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Viewing cable 06GUANGZHOU11065, Short March: Jaunt Through Jieyang -- Poor But

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Reference ID Created Released Classification Origin
06GUANGZHOU11065 2006-04-11 03:51 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Guangzhou
VZCZCXRO0128
RR RUEHAG RUEHCN RUEHDF RUEHGH RUEHIK RUEHLZ
DE RUEHGZ #1065/01 1020355
ZNR UUUUU ZZH
R 110351Z APR 06 ZDK CTG RUEHTC 6815 1011214
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 4454
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHEHNSC/NSC WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 02 GUANGZHOU 011065 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM, EAP/PD 
STATE PASS USTR 
USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV ECIN ELAB CH
SUBJECT: Short March:  Jaunt Through Jieyang -- Poor But 
 
Refreshingly Honest 
 
Ref:  Guangzhou 11043 and previous 
 
GUANGZHOU 00011065  001.2 OF 002 
 
 
(U) This document is sensitive but unclassified.  Please 
protect accordingly.  Not for release outside u.s. 
government channels.  Not for internet publication. 
 
1. (SBU) Summary:  One of the oldest and most densely 
populated municipalities in the province, Jieyang in 
eastern Guangdong has not been nearly as successful as its 
neighbors in economic development.  Local officials 
admitted that they might not be up to the challenge of 
overcoming numerous problems the municipality faces, 
including poor infrastructure, business environment 
weaknesses, and the lack of quality human capital.  End 
Summary 
 
"Two Thousand Years Old" 
------------------------ 
2.  (U) In Jieyang, the next stop in Consulate Guangzhou's 
"short march" to the "Chao-Shan" region of eastern 
Guangdong (reftel), Vice Mayor Wu Zili extolled the long 
history of the city.  It was founded in 214 B.C. as a 
garrison camp by Qin Shihuang, the first Emperor of China, 
and named after the Jieyang Ridge, one of the five ancient 
ridges in China.  This makes the city much older than its 
much better known neighbors, Shantou to its southeast and 
Chaozhou to its northeast. 
 
3.  (SBU) Jieyang is one of the most populous 
municipalities in northeastern Guangdong, with a population 
of over 6 million crowded in an area of 5,240 square 
kilometers.  The total GDP for 2004 of Jieyang was RMB 42.1 
billion (US$ 5.3 billion), and its chief exports are 
textiles, shoes, and plastic consumer products with primary 
export markets being Hong Kong, Macau, Japan and the United 
States, and Wu encouraged American enterprises to come look 
at the business environment in the city. 
 
Why Jieyang? 
------------ 
4.  (SBU) If American enterprises did come to Jieyang, they 
might be turned off by what they hear.  In a meeting 
presided over by Deputy Secretary General Lin Junsheng, 
Development and Reform Bureau (DRB) Deputy Director Chen 
Fanghao presented easily the most uninspiring and least 
informative presentation that Congenoffs had ever heard, 
throwing in every concept, slogan, and buzzword in the 11th 
five year plan playbook.  When we asked what specific 
projects Jieyang had in mind to implement its five year 
plan, Economic and Trade Bureau Deputy Director Xu Ronghe 
responded for Chen, saying that even though Jieyang has a 
number of largely small and medium sized enterprises and a 
few ideas like creating some special experimental 
development areas to attract industry, prospects are not 
all that bright. 
 
Orthodox Thinking Does Not Make Money 
------------------------------------- 
5. (SBU) "We have too many people, and too little land," 
said Xu, and Jieyang people would rather leave than to eke 
out a living in this environment.  Moreover, previous 
attempts at economic development following orthodox 
economic planning have not been successful.  The city tried 
development through heavy industry, but the large capital 
costs needed to create heavy industry from scratch was not 
economically viable due to the poor infrastructure in the 
region and the lack of natural resources, Chen said. 
Recent attempts focused on attracting foreign investment 
have been largely unsuccessful due to the higher labor, 
transport, and materials cost in the area.  The city has 
largely failed to attract foreign investors, losing to 
other cities with lower costs, superior infrastructure, a 
more skilled workforce, or a combination of the three. 
 
Trying Again To Build Economic Development 
------------------------------------------- 
6.  (SBU) To be sure, there are some specific projects in 
train, including a new regional airport that will serve 
Shantou, Jieyang and Chaozhou, a new highway through 
 
GUANGZHOU 00011065  002.2 OF 002 
 
 
Jieyang, a new port facility that will be able to handle 
5000-ton cargo ships, and improved power transmission and 
telecommunication facilities.  The government is hoping to 
attract tourism, high technology, and investment from the 
large overseas community of more than three million people 
who are originally from Jieyang and who reside in Taiwan, 
Hong Kong, Macau, Southeast Asia, Europe, and Canada.  Some 
Jieyang returnees have helped create some 1300 small and 
and medium enterprises that are key contributors to the 
local economy. 
 
Brain Drain 
----------- 
7.  (SBU) Even so, the flow of people and talent seems to 
be mostly out.  A large number of students are admitted to 
prestige universities domestically and abroad, particularly 
the United States, but less than a tenth of these college 
graduates return home to Jieyang.  Most opt to stay 
overseas or work elsewhere in China, such as Guangzhou, 
Beijing, or Shanghai.  The resulting drain of educated 
citizens from Jieyang has significantly and negatively 
impacted the municipality's economic development. 
 
Innovation and IPR 
------------------ 
8.  (SBU) IPR Bureau Director Zhuang Jiling provided a 
briefing on Jieyang's IPR situation that rivaled DRB Deputy 
Director Chen's in its low degree of useful information, 
providing no information on the numbers or types of 
enforcement activities and not knowing much about the role 
of local business associations.  To be fair, we have heard 
very few complaints from U.S. businesses about the IPR 
situation in Jieyang.  Perhaps this is because of the 
relatively low level of economic activity in the place or 
perhaps that counterfeit products are manufactured locally 
but not distributed outside. 
 
Comment: What Are We Doing Wrong? 
--------------------------------- 
9.  (SBU) Local officials were refreshingly forthcoming 
about their analysis of their situation.  They said they 
were unable to attract industries since the cost of 
production in their city was higher than other cities in 
the area.  They also admitted that past attempts at 
economic development largely failed at creating sustainable 
growth.  Their solution, however, was to delineate the same 
unimaginative plans as other cities: improve 
infrastructure, attract high tech industries, and promote 
tourism without having more of a plan to achieve those 
goals other than to hope overseas Chinese with historical 
ties to Jieyang will fill the investment vacuum. 
But handicapped with its denser population, less skilled 
workforce, and unclear planning, Jieyang's prospects do not 
look particularly rosy. 
 
10.  (SBU) One would think that a city with a history of 
two thousand years might have some distinct cultural 
sights, and Jieyang officials chose to show us the city's 
old Confucian temple, which dates back to the Ming Dynasty. 
Architecturally and aesthetically interesting though it may 
be, the temple is not presented very well although its 
wooden Confucian figurines were protected during the 
Cultural Revolution, perhaps because Zhou Enlai was holed 
up in the temple for a week in the late 1920s amidst the 
turmoil increased between the Chinese Communist Party and 
the Kuomintang not to mention the local warlords (there is 
a prominent Zhou museum located on the temple grounds). 
This lack of vigor in historical and cultural preservation 
not to mention economic development contrasts sharply with 
that found in Chaozhou, the next stop in Consulate 
Guangzhou's "short march" to eastern Guangdong. 
 
Dong