VZCZCXRO4746
RR RUEHCN RUEHGH
DE RUEHGH #0603/01 2550029
ZNR UUUUU ZZH
R 120029Z SEP 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6260
INFO RUEHBJ/AMEMBASSY BEIJING 1408
RUEHCN/AMCONSUL CHENGDU 0886
RUEHGZ/AMCONSUL GUANGZHOU 0865
RUEHHK/AMCONSUL HONG KONG 1011
RUEHSH/AMCONSUL SHENYANG 0887
RUEHIN/AIT TAIPEI 0708
RUEHGP/AMEMBASSY SINGAPORE 0083
RUEHKO/AMEMBASSY TOKYO 0205
RUEHUL/AMEMBASSY SEOUL 0122
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6732

UNCLAS SECTION 01 OF 03 SHANGHAI 000603 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
STATE FOR INR/B 
STATE PASS FEDERAL RESERVE BOARD FOR JOHNSON/SCHINDLER; SAN 
FRANCISCO FRB FOR CURRAN/LUNG; NEW YORK FRB FOR DAGES/CLARK 
STATE PASS CEA FOR BLOCK 
STATE PASS USTR FOR STRATFORD/WINTER/MCCARTIN/ALTBACH/READE 
USDOC FOR 4420 
USDOC FOR ITA/MAC DAS KASOFF, MELCHER AND MCQUEEN 
TREASURY FOR EXEC - TSMITH, OASIA/ISA -DOHNER/BAKER/CUSHMAN 
TREASURY FOR WRIGHT AND AMB HOLMER 
NSC FOR MCCORMICK AND TONG 
 
E.O. 12958: N/A 
TAGS: ETRD EINV EFIN PINR PGOV PREL KIPR ELTN CH
SUBJECT: AMBASSADOR MEETS SHANGHAI MAYOR AND ATTENDS AMCHAM 
GOVERNMENT APPRECIATION DINNER 
 
 
(U) This cable is sensitive but unclassified and for official 
use only.  Not for distribution outside of USG channels or via 
the internet. 
 
¶1. (SBU) Summary: On September 6, the Ambassador, together with 
former Secretary of Commerce Don Evans, met with Shanghai Mayor 
Han Zheng.  Following the meeting, the three officials offered 
remarks at AmCham Shanghai's 7th Annual Government Appreciation 
Dinner attended by 120 Shanghai and provincial government 
participants and over 300 AmCham members -- a record-breaking 
turnout.  The Mayor outlined Shanghai's continuing rapid 
economic development and the important role U.S. investment and 
trade plays in the city's economy.  The Ambassador thanked 
Shanghai for its support for U.S. business and welcomed 
continued cooperation with AmCham and its member companies.  He 
also urged greater enforcement of intellectual property rights 
and food and product safety standards as well as greater opening 
of the financial services sector.   Former Secretary Evans noted 
that China could best modernize its financial services sector by 
further opening to foreign competition.  End summary. 
 
-------------------------------------- 
 
Win - Win Results with U.S. Businesses 
 
-------------------------------------- 
 
¶2.  (SBU) The Mayor welcomed the contributions that U.S. 
investors and businesses have made to Shanghai's economic 
development and added that cooperation with U.S. businesses has 
produced win-win results.  Han said that the U.S.-Shanghai 
business partnership is one of the closest in the world, noting 
that there are over 5,500 U.S. investment projects in the city 
with a cumulative total investment of USD 11.2 billion.  U.S. 
invested companies in Shanghai thus account for approximately 
one-eighth of the total of 40,000 foreign invested companies in 
Shanghai.  Local U.S. businesses also account for a large 
proportion of Shanghai's imports and exports. 
 
------------------- 
Shanghai Doing Well 
------------------- 
 
¶3.  (SBU) Mayor Han summarized the most recent economic figures 
this year for the municipality and was happy to announce that 
Shanghai is "doing well."  Through August 2007, Shanghai's GDP 
growth reached 13.1 percent and FDI grew by 10 percent over the 
same period last year.  Exports also rose, increasing by 20 
percent.  Consumer retail sales were up 14 percent as was urban 
capita disposable income; rural per capita disposable income was 
up 10 percent.  Meanwhile, the consumer price index had risen by 
only 2.2 percent and unemployment had dropped by 0.2 percent. 
(Note: During the dinner, Han offered slightly different 
numbers: a 12 percent rise in consumer retail sales; and an 11 
percent rise in rural disposable incomes.  End note.) 
 
