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INFO RUEHBJ/AMEMBASSY BEIJING 1527
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RUEHGZ/AMCONSUL GUANGZHOU 0932
RUEHSH/AMCONSUL SHENYANG 0955
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RUEAEPA/EPA WASHINGTON DC
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RUEHRC/USDA FAS WASHDC
RUEHGH/AMCONSUL SHANGHAI 6955

UNCLAS SECTION 01 OF 03 SHANGHAI 000736 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR OES-I ANN COVINGTON 
EPA FOR INTERNATIONAL - NGUYEN AND MCCASKILL 
 
E.O. 12958: N/A 
TAGS: SENV PGOV EINV ECON CH
SUBJECT: HANGZHOU:  GOING GREEN, FOR FUN AND PROFIT 
 
 
¶1. (U) SUMMARY:  Renowned within China for its natural beauty, 
Hangzhou is beginning to attract international attention for its 
economic growth and high quality of life.  While Hangzhou's 
government claims that these successes are due to its commitment 
to preserving the environment, there is no question that 
Hangzhou will also profit significantly from its "green 
revolution."  The success of its efforts at self-promotion was 
evident during Hangzhou's Ninth Annual Tourism Expo, held at the 
famed West Lake from October 27 to November 10.  West Lake 
Expo's three-fold purpose, namely to:  1) Showcase Hangzhou as a 
tourism and investment destination; 2) Promote Hangzhou as a 
host city for tradeshows and conventions; and 3) Serve as a 
festival site for local residents is clearly starting to "bring 
in the green" and reap long-term rewards for Hangzhou.  END 
SUMMARY. 
 
The 9th Annual West Lake Expo 
----------------------------- 
 
¶2.  (U) At the invitation of the Hangzhou Foreign Affairs 
Office, Conoff attended the opening of the two week Ninth Annual 
West Lake Expo on October 27 and 28.  The event was attended by 
representatives from several foreign missions, local government 
officials, and Chinese celebrities.  The Expo kicked off with an 
official reception on October 27, followed by an extravagant 
Opening Gala Show, with performances by several famous Chinese 
pop stars. 
 
BREAKFAST WITH THE BOSS 
----------------------- 
 
¶3.  (U) On the morning of October 28, while the rest of the 
diplomatic delegation toured local cultural sites, Conoff 
attended a one-on-one traditional breakfast with Yeh Min, 
Hangzhou Municipal Government's Vice Secretary-General and the 
organizer of the West Lake Expo.  Over breakfast in Hangzhou's 
famous lakeside teahouse, Mr. Yeh explained the purpose and 
goals of the annual event. 
 
Increasing tourism, Attracting Investment 
----------------------------------------- 
 
¶4.  (U) A Place for Tourism:  Founded over 2,000 years ago, 
Hangzhou is famous for its natural beauty and historic relics. 
It ranks as one of the top tourist destinations in China, not 
only for domestic tourism, but also attracting overseas Chinese 
tourists, retirees and investors.  Despite recent urban 
development, Hangzhou has carefully preserved its cultural 
heritage.  The centerpiece of Hangzhou is West Lake, which has, 
for centuries, typified the aesthetic found in traditional 
Chinese paintings:  glassy waters surrounded by weeping willows, 
bordered by green hills topped by pagodas.  Hangzhou is also one 
of China's most livable cities, with many residents drawn to the 
benefits of this "paradise on earth." 
 
¶5.  (U) A Place for Business:  Although tourism is a significant 
part of the local economy, the Hangzhou Municipal Government is 
successful in promoting Hangzhou as a business location.  In 
addition to traditional textile, tea, and silk industries, 
Hangzhou also hosts several large, modern businesses.  For 
example, Hangzhou houses the headquarters of Wahaha, China's 
largest beverage company.  Given its idyllic surroundings, 
Hangzhou is also known as the design capital of Eastern China 
and is home to the famous China Academy of Fine Art and Design. 
800 architects and interior designers have set up practices in 
Hangzhou, and approximately 2300 furniture factories are located 
in the region.  The city has also caught the attention of the 
financial sector, with Citibank recently opening its first 
Hangzhou office.  Ms. Cathy Dou, Citibank Hangzhou Branch 
Manager, described Hangzhou as a "key economic center that 
continues to prosper.  There is high demand in Hangzhou for 
banking and wealth management services by a sophisticated 
population."  The Hangzhou municipal government is committed to 
creating a "Silicon Valley in Paradise" and has attracted 
several high-tech industries in the pharmaceuticals, IT and 
environmental engineering sectors.  Toshiba's only overseas 
production plant for laptop computers is located in Hangzhou. 
 
