VZCZCXRO2166
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0896/01 0720105
ZNR UUUUU ZZH
O 120105Z MAR 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5653
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/USDOC WASHDC
RUEHGV/USMISSION GENEVA 2149
RUEHFR/AMEMBASSY PARIS 4290
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 000896 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON ENRG PGOV EINV CH
SUBJECT: INNER MONGOLIA NPC DEPUTIES TO CENTRAL GOVERNMENT:  WE'LL 
DO IT OUR WAY 
 
REF: (A) BEIJING 588 
(B) 06 BEIJING 17937 
 
SUMMARY 
------- 
 
¶1. (SBU) Inner Mongolia Autonomous Region's NPC Deputies met on 
March 7 and stated that they would continue to pursue rapid economic 
growth despite Central Government efforts to cool growth.  Inner 
Mongolia remains focused on the energy sector as its engine for 
growth, and a Petro China official said Inner Mongolia's energy 
sector is increasingly important for China to meet its production 
targets.  A number of foreign journalists attended the delegation 
meeting, indicating the growing level of interest in Inner 
Mongolia's energy sector.  END SUMMARY. 
 
INNER MONGOLIA:  FULL STEAM AHEAD 
--------------------------------- 
 
¶2. (SBU) Inner Mongolia Autonomous Region's Delegation Meeting on 
March 7 focused on continuing a policy of rapid GDP growth as the 
provincial-level entity in Western China seeks to build its economy 
from a low GDP base.  Inner Mongolia's GDP grew by 19 percent in 
2007, which followed GDP growth rates of 19 percent, 21 percent, and 
18 percent in 2004, 2005, and 2006 respectively.  Inner Mongolia's 
GDP growth continues to exceed the national average, which was 11.4 
percent in 2007, despite repeated calls by the Central Government to 
cool down growth and slow fixed asset investment (Ref A). 
 
¶3. (SBU) In Inner Mongolia's case, the State Council already 
reprimanded Inner Mongolia officials on at least one occasion in 
2006 for building an unauthorized power plant in pursuit of economic 
growth (Ref B).  The continued emphasis on GDP growth at the March 7 
meeting was billed by one NPC Deputy as supporting Inner Mongolia's 
transition from "fast and sound development" (you kuai you hao) to 
"sound and fast development" (you hao you kuai), but Inner 
Mongolia's economy still is "not mature," he said. 
 
IT'S ALL ABOUT THE ENERGY SECTOR... 
----------------------------------- 
 
¶4. (SBU) Inner Mongolia's primary fous remains the energy sector as 
evidenced y the first presntation of the Delegation Meeting being 
given by an NPC Deputy who is a representative from Petro China's 
Inner Mongolia office.  The Deputy said Inner Mongolia would 
continue to expand its oil and natural gas sectors, as they are 
important both to Inner Mongolia's development and China's energy 
sector.  If GDP growth exceeds 15 percent as a result, then that is 
fine, the Deputy said. (Note: Inner Mongolia has abundant coal, oil, 
natural gas, and metals reserves.  It is also estimated to have 80% 
of the world's deposits of rare earths.) 
 
¶5. (SBU) Wang Linxiang, a NPC Deputy and CEO of the Erdos Group, the 
"Cashmere Kings of China," walked out of the meeting for a break 20 
minutes after it started.  Wang told Econoff that the meeting was 
"going OK" but he wasn't personally interested because the 
delegation's focus was all about energy. 
 
...AND INFRASTRUCTURE, TOO 
-------------------------- 
 
¶6. (SBU) Inner Mongolia Deputies also emphasized the importance of 
improving infrastructure in the province, which has one of the 
lowest population densities in China.  Inner Mongolia still needs 
development in highways and railways, one deputy said. 
 
FOREIGN JOURNALISTS INTERESTED 
------------------------------ 
 
¶7. (SBU) Signaling the growing importance of Inner Mongolia in 
China's energy sector, several foreign journalists (including 
representatives from Dow Jones and Bloomberg) attended the meeting 
even though there were many other meetings that were open to the 
press at the same time.  A Bloomberg journalist told Econoff that 
she was closely scrutinizing everything Inner Mongolia officials 
said about oil production targets.  Unlike several other delegation 
meetings where there are few journalists, Inner Mongolia deputies 
had to deflect questions from several journalists every time they 
left the meeting room. 
 
COMMENT 
------- 
 
¶8. (SBU) The Inner Mongolian Deputies' flat defiance of the Central 
 
BEIJING 00000896  002 OF 002 
 
 
Government instruction to slow growth highlights the 
political-economic restraints Beijing faces in trying to curb 
overeating, and the fact that deputies were willing to say so in a 
public session may be an indication of the NPC's growing importance 
as a forum for airing dissenting views on the economy. 
 
RANDT