VZCZCXRO8887
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4102/01 3040854
ZNR UUUUU ZZH
P 300854Z OCT 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 0696
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 2297
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 004102 
 
SENSITIVE 
SIPDIS 
 
COMMERCE FOR ALBERT HSU 
TREASURY FOR OIA CWINSHIP AND TTYANG 
NSC FOR LOI 
 
E.O. 12958: N/A 
TAGS: ECON EAGR PGOV EFIN SOCI CH
SUBJECT: THE CCP THIRD PLENUM: HOPEFUL BUT NOT HOLDING 
THEIR BREATH IN NINGXIA 
 
REF: A. BEIJING 3933 
     ¶B. BEIJING 4100 
 
¶1. (SBU) SUMMARY:  Contacts from the Ningxia Hui 
Autonomous Region, one of China's poorest regions, 
expressed hope the decisions of the October 9-12 Third 
Plenum of the Chinese Communist Party (CCP) 17th 
Central Committee would translate into concrete 
policies to boost agricultural production, sustainable 
land use, broader rural financial services and higher 
incomes.  They did not expect immediate results, 
however, and continue to wait for further details 
about implementation to emerge.  END SUMMARY. 
 
¶2. (U) Econoff and Econ Specialist visited the Ningxia 
Hui Autonomous Region October 15-17 and met with 
contacts from Ningxia in Beijing on October 20.  The 
Third Plenum of the Chinese Communist Party (CCP) 
17th Central Committee (aka "The Plenum") concluded on 
October 12 with the release of a Communique (ref A), 
followed by the more detailed "Decision on Major 
Issues Concerning the Advancement of Rural Reform and 
Development" (aka "Decision"), which was released to 
the public on October 19 (ref B). 
 
¶3. (SBU) In a meeting with Econoff and Econ Specialist 
on October 15, Huang Yongfeng, General Manager of the 
Ningxia Land Reclamation Company, said he welcomed the 
policy thrust of the Third Plenum Communique because 
it lays out how to proceed on rural reforms.  Huang 
noted that clarifying the system for transferring 
land-use rights from individual farmers to a large 
company such as his would allow his company to further 
expand and increase its production scale.  He also was 
hopeful that land could be more easily consolidated 
into larger scale farming operations.  Huang noted 
that details still need to be worked out, but the 
renewed push to accelerate rural reforms provides 
"additional space" to modernize agriculture.  (Note: 
The Ningxia Land Reclamation Company is a state-owned 
agricultural conglomerate with businesses including 
grain, vegetable and fruit farms, wineries, livestock 
and dairy, and aquaculture.  The company cultivates 
approximately 188,000 hectares of land.  End Note.)  A 
farmer from central Ningxia who spoke with Econoff 
said his family paid close attention to the news 
reports on the Plenum Communique and hoped further 
reforms would "gradually" result. 
 
¶4. (SBU) At the Ningxia Agriculture and Animal 
Husbandry Bureau on October 15, the text of the Plenum 
Communique was streaming on the electronic 
announcement board in the lobby.  The Bureau's Deputy 
Director Zhang Yanping told Econoff his Bureau was 
still studying the Communique, but that he was hopeful 
the renewed push at the Plenum would help increase the 
protection of peasants' interests.  He said he was 
also hopeful the Plenum will result in increased 
fiscal transfers and overall support for agriculture 
and rural communities, as well as the use of 
specialized rural cooperatives (zhuanye hezuoshe) to 
increase the commercialization of agriculture 
production. 
 
¶5. (SBU) A Ningxia Rural Credit Cooperative (RCC) loan 
officer said his RCC does not currently allow rural 
farmers to use land as collateral for loans but that, 
if the necessary legal framework is established 
following the Plenum, the RCC would start doing so. 
(Note:  The Plenum Decision released on October 19 did 
not specifically mention the use of agricultural or 
rural household land as collateral, even though this 
possibility had been discussed in the Chinese media 
during the run-up to the Plenum.  See septel.) 
Representatives from the Ningxia Center for 
Environment and Poverty Alleviation (CEPA), a Chinese 
NGO with micro-finance and grassland management 
projects, said they hope the Plenum will directly 
benefit their work.  Zhang Jian'e, CEPA's Director for 
Micro-finance Projects, said the Plenum may help lay a 
legal framework for implementing microfinance projects 
that is currently lacking.  She explained that 
microfinance projects are often carried out with only 
 
BEIJING 00004102  002 OF 002 
 
 
implicit official approval, making it difficult to 
expand programs beyond an area run by a flexible 
official.  Li Fengyang, CEPA's Director for grassland 
management projects hopes further reforms will make it 
easier for herders to consolidate land into management 
units consistent with sustainable range management 
practices. 
PICCUTA