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RR RUEHCN RUEHGH
DE RUEHGH #0283/01 1340737
ZNR UUUUU ZZH
R 140737Z MAY 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5800
INFO RUEHBJ/AMEMBASSY BEIJING 1062
RUEHCN/AMCONSUL CHENGDU 0625
RUEHGZ/AMCONSUL GUANGZHOU 0607
RUEHSH/AMCONSUL SHENYANG 0629
RUEHIN/AIT TAIPEI 0503
RHEHAAA/NSC WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6198

UNCLAS SECTION 01 OF 04 SHANGHAI 000283 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/CM, INR, R, EAP/PD, EAP/P, AND, IIP/G/EAP 
DEPARTMENT FOR INR/EAP - CLARKE 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE 
TREAS FOR AMB HOLMER, WRIGHT, TSMITH 
TREAS FOR OASIA - DOHNER/HAARSAGER/CUSHMAN 
DOC FOR ITA/MAC -  DAS KASOFF, MELCHER, MCQUEEN 
DOC FOR ITA - LEHRMAN 
USDOC ALSO FOR OGC -  SULLIVAN, BLANK 
LOC/COPYRIGHT OFFICE - STEPP 
USPTO FOR INT'L AFFAIRS - LBOLAND 
NSC FOR WILDER AND TONG 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV SOCI OEXC OIIP KPAO CH
SUBJECT: EAST CHINA DISPATCHES, MAY 14, 2007 
 
 
(U) Sensitive but Unclassified - please protect accordingly. 
Not for dissemination outside USG channels. 
 
¶1. (SBU) Summary:  In this Dispatch, we learn that Shanghai 
loves luxury cars, anti-Japanese sentiment still simmers, 
Internet rumors spread quickly in Shanghai, even migrants dream 
of making it big on the stock market, information on IPR 
continues to be welcomed, and some Shanghai youth are passionate 
about punk music.  This is the first in a series of periodic 
short-subject cables designed to offer more anecdotal 
reflections on life in East China. 
 
Cars, Cars, Cars 
---------------- 
 
¶2.  (U) For the week of April 22-28, Shanghai was taken over by 
the 12th Annual Shanghai Auto Show.  According to CCTV (Chinese 
national television), the show had record attendance of around 
500,000 visitors from over 100 countries and regions.  Most 
attendees appeared to be local Chinese, including many couples 
and families.  All the major and not so-major automakers 
participated in the exhibition including GM, Toyota, BMW, and 
Iran's Khodra.  Chinese brands Chery, Roewe and Great Wall also 
had prominent exhibitions. 
 
¶3.  (U) Generally, all car companies, even brands that might be 
considered more budget-oriented in the United States, portrayed 
their cars as passports to a luxury lifestyle.  Information desk 
attendants at one exhibition wore equestrian clothing, while the 
Caucasian models in cocktail dresses and smoking jackets draped 
themselves on the cars.  Most displays did not make serious 
mention of fuel economy or safety measures.  While there were 
hybrid gas/electric cars on display, sales people noted that 
these cars were not for sale in China.  Most attendees flocked 
around the cutting edge concept cars and luxury brands.  There 
was wide coverage of the auto show in both western and Chinese 
media, with many articles emphasizing the emergence of Chinese 
brands.  However, based on our trip to the show, foreign brands 
still drew the biggest crowds. 
 
"I Wouldn't Have Fixed Your Tire if You Were Japanese" 
--------------------------------------------- --------- 
 
¶4.  (U)  While overt acts of hostility towards Japanese in East 
China remained rare over the past year, passive aggression, 
according to some Japanese contacts still simmered.  During a 
recent intellectual property rights (IPR) conference hosted by a 
security agency for Japanese companies, many Japanese companies 
complained of police, courts, and administrative intellectual 
property bureaus, especially in rural areas, refusing to take 
action to protect their IPR because they were "Japanese 
companies."  The Japanese business representatives noted several 
instances of the same authorities taking action to protect 
intellectual property from U.S., European, and other Korean 
companies while neglecting that of Japanese firms.  Japanese 
companies noted similar occasional frustrations with obtaining 
other government services and finding Chinese business partners. 
 
