ALENIA SPAZIO SPACE COOPERATION WITH CHINA

S E C R E T ROME 004744

SIPDIS


E.O. 12958: DECL: 10/14/2013
TAGS: CH ETTC IT PARM PREL TSPA EXPORT CONTROLS
SUBJECT: ALENIA SPAZIO SPACE COOPERATION WITH CHINA

REF: A. SECSTATE 283728

B. ROME 2977

Classified By: ECONOMIC MINISTER-COUNSELOR SCOTT KILNER FOR REASONS 1.5
(B) AND (D)


1. (U) This message contains an action request in para 7.


2. (S) Ecmin delivered reftel information October 10 to MFA
Director General for Economic and Financial Cooperation
Giandomenico Magliano, who was accompanied by Diego Ungaro,
Director of the MFA's Office of Defense Industry and
Sensitive Technology Transfers. Ecmin initiated the
discussion by noting the United States' continued concerns
regarding technology transfer to China, particularly in the
space sector, and our preference that Italy not enhance
China's space capabilities. He also made clear that, with
regard to Alenia's potential projects in China, the U.S.
would not approve the export of any U.S. Munitions List
controlled technology to Alenia, nor allow U.S. firms to
assist Alenia.


3. (S) In this context, Ecmin continued, the U.S.
nevertheless appreciated the exchange of information during
bilateral dual-use export control talks in July, and welcomed
the opportunity to glean insights from the GOI on China's
space program. The U.S. would therefore not object to
Alenia's participation in the five projects in question (data
relay satellite; SinoSat II; manned space program;
interactive telecommunications satellite; and navigation
systems),subject to certain conditions or assurances in each
case. Ecmin said the the Embassy did not intend to share
this information with Alenia directly; we would leave that
to the GOI. But we looked forward to status reports on
Alenia's operations in China, and also hoped that a technical
working group could be set up soon.


4. (S) After thanking Ecmin for the positive news, Magliano
said that the GOI would proceed effectively but cautiously,
conveying the appropriate information to Alenia. The U.S.
request for certain assurances in each case seemed reasonable
at first glance, he offered. If it appeared that any of our
conditions would present a fundamental obstacle to developing
a project, Magliano said he would contact us to seek a
mutually-agreeable technical solution. He also agreed to our
request that a technical working group be established to
monitor China's progress in space, which he said was in line
with our July export control discussions. Magliano asked
whether Washington had specific views on whether the proposed
"technical working group to keep the U.S. apprised of Chinese
progress in space" (Ref A, para 3) should be part of the
planned export control talks led by DAS Maggi (Ref B),or
should be a separate body.


5. (S) While acknowledging U.S. concerns regarding China's
participating in the Galileo project, Magliano stressed that
any decisions on Galileo would be made at an EU level.
Ungaro added, however, that Italy had no intention of
expanding Chinese capabilities through cooperation on the
Galileo project. (Ecmin used this turn in the discussion to
warn that failure by the EU to resolve the M-code overlay
issue by the December EU Transport Council meeting, when
technical specifications are be determined, could result in a
significant transatlantic dispute just as Italy is concluding
its EU presidency.)


6. (S) A discussion then ensued regarding whether future
bilateral talks on export controls -- either generally or
more specifically focused on China's space program -- should
involve company experts. On this issue, Magliano and Ungaro
appeared someone divided. Ungaro suggested that
government-to-government talks could help separate the issue
of export control security needs from commercial interests.
Magliano, in contrast, thought that discussions could only be
sufficiently detailed if they included company officials in
some fashion, as was the case in July discussions in Rome
(Ref B). Ecmin replied that, from his perspective, the July
meetings had proved to be a very successful format, allowing
for government-only exchanges but also incorporating
indispensible Alenia expertise at the appropriate points.


7. (S) Action requested: Embassy greatly appreciates
Washington agencies' thorough and timely reply on Alenia's
proposed China projects, allowing us to fulfill commitments
made during the July export control discussions in Rome. We
would welcome any further Washington views on the format for
future discussions: specifically, should future technical

talks on Chinese progress in space be folded into the more
general export control discussions planned? And should
participation of company experts be included in such
discussion, either on China or more generally?
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2003ROME04744 - Classification: SECRET