VZCZCXRO1190
OO RUEHAST RUEHCN RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
RUEHTRO RUEHVC
DE RUEHBJ #0174/01 0210902
ZNR UUUUU ZZH
O 210902Z JAN 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1948
RHMFIUU/DEPT OF ENERGY WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RUEHC/DEPT OF LABOR WASHDC IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 9177
RUEHIN/AIT TAIPEI 7161
RHMCSUU/FBI WASHINGTON DC
RUEAEPA/HQ EPA WASHDC

UNCLAS SECTION 01 OF 03 BEIJING 000174 
 
STATE FOR EAP/CM, EEB/CBA, EEB/ESC, CA/VO/L/C, CA/P, L, ISN/CB 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: CMGT CVIS OEXC ECON ENRG EINV TRGY KNNP KSCA CH
 
SUBJECT: CHINA: VISA DELAYS SET BACK WESTINGHOUSE PROJECT, THREATEN 
U.S. JOBS 
 
NOT FOR INTERNET DISTRIBUTION 
 
¶1. (SBU) Summary:  Westinghouse's execution of a multi-billion 
dollar contract to build nuclear power units in China -- a source of 
thousands of U.S. jobs -- continues to be hindered by visa 
processing delays, specifically the 9 weeks currently required for 
Visas Mantis Security Advisory Opinion (SAO) reviews of Chinese visa 
applicants affiliated with the project.  Westinghouse estimates that 
the contract, significant enough to attract the personal advocacy of 
former Secretaries Rice, Bodman, and Gutierrez, creates or maintains 
at least 10,000 U.S. jobs in 13 states.  With the Chinese government 
planning to buy 4 to 8 new plants this year, successful 
implementation of the project would multiply the impact.  However, 
Westinghouse executives explained that visa delays due to long and 
often unpredictable wait times for SAO responses not only undermine 
their efforts to meet contractual obligations, but also reduce 
Chinese willingness to present a positive review of Westinghouse to 
other prospective clients.  While recognizing the critical 
importance of the SAO process, they have asked the U.S. government 
to address the length and unpredictability of the processing time. 
End Summary. 
 
Timely Visas Equal Jobs:  Westinghouse Seeks USG Assistance 
--------------------------------------------- 
 
¶2. (SBU) Westinghouse executives Senior Vice President for Customer 
Relations and Sales Jim Fici, Vice President for Nuclear Power 
Plants in China William Poirier and Vice President for Customer 
Relationships and Sales in China Gavin Liu met with the DCM to share 
concerns about visa processing delays that are threatening their USD 
3 billion contract to deliver four Westinghouse AP1000 nuclear units 
in China. 
 
¶3. (SBU) Westinghouse said the contract would result in 5000 direct 
jobs if properly implemented.  These jobs are distributed throughout 
approximately 25 U.S. companies in 13 U.S. states, from Wrentham, 
Massachusetts, and Pittsburg Pennsylvania, to Shenandoah, Texas, and 
Oshkosh, Wisconsin.  According to a 2008 study, each of these 
skilled jobs results in more than one additional job in the region, 
meaning more than 10,000 U.S. jobs could easily be at stake. 
Furthermore, the successful completion of the first AP1000 project 
in China would translate into future business, multiplying the 
impact.  (Comment:  The 5,000 additional jobs only account for those 
at Westinghouse partners involved in the AP1000 project.  This 
calculation does not include jobs that would be generated in the 
general economy through a multiplier effect.) 
 
More than Just Jobs: Industrial Security, Exports 
--------------------------------------------- 
 
¶4. (SBU) Beyond job maintenance and creation of employment 
opportunities, the AP1000 represents a massive export potential from 
the United States to China.  In addition, Westinghouse executives 
noted that if the United States hopes to engage in a "nuclear 
renaissance" as recently suggested by Energy Secretary Chu, the 
United States will need the many suppliers and engineers that the 
AP1000 China project is sustaining. 
 
And Even More on the Table: 4 to 8 New Sales Coming Up 
--------------------------------------------- 
 
¶5. (SBU) According to Embassy contacts, over the next 10 years, 
China is expected to spend about USD 12 billion on nuclear power 
plants each year.  China's National Energy Administration should 
approve the next wave of nuclear power plants -- possibly between 4 
and 8 units -- later this year.  In order for Westinghouse to secure 
these contracts for the AP1000, however, Central Government 
authorities will need to be convinced that the first wave of AP1000 
construction has proceeded smoothly and that the first loop test for 
the AP1000 canned motor pump, scheduled to be held in the United 
States in August this year, has been completed successfully. 
 
Visa Processing Delays Hurt Business and Safety 
--------------------------------------------- 
 
¶6. (SBU) In Westinghouse's view, travel to the United States by 
 
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Chinese citizens involved in the AP1000 project will be critical to 
successfully completing this project and securing future contracts. 
 
