VZCZCXRO6371
RR RUEHGH RUEHVC
DE RUEHCN #0300/01 3540743
ZNY CCCCC ZZH
R 200743Z DEC 07
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2709
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHCI/AMCONSUL CALCUTTA
RUEHCHI/AMCONSUL CHIANG MAI 0062
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3278

C O N F I D E N T I A L SECTION 01 OF 02 CHENGDU 000300 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM AND OES 
 
E.O. 12958: DECL:  12/20/2032 
TAGS: SENV PGOV PHUM SOCI CH
SUBJECT: CHINA NGO PROJECTS AND STRATEGIES:  THE NATURE CONSERVANCY 
 
REF: CHENGDU 269 
 
CHENGDU 00000300  001.2 OF 002 
 
 
CLASSIFIED BY: John Hill, Acting Consul General, Chengdu, 
Department of State. 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) Summary:  While the Nature Conservancy (TNC) believes 
the overall environment for non-governmental organizations to 
operate in China has been noticeably more difficult during the 
last few years than during the late 1990's, the increased focus 
by central and local government authorities on environmental 
issues appears to be facilitating its expansion beyond its 
original base in Yunnan Province.  As a foreign NGO, TNC is 
forbidden from eliciting funding from China's growing number of 
increasingly wealthy entrepreneurs, who also would receive no 
tax incentives to make contributions and likely be wary of 
possible political reprisals.  Nevertheless, with a loyal cadre 
of Hong Kong contributors, as well as funding from the United 
States, TNC appears to be well positioned to try to take on the 
"hot issue" of environmental protection in China.  End Summary. 
 
¶2.  (C) TNC China director told Congenoff in an early November 
visit to Kunming that the late 1990s were a boom period for 
non-governmental organizations (NGOs) working in southwest 
China's Yunnan Province.  The past several years, however, have 
been a more difficult period due to nervousness of the Yunnan 
provincial government about NGO activities.  Confrontation with 
the authorities is not the TNC work style in China (or the 
U.S.), noted the director, although it can in some circumstances 
be a useful tactic.  Since late 2006, stronger central 
government support for environmental work has brought a change 
in the attitude of the Yunnan provincial government, which now 
supports environmental work more strongly under its "Colorful 
Yunnan" tourism promotion strategy. 
 
¶3.  (C) As a foreign NGO, TNC may not raise money in the 
mainland of China, although its strong backers in Hong Kong last 
year contributed about one-third of the TNC China budget.  As an 
affiliate of a U.S. NGO, TNC China is subject to the same TNC 
standard audits as U.S. offices of TNC.  Most funding comes from 
the parent NGO in the U.S., although recently for the first time 
a TNC China project won some European Union funding.  The TNC in 
its China work has over the years gotten strong financial 
support and advice from companies such as Alcoa, Caterpillar, GM 
and Goldman Sachs. 
 
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TNC China Stresses National Parks Over Nature Reserves 
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¶4.  (SBU) TNC China in its policy promotion work has shifted 
from nature reserves towards promoting national park 
development.  Local governments have no incentive to create or 
support nature reserves since they lose the right to develop 
within the core zone of the reserve.  Moreover, nature reserves 
had often been imposed from above as unfunded mandates on local 
governments.  National parks are more palatable than nature 
reserves to local governments since park development loans are 
available and entrance fees of RMB 200 (USD 27) per visitor 
generate significant income. The tourist core area might cover 
for example 5 sq. km. of a 100 sq. km. national park. 
 
