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RR RUEHCN RUEHGH
DE RUEHGH #0149/01 0920842
ZNR UUUUU ZZH
R 020842Z APR 09
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7790
INFO RUEHBJ/AMEMBASSY BEIJING 2655
RUEHCN/AMCONSUL CHENGDU 1869
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHGZ/AMCONSUL GUANGZHOU 0325
RUEHHK/AMCONSUL HONG KONG 2037
RHEHAAA/NSC WASHINGTON DC
RUEHSH/AMCONSUL SHENYANG 1860
RUEHIN/AIT TAIPEI 1657
RUCPDOC/USDOC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 8429

UNCLAS SECTION 01 OF 03 SHANGHAI 000149 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/CM, ECA, OES 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH 
DOC FOR ITA/MAC - DAS KASOFF, MELCHER, SZYMANSKI, COUCH, LEHRMAN 
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD ELAB SCUL SENV CH
SUBJECT: CHANGZHOU EMBRACES CLOSER U.S. TIES, ENJOYS HONEYMOON WITH 
INVESTORS DESPITE DOWNTURN 
 
REF: 07 SHANGHAI 61 
 
(U) Sensitive but unclassified.  Not for dissemination outside 
USG channels; not for Internet distribution. 
 
Summary 
------- 
 
¶1.  (SBU) A key Yangtze River Delta (YRD) city located roughly 
midway between Shanghai and Nanjing, Changzhou aggressively woos 
foreign investors, and city officials often travel to the United 
States and Europe to expand commercial ties.  Responding to 
repeated invitations from energetic city officials, the Consul 
General (CG) visited Changzhou, Jiangsu Province on March 31, 
taking advantage of the city's on-going efforts to court U.S. 
officials and investors (reftel).  The CG met with Changzhou's 
Party Secretary and Vice Mayor, as well as visited a U.S. joint 
venture railway car investment, university campus, waste water 
treatment plant, urban planning hall, and the bus rapid transit 
(BRT) system.  Changzhou aims to beat out local competition by 
offering one of the best investment environments in the YRD. 
End Summary. 
 
Something Old: Changzhou's Going Out Strategy 
--------------------------------------------- 
 
¶2. (SBU) Changzhou Party Secretary Fan Yanqing thanked the CG 
during a March 31 meeting for continuing to promote a strong 
relationship between Changzhou and the United States, which 
Changzhou has enjoyed for the past several years (reftel).  Fan 
argued that the global economic crisis and China's economic 
downturn provide greater incentive for Changzhou to restructure 
its economy while further promoting "opening up" by encouraging 
both inward and outward investment.  With a total population of 
approximately 5 million, including 3.5 million residents and 1.5 
million migrant workers, Changzhou now boasts 57,000 private 
firms, including 3000 foreign invested enterprises (FIEs) in 
sectors ranging from equipment manufacturing to agricultural 
processing to textiles.  Vice Mayor Han Jiayu told the CG that 
he recently returned from an investment promotion trip to 
Germany and France, and he will travel to the United States in 
May to meet company representatives and government officials in 
Chicago, Illinois and Jackson, Mississippi. 
 
¶3. (SBU) Party Secretary Fan highlighted the CSR Qishuyan 
Locomotive Company, a General Electric (GE) joint venture 
partner, as a positive example of Changzhou's long-standing 
commercial cooperation with U.S. firms.  The Changzhou Municipal 
Government hopes the on-going partnership with GE will help 
upgrade the city's management methods and technology base, Fan 
said.  During a visit to the CSR Qishuyan factory, General 
Manager Wang Hongnian told the CG that more than 200 CSR 
Qishuyan employees have participated in training programs at 
GE's facility in Erie, Pennsylvania.  The company hopes its good 
relations with GE will help introduce more efficient 
transportation technologies into China, which are likely to be 
employed as part of the Central Government's stimulus package, 
Wang said.  CSR Qishuyan's reputation helps attract graduates 
from some of China's best engineering universities, including 
those that emphasize transportation infrastructure, such as 
Jiaotong University in Beijing and Shanghai Jiaotong University, 
he added. 
 