¶5.  (U)  A recent encounter between a Consulate Econoff and a 
bicycle repairman highlighted this latent passive aggression 
towards Japanese.  One evening as the Econoff road his bicycle 
home from work, he had a flat tire.  Within a short time, a 
repairman passing by on his scooter stopped to help fix the 
tire.  After inquiring what country the Econoff came from, the 
repairman quickly replied, "I am glad you are American.  I 
wouldn't have fixed your tire if you were Japanese."  The 
repairman went on to explain that his family hailed from Nanjing 
and had survived the Nanjing massacre.  He also explained that 
he, like many of his acquaintances, might not want to directly 
harm Japanese but definitely had no interest in helping or 
befriending them. 
 
 
SHANGHAI 00000283  002 OF 004 
 
 
Facts Don't Impede Traffic on Shanghai's Information Superhighway 
--------------------------------------------- -------- 
 
¶6.  (SBU) One of the many challenges facing the Consulate is 
navigating China's increasingly hi-tech, Internet-driven media 
environment.  With its potent combination of the highest number 
of Internet users of any city in China (28.7 percent of citizens 
are Internet users as compared to 10.5 percent nationwide, 
according to a recent report from the government-owned China 
Internet Network Information Center), and increasing competition 
among media organizations for advertising revenue and customers, 
Shanghai media easily fall victim to inaccurate reporting and 
rumors swept along by the lightning speed of the Internet.  The 
most poignant recent example of this phenomenon was how the 
Shanghai press picked up and spread rumors surrounding the 
identity of the Virginia Tech gunman. 
 
¶7.  (SBU) Following the tragic events in Virginia on April 16, 
rumors about the identity of the gunman took on a life of their 
own in Shanghai.  After the initial erroneous reports in various 
U.S. media (Chicago Sun Times followed by Fox News) that the 
assailant was a Chinese male who had been issued a student visa 
in Shanghai, Consulate phones started to ring.  Local media 
outlets and citizens were quickly convinced that this 
information was accurate, perhaps fueled by a commonly held 
belief that the USG controls American media organizations much 
the way the Chinese government does, so anything reported must 
be authoritative.  By the end of April 17 in Shanghai, the 
speculation had taken a turn for the sinister - because the 
gunman was presumed to have been from Shanghai, local citizens 
and journalists were convinced that this would lead to a total 
breakdown in U.S.-China relations and the USG would stop issuing 
visas, particularly to Chinese males.  Consulate sought to 
counter these rumors by issuing a statement late on April 17 
that "The U.S. continues to welcome legitimate student 
travelers.  The American Embassy and Consulates in China 
continue to issue visas in accordance with U.S. law.  There have 
been no changes to our visa procedures."  While in the end, no 
local media chose to carry this statement, it helped put the 
visa rumors to rest. 
 
¶8.  (SBU) Comment.  China's media environment remains tightly 
controlled and largely closed.  Average citizens are not 
accustomed to distinguishing between government information and 
press reports and are far less likely to question the veracity 
and motivation of a media report than their American 
counterparts might be.  This recent rumor incident underlines 
the growing power of the Internet to spread news to ever wider 
audiences in China, but also its weakness as a tool to discern 
fact from rumor.  End comment. 
 
Newly Arrived Migrant Worker Buys Stocks 
---------------------------------------- 
 
¶9.  (U) While admitting that she did not understand how the 
stock markets work, a newly arrived in Shanghai migrant worker 
told Econoff that she had invested RMB 250 (USD 32) in 
Shanghai's stock market.  The Shanghai Stock Exchange, which has 
risen 50 percent to new highs since the start of the year 
continues to attract new investors.  The market grew 130 percent 
in 2006.  The migrant, who was working as a hairdressing 
assistant, said that she had purchased shares priced at RMB 2 
(USD 0.25), in a company that she believed to be involved with 
hydro-electric power generation.  She was persuaded to buy on 
the recommendation of her coworkers who routinely boasted about 
their own stock market gains.  The migrant worker, originally 
from Pu-Er, Yunnan Province, arrived in Shanghai just over a 
month ago.  She came to Shanghai by herself with no contacts 
here in the city.  It took her five days to get here via bus and 
train and she found a job on her second day.  Her monthly salary 
was about RMB 900 (USD 120).  She hoped to make enough money 
here in Shanghai over the next two years to be able to return 
 
SHANGHAI 00000283  003 OF 004 
 
 
home and start a family. 
 