¶6.  (U) Antiquity and Modernity:  The Expo's Opening Gala Show 
typified Hangzhou's blend of antiquity and modernity, as 
 
SHANGHAI 00000736  002 OF 003 
 
 
fireworks exploded alongside a special performance stage 
featuring 10 enormous digital screens that floated in the middle 
of the West Lake.  The performance was broadcast live across 
China by the state television channel (CCTV).  Mr. Yeh expressed 
confidence that this national broadcast would boost Hangzhou's 
reputation as a tourism and investment destination.  For 
pictures of this impressive display, please go to the website: 
http://en1.chinabroadcast.cn/3100/2007/10/28/ 1301@288508.htm. 
 
CHINA'S PREFERRED TRADESHOW AND CONVENTION DESTINATION 
--------------------------------------------- ---------- 
 
¶7.  (U) Global Attention:  Hangzhou hopes to become China's top 
destination for tradeshows and conventions.  Mr. Yeh commented 
that while conventions and tradeshows are drawn to Las Vegas by 
the lure of casinos and gambling, Hangzhou hopes to attract 
these events by the draw of its cultural tourism and scenic 
beauty.  Mr. Yeh further noted that Hangzhou would like to 
establish a sister city relationship with Las Vegas, to learn 
from Las Vegas' convention and tradeshow successes.  To promote 
the city as an international destination, Hangzhou and the World 
Leisure Organization hosted the first-ever World Leisure Expo in 
2006, a series of exhibitions, special events, conferences, 
trade shows, festivals and training programs.  According to Mr. 
Yeh, in upcoming years Hangzhou is slated to host regional 
meetings of the World Economic Forum and APEC.  Yeh was 
confident that Hangzhou's long-standing tourism infrastructure 
readily lends itself to hosting conventions and tradeshows, and 
remarked that bookings and reservations for these events are on 
the rise. 
 
A Party for the "Little" People 
------------------------------ 
 
¶8.  (U) One for the Record books:  In total, 72 cultural and 
commercial events took place throughout the city during the 
two-week Expo.  All events were free and open to the public.  Of 
special note was the November 3 event, "Silicon Valley in 
Paradise on the Earth, Binjiang Evening - 2007 Hangzhou 
International Fireworks Show."  According to Mr. Yeh, this event 
would break the Guinness Book World Record for firework 
displays, which he said, "is only fitting, since it was the 
Chinese who invented fireworks."  Fireworks were launched from a 
massive platform built across a local river.  Fireworks displays 
included "caption fireworks, computer-controlled stunt 
fireworks, flashing fireworks, fireworks in the upper air, 
artistic fireworks in the medium and lower air, candle lighting 
fireworks on the top of skyscrapers, and fireworks horizontally 
shot at the audience to achieve a three-dimensional effect." 
Hangzhou received registration notices from over 5,000 tour 
groups from across China to attend the fireworks show. 
 
¶9.  (U) In addition to hosting cultural events, local businesses 
were encouraged to give out free samples of their wares. 
Outside the most expensive teahouse in Hangzhou, Mr. Yeh (whose 
16-year-old son is a boarding student at a private school in 
Flushing, NY) pointed out a six-foot tall plastic tea pot with a 
spigot, dispensing free tea to the "peasants."  Yeh said that 
the Expo is "as much for the little people as it is for domestic 
and international visitors." 
 