Something New: Education and the Environment 
-------------------------------------------- 
 
¶4. (SBU) Seeking to consolidate Changzhou's scientific knowledge 
base and develop homegrown talent, officials from Jiangsu 
Polytechnic University and five vocational colleges, in 
cooperation with the city government, established the Changzhou 
Science and Education Town on the outskirts of the city in 2003. 
 University officials emphasized that they are proud of the 
initiative -- which has attracted the attention of government 
leaders, including a visit from President Hu Jintao in 2005 -- 
and they believe an educational plan that "tailors" graduates to 
fit business needs is a successful model.  According to Hu Peng, 
Vice Director of the Science and Education Town's Administration 
Commission, on a shared campus of 78,000 students, 90 to 95 
 
SHANGHAI 00000149  002 OF 003 
 
 
percent of the schools' graduates find jobs in their fields. 
(Comment: We found it strange, however, that Hu expressed 
optimism for the employment prospects for this year's graduates 
of the Town's Textile and Garments Vocational School given the 
economic downturn and reports of many textile factory closures 
in the YRD.  End Comment.)  The Chinese Academy of Sciences also 
sponsors a Research and Development Center at the Science and 
Education Town, which Hu said is supported by more than 150 
companies and 13 other research institutes, including Tsinghua 
and Peking Universities.  The contributions of the Changzhou 
Science and Education Town were perhaps best summarized, 
however, by a provincial government official who stated in a 
promotional video that the new initiative "has not yet proven" 
its value to Changzhou's future development. 
 
¶5. (SBU) Changzhou's environmental protection efforts also are 
in a nascent stage, but city officials recognize the need to 
improve air and water quality.  When asked what citizens are 
most concerned about, the FAO deputy director instantly replied, 
"the environment."  Changzhou closed 900 small chemical 
factories in the last two years because they did not meet 
environmental standards, Party Secretary Fan said.  Given 
Changzhou's proximity to the Yangtze River, water treatment 
projects are extremely important, Fan added.  The CG later 
visited the Shenshui Jiangbian Wastewater Treatment plant where 
800,000 cubic meters of water are treated per day and recycled 
back into the river.  Officials of SZWG, the Shenzhen-based 
state-owned enterprise (SOE) that manages the project, 
acknowledged, however that Changzhou's water is not yet 100 
percent treated and the wastewater treatment facility does not 
treat the water to the level of being potable.  Construction is 
on-going at Shenshui Jiangbian with only one-third of the 
planned facility complete. 
 
Something Borrowed: The Ubiquitous Urban Planning Hall 
--------------------------------------------- --------- 
 
¶6. (SBU) A quick tour through Changzhou's urban planning hall 
reflected the big dreams of a city trying to move past its 
shortcomings towards a high-tech future.  Borrowing the urban 
planning hall concept from large metropolises, including 
Shanghai and Beijing, as well as similar-sized cities such as 
its Yangtze River neighbor to the southwest, Jiujiang, Changzhou 
spotlights its rapid development from a city of moderate 
historic and cultural significance to one of the YRD's economic 
and commercial hubs with its four-floor museum.  Changzhou's 
urban planning hall is part of a new city complex that includes 
the high-rise municipal government headquarters, a theater, 
Olympic sports stadium, and municipal museum.  With an eye on 
attracting investors, Foreign Affairs Office Director Shen Yilin 
said the urban planning hall gives house buyers and potential 
investors a better idea of where they might want to buy or build. 
 
Something Blue: Bus Rapid Transit Moving Commuters 
--------------------------------------------- ----- 
 
¶7. (SBU) An additional sign of Changzhou's urban development is 
that the primary north-south thoroughfare is dominated by powder 
blue bus stations -- noticeable markers of the recently launched 
bus rapid transit (BRT) system.  Entering its second year, the 
BRT has improved traffic flow and contributed to better air 
quality, said project consultant (and American citizen) Xu 
Kangming.  Of the 120,000 riders each day, approximately 11 
percent used to be full-time private car drivers, he said. 
Changzhou is one of several cities in China -- including Xiamen, 
Chongqing, Zhengzhou, and Beijing -- using variations of the 
BRT.  The city's powder blue bus stops sport Scania buses with a 
matching blue color scheme that cost RMB 2 million (USD 300,000) 
and adhere to Euro IV emission standards.  To date, there have 
been no reported instances of private cars driving in the BRT 
lanes, which, Xu said, would carry a heavy fine.  Meanwhile, new 
office building and apartment construction in the city has 
gravitated to areas near the BRT's 24 km-long north-south line 
and its three spur lines; an additional east-west line will go 
into operation on May 1. 
 
