VZCZCXRO9772
RR RUEHCN RUEHVC
DE RUEHGH #0690/01 2990414
ZNR UUUUU ZZH
R 260414Z OCT 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6392
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASH DC
RUEHGH/AMCONSUL SHANGHAI 6877

UNCLAS SECTION 01 OF 02 SHANGHAI 000690 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR OES AND EAP/CM 
STATE PASS USTR FOR STRATFORD/WINTER/LOI/MCCARTIN/ALTBACH/READE 
CEA FOR BLOCK 
USDOE FOR MIZROCH/CHIANG/GINSBERG 
USDOE FOR INTERNATIONAL/PUMPHREY AND GEBERT 
USDOC FOR ITA/MAC DAS KASOFF, MELCHER AND MCQUEEN 
TREASURY FOR DOHNER/SOBEL/CUSHMAN/MOGHTADER/WINSHIP 
TREASURY FOR WRIGHT AND AMB HOLMER 
NSC FOR WILDER AND TONG 
 
E.O. 12958: N/A 
TAGS: ENRG SENV EINV ELTN EIND CH
SUBJECT: SHANGHAI INVESTS USD 175 MILLION IN AUTOMOTIVE RESEARCH 
 
REF: SHANGHAI 541 
 
SHANGHAI 00000690  001.2 OF 002 
 
 
(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:  In conjunction with the United States-China 
Science and Technology Executive Secretaries Meeting (ESM), the 
U.S. delegation visited a high-tech park and two high-tech 
projects in Shanghai on October 12.  Interlocutors reported that 
the Shanghai municipal government aims to build up the 
automotive industry and has already invested almost USD 175 
million in automotive research and development projects at 
Shanghai's Tongji University.  These funds are being used to 
develop automotive fuel cell technologies and an advanced wind 
tunnel for vehicle and part design.  Their current fuel cell 
prototype vehicle has sufficient power and responsiveness to 
power a normal car, but is very loud and prohibitively 
expensive.  There is sufficient hydrogen produced as a 
by-product of Shanghai's steel and chemical industries to power 
all public transportation in Shanghai.  Due to open in March 
2008, Shanghai's wind tunnel will be the first full-scale 
automotive wind tunnel in China.  End summary. 
 
¶2. (SBU) State Department Office of Science and Technology 
Cooperation Director E. Bruce Howard led a delegation to the 
United States-China Science and Technology Executive Secretaries 
Meeting (ESM) held in Shanghai October 11-12.  In conjunction 
with the meetings, site visits were arranged on October 12 to 
Shanghai's Caohejing Hi-tech Park, and Shanghai's Tongji 
University's Fuel Cell Vehicle Facility and new wind tunnel 
project. 
 
--------------------------------------------- - 
Tongji University's Fuel Cell Vehicle Facility 
--------------------------------------------- - 
 
¶3. (SBU) The ESM delegation visited the Fuel Cell vehicle 
facility at Shanghai's Tongji University in Jiading (an 
administrative district in Shanghai city).  They toured the fuel 
cell vehicle lab and wind tunnel project.  Tongji University 
Automotive College Dean Yu Zhuoping and Vice Dean Ma Jun briefed 
the delegation on the development of fuel cell vehicles at 
Tongji University. 
 
¶4. (SBU) According to Yu, the Shanghai government has invested 
RMB 800 million (USD 106 million) in the development of Tongji's 
Clean Energy Automotive Engineering Research Center (CEAEC). 
More than half of these funds were earmarked for the wind tunnel 
project.  Yu said that Shanghai has invested so much money in 
automotive research in order to have balanced development in 
Shanghai.  Shanghai has Bao Steel up in the north, Pudong 
Airport to the east, Jin Shan Petrochemicals in the south, but 
no landmark to the west.  Given Jiading's strength in automotive 
industry, the government encouraged Tongji to set up its 
Automotive College in Jiading and supported it with a strong 
financial package. 
 
¶5. (SBU) Ma told the delegation that the performance of Tongji's 
latest prototype vehicle has almost met the standards for normal 
cars as far as acceleration and speed are concerned.  The 
biggest challenges facing them are reducing costs and developing 
necessary infrastructure.  Current cost to build such a fuel 
cell prototype vehicle is about RMB 1 million (USD 133,000), 
although unit cost could drop to RMB 700,000 (USD 93,000) if 
mass produced.  Infrastructure development is another 
bottleneck.  Currently Tongji only has built one hydrogen 
filling station.  The station is located close to its Jiading 
campus which is distant from the central part of Shanghai city. 
 
¶6. (SBU) Ma said that the hydrogen currently used by the 
vehicles is a by-product of the steel and chemical industries 
located in Shanghai.  He estimated that the two industries 
produce enough hydrogen to meet the demand of all taxis and 
buses in Shanghai if they were powered by fuel cells. 
 
¶7. (SBU) Members of the delegation test drove the fuel cell 
prototype vehicle.  They found that while the ride was 
 
SHANGHAI 00000690  002.2 OF 002 
 
 
comparable to normal cars, noise levels were high.  Ma explained 
that most of the noise came from an air compressor that was 
needed to supply sufficient oxygen to the fuel cell. 
 
-------------------------------------- 
Shanghai Automotive Wind Tunnel Center 
-------------------------------------- 
 
¶8. (SBU) Tongji University's Shanghai Automotive Wind Tunnel 
Center (SAWTC) Chief Engineer Yang Zhigang led the delegation 
through the SAWTC site, which is still under construction.  Yang 
said that the project, with a cost of almost RMB 500 million 
(USD 67 million), was initiated by Ministry of Science and 
Technology Minister Wang Gang when he was dean of Tongji 
University's automotive college.  SAWTC will be the first 
full-scale automotive wind tunnel in China.  The project 
includes an aerodynamic and aero-acoustic full-scale wind 
tunnel, a climatic full-scale wind tunnel and the supporting 
facilities for vehicle test preparation.  The project will 
provide R&D support and test services for automobile 
manufacturers, high speed train manufacturers, and vehicle 
components manufacturers for their product development.  The 
wind tunnel is scheduled to be in operation in March 2008. 
 
---------------------- 
Caohejing Hi-Tech Park 
---------------------- 
 
¶9. (SBU) The delegation met with Caohejing (CHJ) High-Technology 
Park President Chen Qingzhou and CHJ Science and Technology 
Department Manager Han Baofu.  CHJ was created as a state-level 
economic and technological development zone in 1988, and 
re-designated as a state-level high-tech industrial development 
zone in 1991.  According to Chen, the four pillar industries in 
the park are Information Technology, New Materials, 
Biotechnology & Pharmaceuticals, and Aeronautics & Astronautics. 
 Chen expressed an interest in seeking more cooperation with 
United States businesses, as U.S.-invested companies account for 
the largest share (27 percent) of foreign investment in CHJ 
Park.  The first foreign company established in the park was the 
Foxboro Company.  Other major players in the park include: 
Philips, Du Pont, 3M, Cisco, Lucent, and Unilever. 
 
¶10. (SBU) Chen told the delegation that CHJ is expanding 
geographically.  A new sub-park called Pujiang Hi-tech Park has 
been set up nearby to accommodate the growing demand for 
manufacturing and research space.   The new park is dedicated to 
developing modern manufacturing in the fields of electronics, 
computer, new materials & energy.  The park is also in the 
process of building its fifth pillar industry, i.e. Modern 
Service Industry (service outsourcing). 
 
¶11. (U) The delegation cleared on this report. 
JARRETT