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Viewing cable 09CHENGDU171, YUNNAN OFFICIALS ON EVOLVING ECONOMY, ALTERNATIVE ENERGY,

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Reference ID Created Released Classification Origin
09CHENGDU171 2009-08-27 03:19 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Chengdu
VZCZCXRO2046
RR RUEHGH RUEHVC
DE RUEHCN #0171/01 2390319
ZNR UUUUU ZZH
R 270319Z AUG 09
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 3379
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 4055
UNCLAS SECTION 01 OF 02 CHENGDU 000171 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO PEACE CORPS 
STATE FOR EAP/CM, EAP/MLS, DRL, EEB, AND OES 
 
E.O. 12958: N/A 
TAGS: EINV ETRD SENV PREL PHUM CH
SUBJECT: YUNNAN OFFICIALS ON EVOLVING ECONOMY, ALTERNATIVE ENERGY, 
REGIONAL INTEGRATION, RELIGIOUS FREEDOM, PEACE CORPS 
 
REF: A. A) 09 CHENGDU 000069 
     B. B) 07 CHENGDU 000274 AND PREVIOUS 
 
CHENGDU 00000171  001.2 OF 002 
 
 
1. (U) This cable contains sensitive but unclassified 
information - not for distribution on the Internet. 
 
2. (SBU) Summary: Yunnan Province lags behind other provinces in 
economic development, though its rich resources offer great 
potential.  Its economy is slowly shifting from traditional 
sectors such as tobacco, rubber, and metals to new industries 
such as tourism and alternative energies.  Yunnan's two biggest 
trading partners were Myanmar and Vietnam; trade fell by 45.6 
percent in the first half of 2009; foreign investment in 2008 
grew by 40 percent from a low base.  China is deepening economic 
integration with its Southeast Asian neighbors, in part through 
major investments in transportation infrastructure.  Kunming's 
Vice Mayor voiced surprisingly strong support for religious 
freedom, saying the religiously-minded are less likely to be 
criminals.  Officials reacted warmly to the idea of possible 
Peace Corps expansion into Yunnan.  Consul General also did 
advocacy on behalf of U.S. firms in water treatment and film 
industries.  End Summary. 
 
Yunnan Officials Meet CG in Kunming 
----------------------------------- 
 
3. (SBU) During an August 11-13 trip to Kunming in Yunnan 
Province, Consul General (accompanied by PolEcon Officer and 
LES) met with Yunnan Province Vice Governor Gu Zhaoxi, Yunnan 
Province Foreign Affairs Office Director Zhou Hong, Kunming 
Party Secretary Qiu He, Kunming Vice Mayor and Director of the 
Kunming Public Security Bureau Du Ming, and Chairman of the 
Yunnan China Commission for the Promotion of International Trade 
(CCPIT).  (CG and ConGen staff subsequently traveled to Diqing 
Tibetan Autonomous Prefecture in northwest Yunnan, reported 
septel).  The following summarizes officials' views as expressed 
to the CG except where specifically attributed. 
 
Yunnan Lagging in Economic Development 
-------------------------------------- 
 
4. (U) Yunnan's economic development lags behind many other 
provinces, partially due its many reserve areas in which 
development is restricted.  (Yunnan's tall mountains and 
frequent natural disasters were also cited as reasons for its 
lagging growth.)  Nonetheless, it has its own advantages: 
 
-- Tourism is one of Yunnan's top industries, ranked sixth among 
Chinese provinces, with the province having received over 20 
million visitors last year (four million of them foreign). 
 
-- Yunnan accounts for 28 percent of China's tobacco output and 
has the country's largest cigarette plant. 
 
-- Yunnan is China's largest rubber producer and is also 
well-known for its non-ferrous metal resources. 
 
China's Great Western Development Plan has brought significant 
benefits to Yunnan.  In coming decades, inland and western parts 
of China, especially areas bordering with foreign countries, 
will have increasing economic opportunities. 
 