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Politics and Lack of Tax Incentives Inhibit Chinese Business 
Support for NGOs 
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---------------------------------------- 
 
¶5.  (C) Chinese environmental NGOs are small and local.   Having 
not yet developed the strong support from the Chinese business 
community that TNC enjoys in the U.S. limits its potential for 
growth in China.  One positive sign is the emergence of a group 
of wealthy PRC businesspeople, the Society of Entrepreneurs and 
Ecology.  The group, which assesses its members 100,000 RMB per 
year in dues, works in Inner Mongolia together with the Chinese 
government and the TNC's Beijing office to reduce the severity 
of sandstorms that plague Chinese cities in the northeast. 
These businesspeople, who come from the real estate, banking, 
and IT sectors may be able to increase interest among 
businesspeople in environmental protection, noted a TNC staffer. 
 Business people today do not get tax incentives for 
contributing to NGOs or charitable organizations.  They also 
fear potential reprisals should the government not appreciate 
business support for NGO work.  Capacity building for Chinese 
 
CHENGDU 00000300  002.2 OF 002 
 
 
NGOs is a priority for the TNC. 
 
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Kunming Head Office Manages Projects, Beijing Branch Works Policy 
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¶6. (SBU) In general, TNC projects are managed from Kunming while 
policy development cooperation with Chinese government partners 
such as the State Environmental Protection Administration, the 
Ministry of Water Resources, the State Forestry Administration, 
the State Council Poverty Alleviation Office and the National 
Development and Reform Commission are handled by the TNC Beijing 
office.  Nearly all TNC China staff are PRC citizens. 
 
¶7. (SBU) Embassy Beijing comment:  During the tenure of the 
current director, the Beijing office of the TNC has grown from 
one to 20 staffers. The TNC, with the World Wildlife Fund and 
Conservation International, is among the three biggest NGOs in 
China.  The TNC works closely with the national and provincial 
forestry administrations.  End comment. 
 
¶8.  (SBU) TNC continues to discuss with the Three Gorges 
Construction Co. minimizing environmental damage due to dams 
(see reftel) and restoring the natural flow of the Yangtze 
River.  Restoring the flow of the river would allow flooding of 
some downstream flood plains, involve the displacement of 
downstream people, as well as touch upon the politically 
sensitive question of the relative importance of flood control 
and power generation.  TNC, with GM funding, works together with 
the Ministry of Natural Resources on water quality monitoring of 
the mouth of the Yangtze. 
 
¶9.  (SBU) Most of TNC's work in China has been focused on Yunnan 
for its ecological diversity and the critical, Virginia-size, 
three rivers ecosystem area in and near Yunnan Province that is 
the source of the Yangtze, Yellow and Brahmaputra rivers. 
 
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Five Years Later, Most Peasants Still Use Solar Water Heaters 
and Stoves 
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¶10.  (SBU) In the Deqin Autonomous Prefecture (a Tibetan 
minority area) and Lijiang, solar water heaters and stoves have 
reduced consumption of firewood by local people.  A three-way 
split of costs among the TNC, local government and local users 
ensures that people make the project their own and do not simply 
see the NGO as a cash cow.   A five year follow-up check found 
that most of this equipment is still being used. 
 
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TNC Projects Branch Out from Yunnan Province 
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¶11.  (SBU) More recently, TNC China has taken on more projects 
outside of Yunnan Province.  In addition to the Yangtze River 
projects, TNC China is working with the provincial governments 
of Guangxi and Sichuan. At the request of the Poverty 
Alleviation Office of the State Council (which supports the work 
of TNC in the Deqin Prefecture project), TNC has undertaken a 
similar project at Dayaoshan, Guangxi.  The State Council 
Poverty Alleviation Office, TNC, and Guangxi authorities have 
signed an MOU but the project has not yet begun. TNC China's 
Kunming Office is also working together with the Sichuan 
provincial government on its biodiversity action plan. 
 
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More Information:  See TNC China Websites 
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¶12. (U)  More information on these projects is available on the 
TNC China's English and Chinese language websites. The Chinese 
language page is more current and much more detailed. 
-- TNC China in English --- 
http://www.nature.org/wherewework/asiapacific /China 
-- TNC China in Chinese ---      For a 
useful Google machine translation of the Chinese language page, 
go to  
HILL