PRC/NEPAL: BEIJING ASSESSING HOW TO ENGAGE WITH

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 013004

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/19/2016
TAGS: PREL PGOV NP CE CH
SUBJECT: PRC/NEPAL: BEIJING ASSESSING HOW TO ENGAGE WITH
NEPAL'S INTERIM GOVERNMENT

REF: A. KATHMANDU 1576


B. KATHMANDU 1563

C. KATHMANDU 1562

D. KATHMANDU 1555

E. KATHMANDU 01398

Classified By: Deputy Chief of Mission David S. Sedney.
Reasons 1.4 (b/d).


1. (C) Summary: The eight-point agreement between the
Seven Party Alliance (SPA) and the Maoists in Nepal
could be a turning point in the peace negotiations
between the two sides, a Chinese MFA official said.
The SPA and the new government are aware that if they
do not solve the Maoist question, the Maoists could
determine their political survival, he stated.
Beijing does not have contact with the Maoists, but it
is currently assessing its next steps given the fluid
nature of the situation. If the Maoists are part of
the political mainstream and a potentially dominant
factor in Nepali politics, then China cannot maintain
an "ostrich policy," keeping its head in the sand,
oblivious to the realities, Huang said. China's
information on the Maoists and its leaders suggests
that Maoist leader Prachanda has evolved over the past
few years and is now part of a growing faction that
advocates ending armed struggle. He said that the
body language and tone of Prachanda and his colleagues
at the recent press conference with SPA suggested they
are extremely confident in their position. End
Summary.

Pace of Talks Surprising--A Question of Political Will
-------------- --------------


2. (C) The eight-point agreement (Ref A) between the
Seven Party Alliance (SPA) and the Maoists could be a
turning point in the peace negotiations between the
two sides and represents a major opportunity for the
two sides to put aside their differences, said MFA
Asian Department Division Director for India, Nepal,
Sri Lanka and Bhutan Huang Xilian. During a June 19
meeting, Huang told poloffs that he was very surprised
at the pace of events in Nepal, noting that after 10
years of fighting the two sides were able to reach the
eight-point agreement after only 10 hours of
negotiations. Huang said that based on the code of
conduct, the four-point agreement and the eight-point
agreement, the two sides have clearly demonstrated
that they have the political will to find a resolution
(reftels).


3. (C) The Maoists have played a decisive role in
Nepal's political development for over a decade, Huang
stated. The Maoists or "people's movement" have
successfully overturned the Nepali parliament several
times and now have overthrown the King. The SPA and
the new government are aware that if they do not solve
the Maoist question, the Maoists could determine their
political survival as well, Huang opined. The true
test of the SPA, however, will be how it reacts to
what it perceives as the Maoists' gaining political
control of the interim government and or the majority
in the constituent elections, Huang stated.

Beijing Assessing How to Engage with Interim
Government
--------------


4. (C) Beijing adheres to a policy of noninterference
in the internal affairs of other countries, Huang
maintained. Regardless who is in power in Nepal,
China will maintain relations with all political
parties. At present, Beijing does not have contact
with the Maoists, but Beijing is assessing how to
proceed given the fluid situation in Nepal. Huang
said that determining China's next step is a very
sensitive issue. At a minimum, China cannot have bad
relations with Nepal because the two countries are
neighbors, he said. If the Maoists are part of the
political mainstream and a potentially dominant factor
in Nepali politics, then China cannot maintain an
"ostrich policy," keeping its head in the sand,
oblivious to the realities, Huang said. The Maoists

BEIJING 00013004 002 OF 002


have periodically expressed interest in establishing
contact with China. As an aside, Huang noted that
China does not call the rebels Maoists, referring to
them as the anti-government movement. China will have
to find a new name for them because they are
apparently no longer anti-government.

China Sees Prachanda as Advocate for Peaceful Change
-------------- --------------


5. (C) China has collected bits and pieces of
information on the group and its leaders over the
years, Huang stated. Beijing's assessment of Maoist
leader Prachanda has evolved. Facing growing
international pressure from anti-terrorism campaigns
and the failure of the Maoist guerillas to take
control of Nepal, Prachanda is, in China's view, part
of a more moderate faction of the Maoists, apparently
becoming an advocate for peaceful change, Huang said.
Prachanda's growing faction endorses an end to armed
struggle. Huang said the test will be if the Maoists
actually give up their arms according to the newly
reached agreements. Huang also contrasted the
performance of Prachanda and his deputy Bhattarai with
the SPA representatives at a press conference
announcing the eight-point agreement, noting that
Prachanda and Bhattarai were very eloquent and
energetic while the SPA representatives were very low
key. Huang said that Prachanda "frankly just
outperformed the SPA." He assessed that this was a
sign that the Maoists are extremely confident in their
position.
RANDT