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Viewing cable 09CHENGDU214, U.S. FIRM PLAYS CHONGQING CONNECTIONS AGAINST CENTRAL

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Reference ID Created Released Classification Origin
09CHENGDU214 2009-09-30 11:05 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Chengdu
VZCZCXRO7845
RR RUEHGH RUEHVC
DE RUEHCN #0214/01 2731105
ZNR UUUUU ZZH
R 301105Z SEP 09
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 3437
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHCN/AMCONSUL CHENGDU 4129
UNCLAS SECTION 01 OF 02 CHENGDU 000214 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EIND EINV ELTN ETRD PGOV CH
SUBJECT: U.S. FIRM PLAYS CHONGQING CONNECTIONS AGAINST CENTRAL 
GOVERNMENT 
 
CHENGDU 00000214  001.2 OF 002 
 
 
1. (U) This cable contains sensitive but unclassified 
information - not for distribution on the Internet. 
 
2. (SBU) Summary: TY Lin International China (TYLI China), a 
U.S. bridge and transportation consulting firm, has used its 
position of being headquartered in Chongqing to great advantage, 
using its close relations with the municipal government to 
secure help in dealing with the central government and bringing 
all of the firm's China offices under the technical licenses of 
the Chongqing office to overcome extremely high bureaucratic 
hurdles for approval in other provinces, they told us.  In 
addition to several current Class A licenses, the firm hopes to 
secure a license for rail projects, but participation in rail 
and urban planning projects is limited by the government due to 
"security" concerns.  End Summary. 
 
3. (U) Consul General met September 22 with Chwen Siripocanont, 
Senior Vice President of U.S.-based international bridge and 
transportation consulting firm TY Lin International at the 
company's China headquarters in Chongqing.  Originally 
established in 1954 in San Francisco by a Chinese-American, TY 
Lin International Chongqing was established in 1994 and focuses 
on urban transportation infrastructure, including bridge, 
roadway, and rail transit projects.  In 2009, TY Lin's offices 
in Shanghai, Shenyang and Tianjin were unified under the 
Chongqing office's licenses, forming TYLI China.  The company 
now has over 300 professionals, 200 of whom are based in 
Chongqing. 
 
Chongqing Relations Help with Central Government 
--------------------------------------------- --- 
 
4. (SBU) Siripocanont, who is a naturalized U.S. citizen from 
Taiwan, said that most other design firms have their 
headquarters in Shanghai, so that Chongqing's Municipal 
Government appreciates TYLI China's early choice of the city for 
its home.  TYLI China's good relationship with Chongqing has 
resulted in a preferential income tax of 15 percent compared to 
the 25 percent national average.  TYLI China has also been able 
to use these close relations to influence the central 
government.  Explaining that foreign firms need central 
government approval to use the word "China" in their name, 
Siripocanont said that when TYLI China applied in Beijing for 
such approval, the Chongqing government provided essential 
assistance.  The firm also plans to use its close relationship 
with the Chongqing government to attempt to secure a license for 
rail planning. 
 
Using Chongqing Licenses to Cover Other Offices 
--------------------------------------------- -- 
 
5. (SBU) TYLI China had a distinct advantage over other firms 
attempting to get approval to do bridge and transportation 
design work in China owing to the fact that TYLI Chongqing was 
able to secure licenses in 1994 when the door to this industry 
in China was briefly open, Siripocanont explained.  To outside 
observers, the door now appears wide open, but in fact the steps 
required to obtain licenses are very onerous and so TYLI China's 
other offices were not able to get licenses from other 
provincial governments.  When the firm decided to expand, it was 
able to consolidate other offices under the Chongqing office's 
licenses.  (Note and Comment: China's WTO commitment for the 
construction industry was to allow wholly foreign-owned 
enterprises to operate with few restrictions within three years 
of accession.  The letter of the commitment appears to have been 
met, though it is appears that the spirit of it is not if 
China-experienced firms like TYLI are having to resort to 
organizational acrobatics and leveraging local "guanxi" 
(relationships) in order to obtain the needed licenses.  End 
Note and Comment.) 
 
TYLI China's Unique Position in Western China 
--------------------------------------------- 
 
6. (SBU) TYLI China was one of the first Sino-Foreign joint 
ventures approved by the Ministry of Construction and the 
Ministry of Foreign Trade and Economic Cooperation to receive 
Class A approval for engineering consulting, municipal planning, 
and urban planning services (though not general urban planning), 
as well as having recently been awarded Class A status for 
environmental design.  Most foreign design companies operating 
in China are only allowed to do master planning and 
consultation, but not design work, Siripocanont said.  TYLI 
China is the only foreign design firm in western China which has 
government licenses to do planning, consultation, and design 
work. 
 
Limited Urban Planning and Rail Due to "Security" 
--------------------------------------------- ---- 
 
7. (SBU) TYLI China is not, however, allowed to do general urban 
 
CHENGDU 00000214  002.2 OF 002 
 
 
planning, as this is considered too sensitive, Siripocanont 
said.  Foreign firms are only allowed to do Class B urban 
planning, though when the government is ready to refine master 
urban plans that have been conducted by local firms, TYLI China 
can then get involved due to its Class A engineering license. 
 
8. (SBU) Nor is the firm able to secure a license for rail 
planning, as rail and airports are considered "security" issues 
in China, she continued.  The company attempted to get involved 
in traffic management work with the Public Security Bureau's 
Traffic Management Department, but they were unwilling to 
cooperate as plans for an Intelligent Transportation System 
(ITS) were deemed too sensitive due to the need for an extensive 
system of cameras and closed-circuit television.  TYLI China 
opted instead to enter into a joint venture with the Chongqing 
Rail Design Institute (TYLI China taking a 25 percent stake), 
but because TYLI China has no rail license they cannot do any 
work beyond Chongqing without forming additional joint ventures 
in other provinces. 
BROWN