Spotlight on Pirated Patents, Counterfeit Copyrights and Tainted 
Trademarks 
--------------------------------------------- ----------- 
 
¶10.  (U) As part of Post's ongoing outreach on IPR, Consulate 
invited Professor Michael Ryan, Director of the Creative and 
Innovative Economy Center at George Washington University Law 
School, to visit East China as a U.S. Speaker.  Dr. Ryan has 
lectured and conducted research on intellectual property, 
technology, and trade issues in over 20 countries, and is an 
expert on IP issues related to the entertainment, 
pharmaceutical, and biotech industries in developing countries. 
April 13 and 16, Dr. Ryan gave presentations at the Jiangsu 
Province Economy Regulation Office, Nanjing University of 
Science & Technology, the Shanghai Intellectual Property Rights 
(IPR) Bureau, and East China University of Politics and Law's 
IPR School. 
 
¶11.  (U) At the first three venues, Dr. Ryan spoke to more than 
150 local government officials and students on "The Role of 
Intellectual Property in the Innovation Cycle" and at the latter 
venue, about 100 students heard him address "Innovation, 
Copyrights, and Patents in the Software Sector."  During the Q&A 
sessions, most of the questions he fielded related to the 
copyright and market access cases initiated by the USG against 
China on April 9 at the WTO, but the audiences also showed great 
interest in the U.S. phenomenon of academia-industry clusters 
and their connection to economic growth in urban areas around 
the U.S.  IPR officials and students appreciated Dr. Ryan's 
comments because he provided a more informed and balanced view 
of the rationale for China enforcing its IPR laws. 
 
Shanghai Rocks Out To Sonic Youth 
--------------------------------- 
 
¶12.  (U) In the past year Shanghai has hosted an increasing 
number of concerts by foreign performers, including the Rolling 
Stones, James Brown and the Black Eyed Peas.  The audiences at 
all of the concerts have been remarkably consistent, mostly 
foreigners (of all ages) with few Chinese.  As a result, most 
foreigners expected a similar audience at an April 24 show by 
New York-based punk band Sonic Youth.  Unbeknownst to most 
(Econoff included) Sonic Youth has a large, devoted following in 
China. 
 
¶13.  (U) The concert was held at the Shanghai Concert Hall, a 
historic building in the center of People's Park that primarily 
hosts classical music concerts.  Before the show started the 
mostly twenty-something clean-cut Chinese audience was seated 
politely, many still in work attire, most with backpacks, a far 
cry from the typical Sonic Youth crowd in the United States. 
There was no alcohol or soda sold, only water.  As soon as the 
lights dimmed, however, pandemonium erupted. 
 
¶14.  (U) The Chinese security seemed unsure how to react; for 
the first hour every time they tried to control the audience, 
the band would castigate them.  Five minutes into the show the 
audience rushed the stage but the security stopped the surging 
crowd and aggressively pushed the audience back to their seats 
at which point the band stopped singing and asked the security 
to let the crowd approach the stage.  Security held firm until a 
particularly popular song whipped the crowd into such a frenzy 
that it overwhelmed the security guards and the audience took 
over the stage pit.  As the concert went on, security eased up 
more and more so that by the end they were allowing stage diving. 
 
¶15.  (U) According to Lilo Wang, a 24-year old accountant, who 
spent most of the show in the heart of the mosh pit, Sonic Youth 
had been popular in China for a long time and within the rock 
crowd was extremely popular.  She said that Shanghai's rock 
 
SHANGHAI 00000283  004 OF 004 
 
 
scene was weak because all everyone cared about was making money 
and they were not passionate about life.  She said the cost of 
the tickets (RMB 480 or USD 62) was worth it and that she hoped 
more bands like Sonic Youth would come to China and that rock, 
especially punk, would grow in popularity in Shanghai. 
 
¶16.  (U) Regards from Shanghai. 
JARRETT