Reference ID: 06GUANGZHOU14936
Created: 2006-05-21 23:47
Released: 2011-08-30 01:44
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Origin: Consulate Guangzhou
RR RUEHAG RUEHCN RUEHDF RUEHGH RUEHIK RUEHLZ
DE RUEHGZ #4936/01 1412347
ZNR UUUUU ZZH
R 212347Z MAY 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 8261
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 03 GUANGZHOU 014936
STATE FOR EB, R, EAP/CM, EAP/PD, DRL
STATE PASS USTR - STRATFORD, CELICO
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
USPACOM FOR FPA
E.O. 12958: N/A
TAGS: ECON PGOV ETRD EINV CH
SUBJECT: LONG MARCH: QUANZHOU - IT'S HARD TO BEAT XIAMEN
REF: A) Guangzhou 13562 B) Guangzhou 13384 C) Guangzhou
13385 F) Guangzhou 14707 G) Guangzhou 14818 H) Guangzhou 14848
1. (SBU) Summary: Quanzhou, the wealthiest city in Fujian and itself a coastal city in the southern part of the province, strikes a contrast to Xiamen as the city neglects its vast potential as a tourist and economic hub through poor intellectual property rights protection and conservative planning. As the last major stop on the Consulate Guangzhou's long march trip, Vice-Mayor Zeng discussed the city's transformation from agrarian society to a shoe-producing center with help from Taiwanese investment. Well taken care of local religious and historic sites offer hope for the city to expand revenues through tourism. Sadly, unenthusiastic efforts by local officials to secure intellectual property rights (IPR) in a city known to have IPR problems will possibly affect the levels of foreign direct investment in the city. End Summary.
WHAT A DIFFERENCE AN HOUR CAN MAKE
2. (U) Approximately 100 kilometers north of Xiamen along the coast of Fujian province lies Quanzhou. Although the drive was a little more than an hour, the contrast between the two cities was striking. Where Xiamen's outskirts appeared planned with an abundance of parklands and whose major arteries lead one along its well-preserved coastline, Quanzhou is a hodgepodge of decaying and restored housing and factories that belie the city's status as wealthiest in Fujian. Roadways gave no hint that you were still along the coast or that this once proud city was formerly a major port of the Cong and Yuan Dynasties.
3. (U) Quanzhou Vice-Mayor Zeng Huabin stressed that Quanzhou is a progressive city leaving agriculture behind, claiming only 5% of the population remained agrarian. He emphasized that tourism and goods manufacturing were the economic engine of today's Quanzhou and would be the base on which to build the city's future. As an example of Quanzhou's ability, the Vice-Mayor stated factories in the city had manufactured 950 million pairs of shoes in last year alone. He cited heavy investment from Taiwan as being a major factor in driving this change in the city. Vice- Mayor Zeng also proudly announced Quanzhou's sister-city agreement with San Diego and stressed Quanzhou would soon send a delegation to visit its younger sister across the Pacific.
TOURIST POTENTIAL EXISTS
4. (U) Getting past first impressions, a tour of Quanzhou's tourist highlights revealed that the city does have much to market. In addition to a well-preserved city center that has worked with UNESCO to maintain its original appearance, Quanzhou has a treasure of archaeological sites and religious relics in excellent condition. Quanzhou was once the terminus of the Maritime Silk Road and, as such, was home to merchants and sailors from many diverse nations of the Middle East, Europe, and Asia. The long and largely peaceful co-existence of these diverse peoples for almost five centuries left Quanzhou with a varying array of mosques, churches, temples, monuments, and cemeteries. Unfortunately, earthquakes and time have devastated many of these sites, but many pieces connecting to this storied past can still be found.
5. (U) The Quanzhou Museum of Maritime History houses a surprisingly large array of these artifacts covering Islam, Christianity, Hinduism, and the Manichean faith. Gravestones from both Muslim and Christian graves have been salvaged showing scripts in Arabic, Spanish, or English on one side and carved Chinese characters on the other. The amount of Islamic artifacts unearthed is so large that a new Islamic History wing of the museum is about to be opened. The setting and quality of the museum and its displays are on par with any found in China. The city also boasts religious sites such as Lao Jun Rock, an enormous carved statue of the deified founder of Daoism, the Sacred Tombs of
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Islam at Lingshan Hill, still in pristine condition, Qingjing Mosque built in 1009, and the Buddhist Kaiyuan Temple Complex with two giant granite pagodas looking out over the city. It is this depth and variety of religious and cultural history that the city is attempting to exploit as a lure for tourists.
DEVELOPMENT - A PLAN WITHOUT DETAIL
6. (SBU) Quanzhou city officials Mr. Hong Liangquan, Deputy Director of the Economic & Trade Bureau and Director of Quanzhou Office of Rectification and Standardization of Market and Economic Order (MORO), Mr. Xu Qinghai, Deputy Director of the Quanzhou Administration of Industries and Commerce, Ms. Huang Danping, Director of the Quanzhou Intellectual Property Office, and Mr. Zhang Fan, Deputy Director of the Press and Copyright Bureau discussed Quanzhou's 11th five-year development plan and IPR education and enforcement efforts. While development plans in Xiamen were about creating opportunities for the city, Quanzhou's development seems to be driven less by creating opportunities and more by seizing whatever opportunities come the city's way. Quanzhou currently is the richest city in Fujian province by GDP and is primarily a center of textile, shoe, and handicraft manufacturing, due in great part, to Taiwan investors.