-------------------------- 
 
A Busy Season for Shanghai 
 
-------------------------- 
 
¶4.  (SBU) The Mayor stated that Shanghai is entering a busy 
season for the next few months.  It will host the FIFA Women's 
World Cup on September 10, a Formula 1 race later in the month, 
the Special Olympics in October, and several other major events. 
 He welcomed the Ambassador's participation at the Special 
Olympics and thanked the President for his support of the Torch 
 
SHANGHAI 00000603  002 OF 003 
 
 
Run event in Washington, D.C.  Han joked that with all of these 
high-profile events going on in the municipality, the Ambassador 
might want to consider setting up an office in Shanghai.  Former 
Secretary Evans expressed appreciation for Shanghai's 
 
SIPDIS 
willingness to host the Special Olympics, noting that the event 
is much like trade: everyone who participates wins. 
 
¶5.  (SBU) The Ambassador acknowledged the Mayor's busy schedule 
and thanked Han for taking the time to attend the Amcham event. 
The Ambassador noted that the large number of Shanghai 
government officials attending the dinner is a tangible symbol 
of the Shanghai government's support for U.S. businesses. 
 
--------------------------------------------- ----- 
Push the Relationship Forward, Reject Isolationism 
--------------------------------------------- ----- 
 
¶6.  (SBU) In his dinner remarks, the Ambassador noted that U.S. 
companies make a meaningful contribution to Shanghai's economic 
growth.  He acknowledged that the bilateral trading relationship 
faces critics in both countries.  The best response to U.S. 
criticism would be for China to do more to protect and enforce 
intellectual property rights, improve and enforce food and 
product safety standards, and take additional steps to open up 
the financial services sector.  He noted that the upcoming 
meetings of the Joint Commission on Commerce and Trade and the 
Strategic Economic Dialogue will present opportunities to push 
forward bilateral economic relations. 
 
¶7.  (SBU) Former Commerce Secretary and current CEO of the 
Financial Services Forum, Don Evans, noted that over the past 
four years, the United States and China together have accounted 
for more than half of the world's economic growth.  China is the 
United States' second largest trading partner, and its fastest 
growing.  Open commerce, Evans said, is a win-win situation for 
both countries and is never a zero-sum game.  The world has 
nothing to fear from China's economic growth which, in fact, 
creates opportunities for U.S. businesses and U.S. workers.  To 
fully enjoy the benefits of trade, however, we must reject 
protectionism by either side.  For example, Evans said, the 
fastest way for China to modernize its financial services sector 
is to open it further to foreign competition.  That will allow 
China to utilize foreign firms' expertise and talents to benefit 
China's consumers. 
 
------------------------- 
Developing a Dynamic City 
------------------------- 
 
¶8.  (SBU) Speaking without any notes, Mayor Han gave an overview 
of Shanghai's economic policy objectives and infrastructure 
expansion plans.  He explained that in accordance with Central 
Government directives, Shanghai is drawing on the best practices 
of all regions and cities to become an economic center, a 
financial center, a trade center, and a shipping center. 
Shanghai is focused on innovation as the future driver of 
economic growth.  To make Shanghai more dynamic, its businesses 
-- both foreign and domestic -- must be more dynamic.  To that 
end, Shanghai is committed to improving education to provide 
talent for businesses seeking to locate in the municipality, and 
Shanghai is committed to protecting the environment. 
 
¶9.  (SBU) Shanghai is also focused on improving its 
infrastructure.  By 2010, the combined passenger capacity at 
Pudong and Hongqiao airports will be 80 million people.  By 
2012, they will be able to handle 100 million people and 8 
million tons of air cargo per year.  Shanghai's seaport is 
expected to handle 26 million TEUs this year alone.  Shanghai is 
 
SHANGHAI 00000603  003 OF 003 
 
 
also focusing on improving regional transportation links with 
the 15 other cities within the Yangtze River Delta region.  By 
2010, there will by 8,000 kilometers of highway linking all of 
the major cities together.  Han noted that there are currently 
120 subway stations under construction in Shanghai.  By 2010, 
Shanghai will have 400 kilometers of subway lines, compared to 
the current 130 kilometers.  By 2012, that will have increased 
to 500 kilometers of subway lines in operation. 
KJARRETT