Alternative Energy in Yunnan 
---------------------------- 
 
5. (SBU) Yunnan has great potential for alternative energy 
applications.  Being rich in sunlight, officials are considering 
using solar technology in remote areas.  In addition, Yunnan 
currently has six wind farms in Dali in southern Yunnan, and is 
the second largest producer of sugarcane in China (much of which 
is used to make biofuels), with an annual output of two million 
tons.  The primary sources of electric power in Yunnan, however, 
remain thermal power generation and hydropower.  Officials 
estimate Yunnan has 90,000 megawatts of potential hydroelectric 
power generation due to its six major rivers. 
 
Foreign Trade Down in 2009; Investment Up in 2008 
--------------------------------------------- ---- 
 
6. (U) The total value of Yunnan's foreign trade in the first 
half of this year was USD 2.9 billion, down 45.6 percent from 
the same period last year.  Yunnan's top two trading partners 
are neighbors Myanmar and Vietnam, followed by Indonesia, Japan, 
Australia, and the United States, with foreign trade involving 
India on the upswing. 
 
7. (U) Although foreign investment in Yunnan in 2008 grew by 40 
percent, actual foreign investment totaled only USD 470 million, 
 
CHENGDU 00000171  002.2 OF 002 
 
 
most of which went into tourism, agriculture (flowers), cement 
and building materials, water and wastewater treatment, and 
light industry.  Officials noted that U.S. investment in Yunnan 
is currently quite low. 
 
Send More U.S. Business to Yunnan, Please 
----------------------------------------- 
 
8. (SBU) As the central government increases its focus on 
China's West, there will be increasing opportunities for foreign 
investment, and Yunnan welcomes increased participation by U.S. 
companies.  Yunnan's fixed asset investment for the first half 
of 2009 increased by 49.1 percent over the same period last 
year.  Yunnan needs technology for environmental protection, 
water and wastewater treatment, alternative energy production, 
and mining of non-ferrous metals.  Officials responded warmly to 
CG's specific mention of Western Water Group and their projects 
in Yunnan (reported septel), as well as plans already underway 
by an American filmmaker to produce a Hollywood-backed film 
telling the story of WWII's Flying Tigers, who were based in 
Kunming.  (Note: comments by other Yunnan officials on the 
sidelines of one meeting confirmed the filmmaker's fears that 
Hong Kong producer-director John Woo, who recently announced 
plans to film his own version of the story, was already 
attempting to outmaneuver Hollywood for local officials' 
attention. End Note.) 
 
Strengthening Links and Relations with Southeast Asia 
--------------------------------------------- -------- 
 
9. (SBU) Several officials emphasized the benefits to Yunnan of 
China's participation in the ASEAN 10 plus 1 structure, arguing 
Yunnan's close relationships with its foreign neighbors helped 
shield it from the effects of the economic crisis.  (As China's 
relationship with ASEAN deepens, Yunnan will benefit further. 
Yunnan maintains strong transportation links with its Southeast 
Asian neighbors, including 14 airports, with another 4-5 
currently under construction, and several bilateral or 
multilateral highway and rail links in varying states of 
completion (Ref A).  In addition, four of Yunnan's major rivers 
flow into bordering countries, some of which provide shipping 
links. 
 
More Churches, Fewer Jails 
-------------------------- 
 
10. (SBU) Of China's 56 ethnic groups, 25 are represented in 
Yunnan.  Officials repeatedly emphasized Yunnan's ethnic and 
religious "harmony."  Yunnan's ethnic groups "moved directly 
from primitive society to socialist society," but get along well 
as historically no one group is stronger than the others, Vice 
Governor Yu said.  Responding to specific questions about 
religious freedom raised by CG, Vice Mayor Du said Kunming has 
begun to pay particular attention to this issue (Ref B), for 
example he instructed the Public Security Bureau to release 
property it held belonging to a Kunming Catholic Church that had 
been seized decades ago.  I would "rather build more churches 
than jails," Du added, citing statistics showing that citizens 
in Kunming who practice a religion have a much lower crime rate 
than those without a religious faith. 
 
Yunnan Officials to Consider Expansion of Peace Corps 
--------------------------------------------- -------- 
 
11. (SBU) Yunnan officials responded warmly to CG's suggestion - 
cleared with Peace Corps in Chengdu - of the potential for Peace 
Corps volunteers to teach English in Yunnan, saying they would 
consider the issue, study the possibilities, and gather more 
information. 
BROWN