7. (SBU) Director Hong read most of the city's 11th Five Year Development Plan, a plan that was long on goals, but short on details about how to get there. One stated goal was to double government revenues by 2010 but this projection relies solely on maintaining the city's current GDP growth rate for the remainder of the decade. Lowering energy consumption per unit of GDP by 10%, modernizing agriculture, developing 100 new enterprises, increasing medical benefits for farmers, restoring the port to its former glory, and better utilizing Quanzhou's local history and cultural resources for tourism were other stated goals (mostly in accord with national directives for the 11/5 plan), but no roadmap was presented. When questioned about what tourist promotion could be done, local officials could only respond with excuses that the city had poor funding, was in a bad location, and could not compete with the wonders of Beijing, Shanghai, and Xian.
INTELLECTUAL PROPERTY RIGHTS -
UNENTHUSIASTICLY MEETING MINIMUM REQUIREMENTS
8. (SBU) Nearly all current investment in Quanzhou comes from Taiwan and overseas Chinese who have roots in the area. It is unclear how much more can be drawn from this well, though many of the Taiwan-invested shoe and apparel companies are also pirating and counterfeiting legitimate goods on the side. Quanzhou is viewed by many U.S. businesses as a major center for counterfeit production. While a few major American companies such as Wal-Mart, Nike, and ADM are invested in enterprises in the city, plans for an ExxonMobil refinery are currently on indefinite hold despite local officials' enthusiasm for the project. Quanzhou's past IPR problems make further investment from American and other foreign firms a shaky assumption at best.
9. (SBU) Quanzhou has three agencies, focused separately on Trademarks, Copyrights, and Patents, under the broad supervision of the Office of Rectification and Standardization of Market Economic Order (MORO) which are assigned to combat IPR violations within the city. The city's IPR plan meets the Chinese State Council and provincial government assignment to implement IPR protection but the emphasis is on promotion of IPR for local companies and on Quanzhou's interagency cooperation. This type of development has become a common focus of many the IPR development efforts of many cities. Much less emphasis appears to be placed on the actual discovery, combating, and prosecuting of IPR violations, especially those involving foreign companies. To illustrate this imbalance, most facts presented by officials were about the numbers of locally- registered trademarks and copyrights and local promotion events. It was only after questioning about criminal
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transfers that officials commented, almost casually, that a case in Quanzhou regarding a local person manufacturing counterfeit products ended with a fine of RMB one million (USD 120,000) and was cited as a national Top 10 case for IPR enforcement by Beijing for the year 2005. What should be a source of pride for the agency was strangely brought up only as an afterthought.
10. (SBU) Overall, the presentations implied, and in many cases outright stated, that Quanzhou lacks interest in IPR enforcement. Key areas of health and safety, such as food and drug patents and complaints of counterfeiting, are under- investigated. Thresholds for criminal transfer and prosecution use the counterfeit product cost rather than the genuine product price for computation of total value, making most cases fall well below the threshold for criminal investigation. Staffing is inadequate in most agencies for investigation of cases, and in some areas such as patent violations; most violations are not acted upon unless a complaint is made by a local association of businesses. Even among local government offices, IPR violations are still found. The county and district governments have still not finished implementing a mandated "No Piracy Program" for software use on government computers, largely due to a lack of funding for new software. While local trademark and copyright registration is high and cases of local company versus local company seem to get government attention, the current environment is still not as welcoming as it should be for foreign enterprises seeking to produce goods in a manufacturing center such as Quanzhou.
With Such Poor Planning,
How Did Quanzhou Get to Be So Wealthy?
11. (SBU) Despite its wealth, Quanzhou contrasts poorly with Xiamen in terms of both detailed planning and implementation of its next five-year plan. The basic building blocks for a prosperous and important city are still there but Quanzhou, despite its wealth, has yet to put together a coherent program for its improvement. Not unique among cities visited during the long march, Quanzhou seems content to be dependent on foreign direct investment, especially from Taiwan, as its primary means of development, without a backup plan. End Comment.
12. (U) Officials visited include:
Zeng Huabin Vice Mayor
Zhuang Zhimin Deputy Secretary General
Hong Liangquan, Deputy Director of Economic & Trade Bureau and Director of Quanzhou Market Order Rectification Office (MORO)
Xu Qinghai, Deputy Director of Quanzhou Administration of Industries and Commerce
Huang Danping Director of Quanzhou Intellectual Property Office
Zhang Fan Deputy Director of Press and Copyright Bureau
Wang Jinding Director, FAO
Ding Feng Deputy Director, FAO
Huang Decong Deputy Section Chief, FAO
Wu Jihuai Vice President, Quanzhou Overseas Chinese University
Liu Bin Director, Executive Office, Quanzhou Overseas Chinese University
Xiang Shimin Director, FAO, Quanzhou Overseas Chinese University