and Reform Commission Director Xiao Lanyin 
claimed a local GDP growth rate of 13.5 percent, based largely 
on infrastructure construction and on the prosperity of its 
cigarette, pharmaceutical, and chemical processing industries. 
Fuling is also famous nationwide for the quality of its pickled 
mustard tuber.  (Note: A local resident interviewed informally 
by Congenoff later complained about the city's economy, citing a 
lack of employment opportunities: "Most young people go to 
Chongqing to look for jobs."  End note.) 
 
¶11. (SBU) Asked about challenges, Xiao admitted that 
transportation was his greatest concern.  Although Fuling is now 
linked to the highway system, a long-anticipated rail line has 
not yet been constructed.  And while Xiao waxed rhapsodic about 
the city's prospects as a deep-water port alternative to 
Chongqing during low-water seasons, he also admitted that 
construction of the new port was far from complete. 
 
¶12. (SBU) After Fuling, Congenoffs visited Zhongxian (ref B), 
downstream on the Yangtze about two hours from Fuling.  There, 
they toured Shibaozhai Temple, a historic site threatened by 
rising water levels.  To protect the temple, another massive 
dike was under construction, and tourist infrastructure such as 
modern toilets and elevated walkways were being built.   Nearby 
was a large resettlement village filled with new apartment 
buildings.  Almost all of the residents visible on the streets 
appeared younger than 15 or older than 50. 
 
--------------- 
COMMENT 
--------------- 
 
¶13. (SBU) Glossy official pronouncements and showcase projects 
aside, rural Chongqing faces serious challenges.  Post has 
previously reported on the number of displaced farmers on 
Chongqing's streets (ref B), and even a "windshield tour" of the 
reservoir area reveals widespread air and water pollution as 
well as poor housing and battered roads.  The lack of young 
people in the countryside and in smaller cities is also obvious. 
 Even assuming that there is no repeat of the 2006 drought this 
year, rural Chongqing needs all the help it can get from central 
and local authorities. 
BOUGHNER