¶7. (SBU) Unfortunately, SAO processing for Chinese applicants 
traveling to the United States to support the project currently 
takes Washington clearing partners approximately 9 weeks to 
complete.  Not only does this decrease Chinese executives' 
likelihood of awarding future contracts to U.S. suppliers, but 
visa-related delays have affected contract-specified quality 
assurance and quality inspection activities in the United States 
crucial to the safe installation of AP1000 equipment in China.  In 
Poirier's view, visa delays are having a significant impact on 
Westinghouse's contractual performance.  Visa delays have soured 
relations between key Chinese decision makers and Westinghouse, not 
only weakening Westinghouse's ability to secure future contracts in 
China, but also reducing China's willingness to provide positive 
feedback about the AP1000 project to potential buyers in the United 
States and third countries, Poirier explained. 
 
Where is the Problem? Security Advisory Opinions 
--------------------------------------------- 
 
¶8. (SBU) Because China's nuclear industry officials and technicians 
are involved in a high-tech field, they are subject to special visa 
processing requirements under the Visas Mantis program. 
Washington-based clearing agencies must actively sign off on the 
visa issuance, and the SAO review procedures as currently 
constructed do not contain established time lines for completing 
processing.  In addition, cleared applicants are only eligible for 
single-entry visas, so they must submit a new visa application every 
time they travel. 
 
¶9. (SBU) Westinghouse executives emphasized repeatedly that as a 
high-tech company with significant intellectual property to protect, 
they recognize the need for special procedures to prevent 
unauthorized tech transfer.  They are frustrated, however, by the 
length of time and the unpredictability of the response wait times. 
 
 
¶10. (SBU) The USG has worked closely with Westinghouse to assist 
Chinese officials and engineers that need to travel regularly to the 
United States.  Westinghouse affiliated applicants only have to go 
through the SAO process once a year and are cleared for multiple 
destinations.  However, the amended process has proven 
unsatisfactory, according to Westinghouse: new travelers continue to 
face delays; regular travelers still have to go through the full 
process once a year; and all travelers are only issued three-month 
single entry visas forcing them to reinitiate burdensome Chinese 
Government foreign-visa-application procedures every time they 
travel. 
 
A Concrete Example: Wang Binghua 
-------------------------------- 
 
¶11. (SBU) Poirier cited a recent case involving State Nuclear Power 
Technology Corporation (SNTPC) Chairman Wang Binghua, who threatened 
to cancel an upcoming trip to the United States after being informed 
during his late December 2008 visa interview in Beijing that 
Administrative Processing could take up to 9 weeks.  Wang had been 
scheduled to deliver a speech in mid-February to tout the successes 
of the AP1000 project in China. 
 
¶12. (SBU) Poirier reported that after hearing about this situation, 
Westinghouse's CEO issued a formal apology to Wang, and the 
Westinghouse China office is now working to repair its relationship 
with SNPTC.  Embassy Beijing requested expedited SAO processing for 
Chairman Wang, and his visa was issued on January 12.  Westinghouse 
informed emboffs on January 14 that Chairman Wang had reluctantly 
agreed to travel to the United States in February only after a long 
discussion with executives visiting China from Westinghouse 
headquarters. 
 
Delays the Norm and Rising: 85 Percent Miss or Delay Travel 
--------------------------------------------- 
 
¶13. (SBU) SNPTC's vice president was also forced to postpone travel 
 
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to the United States due to SAO processing delays in October last 
year, making Wang's case the second time that high-level SNPTC 
visitors were held up by SAO bottlenecks in the last six months. 
Westinghouse reports that between August 2007 and January 2009, of 
the 400 applicants who interviewed for visas at least four weeks 
ahead of their scheduled departure dates, only 60 were able to 
depart for the United States on time.  The remaining 340 (85 
percent) did not receive their visas in time to travel to the United 
States and were forced to either cancel or delay their scheduled 
meetings. 
 
Short-term Solution: One-year Multiple Entry Visas 
--------------------------------------------- 
 
¶14. (SBU) Poirier asked that, for the roughly 100 Chinese officials 
and engineers that need to travel very regularly to the United 
States, the United States might consider issuing one-year multiple 
entry visas for these individuals once they have received an SAO 
clearance. 
 
Comment: Time for a Permanent Solution to an Old Problem 
--------------------------------------------- 
 
¶15. (SBU) The U.S. Mission in China processed 29,341 cases involving 
SAOs last fiscal year.  Embassy Beijing shares Westinghouse's 
appreciation for the need for security advisory opinions.  We also 
share their concerns that travel delays have a negative impact on 
U.S. prosperity and national interests.  Visa processing that takes 
9 weeks (on top of the several-week-long wait for an interview 
appointment) presents a major impediment to U.S. businesses, 
universities, and research institutions competing in the global 
marketplace for clients and talent.  All U.S. agencies at post can 
cite experiences in which valued Chinese contacts planning to travel 
to meetings in the United States -- often at the invitation of the 
United States Government -- have been held up by these delays.  We 
understand the Bureaus of International Security and 
Nonproliferation (ISN) and Consular Affairs (CA) have been urging 
interagency clearing partners to resolve SAO backlogs and maintain 
permanent target processing times, and that both bureaus also 
support the issuance of one-year multiple entry visas to 
Mantis-cleared applicants.  We support these efforts and encourage 
the incoming Secretary to advocate strongly for further actions to 
develop a more efficient and appropriately staffed SAO clearing 
process. 
 
PICCUTA