¶8. (SBU) The Changzhou BRT's first year in operation was 
 
SHANGHAI 00000149  003 OF 003 
 
 
eventful, as a major snowstorm knocked out the city's 
transportation network a few days after the BRT's launch in 
January 2008.  The BRT was the only transportation in-service 
during the storm, offering the new public transit option free 
publicity in its early days, Xu said.  On the downside, in 
October 2008, controversy struck the BRT when an internet 
blogger alleged that city officials had benefited from kickbacks 
related to the system.  Mayor Wang Weicheng posted a three-page 
letter in an on-line forum a few days later, refuting the 
allegations (see septel).  Presently, however, BRT officials are 
focused on the opening of the east-west line in May, said 
Changzhou Transit Group General Manager Cai Jianchen. 
 
Comment: Changzhou Sizing Up the Other Suitors 
--------------------------------------------- - 
 
¶9. (SBU) A key Yangtze River Delta (YRD) city located roughly 
midway between Shanghai and Nanjing, Changzhou aggressively woos 
foreign investors, and officials often travel to the United 
States and Europe to expand commercial ties.  The Consulate 
General has frequent contacts with the city's officialdom at 
events in Shanghai such as the "Changzhou Meets Shanghai" event 
on February 24, 2009.  Armed with a professional and extremely 
articulate Foreign Affairs Office staff and a series of glossy 
promotion materials, Changzhou aims to beat out local 
competition by offering one of the best investment environments 
in the YRD.  City officials recognize that competition with 
neighboring cities is fierce, particularly during an economic 
slowdown.  Our trip to Changzhou indicated that the city's 
economy is still strong, and city officials expressed optimism 
that the future also looks bright.  From a Mercedes pick-up at 
the train station to a fancy lunch and dinner, city officials 
are adept at giving visitors the positive impression of a 
prosperous, progressive, and harmonious city.  End Comment. 
 
Bio Note: Changzhou Party Secretary Fan Yanqing 
--------------------------------------------- -- 
 
¶10. (SBU) Party Secretary Fan Yanqing is a strong proponent of 
active cooperation with the United States, as well as other 
foreign countries, having hosted the "Changzhou Meets Shanghai" 
meeting in February 2009 and having met with previous Consul 
General Jarrett in August 2008.  A native of Wuxi, Changzhou's 
close neighbor on the Yangtze River, the 53-year old graduate of 
Shanghai Jiaotong University held several positions in Wuxi up 
to Vice Mayor and Deputy Party Secretary before moving to 
Changzhou as Mayor in 2001.  Fan, who has been Changzhou's Party 
Secretary since 2003, is energetic and personable, deftly 
handling the CG's questions on a range of issues from 
environmental protection to the city's e-government initiatives. 
 
Bio Note: Changzhou Vice Mayor Han Jiayu 
---------------------------------------- 
 
¶11. (SBU) Vice Mayor Han is one of Changzhou's eight vice 
mayors, and he is primarily responsible for the overseas 
investment and foreign trade portfolio.  He travels frequently 
to Shanghai and hosted a Spring Festival reception for the 
diplomatic corps in January 2009.  Han frequently travels abroad 
to represent the Changzhou Municipal Government and previously 
has met with officials from the U.S.-China Chamber of Commerce, 
State of Virginia, and State of Illinois among other U.S. 
company and government representatives on his travels.  A native 
of Jurong, Jiangsu Province, Han, 44-years-old, joined the 
Communist Party in 1985 and specialized in water conservation, 
serving in several technical capacities first in Jintan County 
and later in Changzhou.  He was named Vice Director of 
Changzhou's Water Resources Bureau in 1996.  In 2001, Han was 
named Secretary of the CCP Jintan County Committee, and he 
became Vice Mayor of Changzhou in 2003. 
CAMP