¶10.  (U) The Environment, Hangzhou's greatest Asset:  According 
to Mr. Yeh, each of the 72 cultural and commercial events is 
sponsored by local companies, not by the Hangzhou Government. 
Yeh emphasized, "The Hangzhou Municipal Government doesn't spend 
money on events and activities; it spends money on protecting 
Hangzhou's natural beauty."  Mr. Yeh recognized that, "It is 
this natural beauty which makes living and doing business in 
Hangzhou desirable."  He reinforced several times that the local 
government is doing all that it can to beautify the city, keep 
the air clean, and maintain Hangzhou as a "paradise on earth." 
 
¶11.  (U) To reinforce this perception, the Hangzhou Foreign 
Affairs Office (FAO) organized a tour for diplomats of the Xixi 
Wetland Park, the first national wetland park in the country. 
Traditionally, the Xixi Wetland area had been inhabited by 
fisherman and farmers.  However, seeking to preserve "the 
tranquil, wild, light and elegant" environment, the municipal 
government evicted all residents and created a natural preserve. 
 Visitors can cruise the winding inlets, bird-watch, and 
 
SHANGHAI 00000736  003 OF 003 
 
 
participate in environmental education activities.  By 2009, the 
China Wetland Museum is expected to open - the first state-level 
wetland museum of its kind in China.  The municipal government 
hopes that tourists and visitors who come to Hangzhou to 
appreciate the natural beauty of West Lake will also be drawn to 
the Xixi Wetland Park as an eco-tourism destination.  To attract 
convention organizers and conference attendees, the municipal 
government has constructed a meeting hall, conference rooms, and 
a small hotel in the park.  According to the Hangzhou FAO, the 
Xixi Wetland Park symbolizes Hangzhou's commitment to protecting 
the environment. 
 
Self-Promotion Pays Off 
----------------------- 
 
¶12.  (U) Mr. Yeh confirmed that Hangzhou's star is rising.  In 
2006, Forbes magazine ranked Hangzhou as the number one city in 
China for business for the fourth year in a row.  Also, for 
three years in a row, the World Bank has recognized Hangzhou as 
the best Chinese destination for investment.  Numerical data 
also supports that Hangzhou is on the rise.  In 2006, Hangzhou's 
GDP was RMB 345 billion (USD 46 Billion).  Its GDP per capita 
was RMB 38,247 (USD 4,620), which ranks eighth among China's 659 
cities.  In addition to its economic potential, Hangzhou is 
receiving increased recognition as a "livable" city.  In recent 
years, Hangzhou won the "International Garden City Award" as 
well as the "UN Best Human Habitat Award."  Mr. Yeh also 
commented that Hangzhou reaps social benefits from its natural 
beauty as well.  A recent census by the central government found 
that Hangzhou has the highest marriage rate in all of China. 
Mr. Yeh, explains this is because "young couples strolling along 
the lake become caught up in the lake's romantic beauty, and 
decide to get married."  On October 13, 2007, one hundred 
couples from all over China took part in a mass wedding ceremony 
on the West Lake.  To view the festivities please go to the 
website:  http://www.china.org.cn/english/China/227975. htm 
Mr. Yeh also proudly commented that Hangzhou has one of China's 
highest education rates, lowest crime rates, and highest income 
rates.  All of these factors make Hangzhou a wonderful place to 
live, visit and do business. 
 
COMMENT 
------- 
 
(SBU) Hangzhou Loves the Green (AS IN money):  Mr. Yeh really 
pushed the environmental protection line.  In the face of recent 
press reports about China's un-winnable battle with pollution, 
Hangzhou is making a concerted effort to promote itself as 
China's "green city."  A visit to a high-tech corridor in 
Hangzhou was cancelled at the last minute, thus allowing the 
diplomatic delegation's focus to fall exclusively on Hangzhou's 
environmental protection efforts.  The mere fact that the bulk 
of the diplomatic tour was spent floating on a boat in the Xixi 
Wetlands Preservation Park served to reinforce the message that 
Hangzhou wants to send to the international community: 
"Hangzhou is green."  It bears noting, however, that at no time 
during the tour, or during the conversation with Mr. Yeh, did 
officials opine that preserving the environment was a worthy 
goal in and of itself.  It seems that in Hangzhou it is well 
understood that being green is good for business.  END COMMENT. 
JARRETT