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RHEHAAA/NSC WASHINGTON DC
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UNCLAS SECTION 01 OF 02 SHANGHAI 000430 
 
SIPDIS 
 
NSC (WINTER, LOI), COMMERCE (JIM PRUITT), TREASURY (AMB. HOLMER, OASIA-CUSHMAN) 
STATE EAP FOR A/S HILL, PDAS DAVIES 
EAP/CM FOR SHEAR AND THORNTON, EAP/PD FOR STOLTZ, GALT AND EMMONS 
R FOR GLASSMAN, ECA FOR A/S AMERI, DAS ROMANOWSKI, KORYCKI, OGUL 
L/ETHICS FOR BROOKS 
H FOR MCMANUS 
 
E.O. 12958: N/A 
TAGS: CH KPAO BEXP SCUL ETRD PREL
SUBJECT: (SBU) GRIM OUTLOOK FOR EXPO PARTICIPATION 
 
REF: Shanghai 391 
 
From Shanghai CG Camp and Beijing Charge Piccuta 
 
¶1. (SBU) Summary:  Prospects for an American national pavilion 
at the Shanghai World Expo 2010 look increasingly grim.  The 
private sector fundraising team reported on Sept. 29 that the 
initial $500,000 of USA Pavilion seed money is exhausted with as 
yet no new money raised to pay for the pavilion.  Consulate 
General Shanghai faces delivering this extremely unwelcome news 
to Chinese authorities next week after the Chinese national 
holiday period and seeks guidance on how to approach the issue. 
We anticipate a strongly negative impact on the U.S. image in 
China and in the wider EAP region.  End summary. 
 
--Expo background-- 
 
¶2. (U) More than 175 countries have signed participation 
agreements for the Shanghai World Expo 2010, viewed by the 
Chinese government as a companion piece to the 2008 Beijing 
Olympics.  Slated to be the largest in history, the Expo is 
expected to draw 60 million Chinese visitors and another 10 
million international visitors during its May-October run. 
Billboards, exhibits, media and massive infrastructure 
construction in Shanghai are focused on this event, now less 
than 600 days away.  A prime location next to a new subway stop 
has been reserved for us. 
 
 ¶3.  (SBU) Post learned Sept. 29 that the private-sector USA 
Pavilion leadership team of Nick Winslow and Ellen Eliasoph was 
preparing to close down their fundraising effort due to 
exhausted cash resources and a resulting inability to fund 
essential work required to meet technical deadlines related to 
soils testing and construction planning.  [Note: Most 
international participants are preparing to break ground at 
their pavilion sites in January or February 2009, with initial 
planning, design, contracting, and soils testing already 
underway.]  According to Winslow, companies such as Dell, 
Disney, Pepsi and Wal-Mart have shown interest in supporting the 
pavilion, but their internal review and decision timetables 
can't be accelerated to meet the Pavilion team's desperate 
cash-flow needs. 
 
¶4.  (SBU)  Even quick, positive decisions from Dell and others 
currently on the fence would not achieve the $82 million 
fundraising goal.  The U.S. business community overall is not 
enthusiastic about a "national" pavilion that must be 100% 
funded by the private sector.  Senior consulate officers at an 
Amcham Shanghai-sponsored breakfast nearly a year ago were told 
that "if you (the USG) really consider this important, then you 
should throw in some money, too.  Then a lot of us would see 
that as a signal of real commitment and come along with you." 
 
--Delivering the message-- 
 
¶5. (SBU) With Chinese government offices now closed for a week 
in celebration of the 59th anniversary of the founding of the 
PRC, the Consulate intends to wait until the week of Oct. 6 to 
notify authorities that the U.S. will not have a national 
pavilion at the Shanghai World Expo.   The newly arrived Consul 
General is scheduled to pay an introductory call on the Shanghai 
Expo Bureau and tour the expo site on Oct. 10.   Every Chinese 
government official she has met so far has stressed the central 
importance of a U.S. pavilion.  All stated with confidence that, 
in the end, the U.S. would be at the Expo, in the prime spot 
reserved for us.  None can imagine a World Expo without U.S. 
participation. 
 
¶6. (SBU) Pending guidance by Washington we plan to say that the 
USA Pavilion fundraising team has "suspended operations", but we 
have little to say if and when asked about next steps. 
 
--Possible consequences-- 
 
¶7. (SBU)  If we throw in the towel, the consequences are likely 
to be extremely widespread: 
- The U.S. absence at the largest World Expo in history, in the 
biggest country in the world, will be glaring.   Our 
non-participation will be seen as a sign of declining economic 
power and influence in the Asia Pacific and the world. 
-In January the U.S. and China will commemorate the 30th 
 
SHANGHAI 00000430  002 OF 002 
 
 
anniversary of the establishment of full diplomatic relations; 
launching a USA pavilion would cap the celebrations; explaining 
why we will not participate in the Expo will kill the champagne 
bubbles. 
- Chinese authorities tout the U.S. pavilion as one of the 
biggest draws of the Expo, which is why they have provided a 
prime spot.  We will miss a golden public diplomacy opportunity 
to demonstrate the dynamism of American life to an estimated 70 
million visitors. 
 - Both Chinese leaders and the public will interpret our 
absence as motivated by political and economic factors.  They 
will conclude that we do not consider the Expo important enough 
to ensure a presence at the Expo and that our absence is due to 
our "failed" economic system.   If the overall relationship in 
2010 is poor for any reason, state-controlled media may claim 
that the U.S. resents China's rising status in the world and 
wants to make China lose face. 
-China will not accept that we plan to sit on the bench. We and 
the next administration will be pressed to continue fundraising 
with U.S. companies, to allow Chinese companies to support the 
USA pavilion, and to find a way to obtain USG government funding. 
 -Although not eager to bear the full cost of the U.S. Pavilion 
if the USG won't pony up, American businesses are nevertheless 
worried about possible repercussions.   At a minimum, they 
believe large orders could shift to countries that are 
participating.  Some fear that U.S. businesses could face the 
kind of demonstrations and boycotts the French experienced 
during and after the Olympics, especially if other adverse 
factors come into play. 
-As we search for property suitable for a new Consulate, 
municipal officials who are considering using land at the Expo 
site as a future diplomatic enclave are not likely to put our 
needs at the top of their list. 
 
¶8.  (SBU) Comment:  World Expos often make headlines only in the 
host country's region.  This one, however, is being touted as 
China's next big role on the world stage after the Olympics.  On 
the plus side, a U.S. national pavilion offers an outstanding 
transformational diplomacy opportunity to project a positive 
image of America both to the 70 million visitors to the Expo and 
to the wider Chinese public.   The scale of this Expo guarantees 
it will be noticed around the world.   On the down side, 
countries in East Asia will interpret the U.S. absence as a 
symbol of America giving up status and influence in the region 
to a rising China, which is working hard to increase its "soft 
power" attractiveness.  The damage to the U.S. public image will 
be global. 
Camp