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### Viewing cable 06BEIJING24171, HENAN PROVINCE'S NINE-CITY URBANIZATION PLAN

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BEIJING24171 | 2006-11-30 04:39 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Beijing

`

    VZCZCXRO2080
    PP RUEHCN RUEHGH RUEHVC
    DE RUEHBJ #4171/01 3340439
    ZNR UUUUU ZZH
    P 300439Z NOV 06
    FM AMEMBASSY BEIJING
    TO RUEHC/SECSTATE WASHDC PRIORITY 2549
    INFO RUEHOO/CHINA POSTS COLLECTIVE
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/USDOC WASHDC
    RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
    RUEHC/DEPT OF LABOR WASHDC
    RHEHNSC/NSC WASHDC

` `

    UNCLAS SECTION 01 OF 02 BEIJING 024171

    SIPDIS

    SENSITIVE
    SIPDIS

    USDOC FOR 4420
    STATE PASS CEA FOR BLOCK
    TREASURY FOR OASIA/CUSHMAN
    USDA/ERS FOR LOHMAR, TUAN, SYLVANA LI
    USDOL FOR ILAB
    E.O. 12958:  N/A
    TAGS: ECON EAGR ELAB PGOV SOCI CH
    SUBJECT: HENAN PROVINCE'S NINE-CITY URBANIZATION PLAN

    REF:  BEIJING 2661

    SUMMARY
    -------

    ¶1. (SBU) Provincial and municipal level officials in
    Central China's Henan Province look to rapid urbanization
    to accelerate economic growth and absorb excess rural labor.
    Henan's urbanization plan focuses on nine cities that
    account for 40 percent of the province's population and 60
    percent of its economic output.  Policymakers in Zhengzhou,
    the provincial capital, have designated specific roles for
    each of the cities, and they hope the policy will attract
    more farmers to urban areas.  Local officials in Kaifeng
    are optimistic about economic development, but display
    concern about the long-term impact of rapid urbanization on
    rural stability.  (Note: Zhengzhou is an APP city.  End
    Note.)  END SUMMARY.

    TRAVEL TO HENAN
    ---------------

    ¶2. (SBU) Econoff, Conoff, and Econ Assistant traveled to
    Henan Province, November 6-8.  In Zhengzhou, Emboffs met
    with Provincial officials at the Development and Reform
    Commission and Foreign Affairs Office.  They also visited
    Henan People's Radio, and discussed the government's rural
    policy with faculty at the Henan Agricultural University.
    On November 7, Emboffs traveled to Kaifeng where they met
    with officials at the Municipal Development and Reform
    Commission and Municipal Agriculture and Forestry Bureau.

    HENAN'S RAPID URBANIZATION
    --------------------------

    ¶3. (SBU) Henan Provincial Government officials continue to
    emphasize that the best hope for the province's 70 million
    rural residents is to find work for them in the cities
    (reftel).  With excess rural labor already heading to urban
    areas in search of employment, accelerating industrial
    development is a key objective for the government, said
    Shao Yingnan, Deputy Director of the Foreign Economy
    Department at the Henan Provincial Development and Reform
    Commission.  Shao estimated that as much as 30 percent of
    rural income is derived from part-time work in the cities.
    Henan Province wants to attract investment from more
    private sector companies, including foreign investors, Shao
    said.  Rapid urbanization and industrialization resulted in
    13.9 percent GDP growth during the first nine months of
    2006 compared to the same period the previous year.  (Note:
    Henan's projected GDP growth rate in 2006 is consistent
    with its 14.1 percent growth rate in 2005.  End Note.)

    POLICY FOCUS ON NINE CITIES
    ---------------------------

    ¶4. (SBU) Henan Province's apparent urgency to attract
    private sector investment reflects officials' recognition
    that the land-locked province remains backward compared to
    its coastal neighbors.  The China Daily reported in March
    2006 that Henan Province's urbanization rate, at 30.7
    percent, is significantly lower than the national average
    of 43 percent.  Henan Province's urbanization plan focuses
    on nine cities that currently account for 40 percent of the
    province's population and 60 percent of its economic output.
    The nine cities, Zhengzhou, Kaifeng, Luoyang, Jiyuan,
    Xinxiang, Jiaozuo, Xuchang, Pingdingshan, and Luohe, each
    have specific designated roles.  Provincial government
    officials stated, for example, that Zhengzhou and Luoyang
    will remain the province's industrial bases and financial
    centers, with other cities serving specific roles such as
    Kaifeng as a tourism hub, Jiaozuo as a coal producer, and
    Luohe as a livestock center.  Zhengzhou, the provincial
    capital, also serves as Central China's major
    transportation and logistics hub.

    KAIFENG: OPTIMISTIC ABOUT PROSPECTS...
    --------------------------------------

    ¶5. (SBU) In Kaifeng, a city of 4.87 million residents east
    of Zhengzhou, municipal government officials expressed

    BEIJING 00024171  002 OF 002

    optimism about the Nine Cities plan and Kaifeng's role.
    Kaifeng, one of the "Seven Ancient Capitals of China,"
    attracted 18 million tourists in 2005, and the city also
    emphasized development in its transportation and banking
    sectors during the year, said An Honghai, Director of the
    Kaifeng Development and Reform Commission.  Rural residents
    in Kaifeng still account for approximately 80 percent of
    the municipality's population, but officials at the Kaifeng
    Agriculture and Forestry Bureau said that as in other parts
    of Henan, non-farm income is increasingly important in
    rural areas.  Taken together with agricultural sector
    modernization, wage income from part-time work in the city
    or non-farm work in the countryside contributed to a 14
    percent increase in Kaifeng's rural incomes in 2005, higher
    than the provincial average of 7.5 percent during the year.

    ...BUT WORRIED ABOUT REALITIES
    ------------------------------

    ¶6. (SBU) Rural residents in Kaifeng remain poor, however,
    and per capita rural income is only RMB 2714 (USD 340), An
    stated.  Local officials said that they will continue to
    focus on raising rural incomes and strengthening social
    services such as education and health care.  Officials
    stated that their greatest concern in Kaifeng is the
    growing conflict between rapid industrialization and
    preserving arable land.  They claimed that the local
    government always offers compensation to farmers whose land
    is expropriated for development projects, and the most
    important element of the compensation is providing training
    to farmers who want to work in the city.  Officials at the
    Agriculture and Forestry Bureau said that they remain
    concerned, however, about the long-term impact of rapid
    urbanization and resulting land confiscations on rural
    stability.

    ¶7. (SBU) Conflicts over the use of land are not limited,
    however, to the fringes of urban areas.  In a model village
    development outside Kaifeng, one visibly upset farmer
    shouted to visiting Emboffs that she wanted to tell them
    her story about how she had been prevented from moving to
    the model village.  Local officials would say only that 80
    of 200 families in the village "had the ability to pay" to
    move to units in the model village.

    RANDT

`