Identifier
Created
Classification
Origin
06BEIJING16162
2006-08-07 08:07:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

CHINESE TELL BOUCHER STABILITY, SECURITY AND GOOD

Tags:  PREL PGOV XD XK CH 
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C O N F I D E N T I A L SECTION 01 OF 07 BEIJING 016162 

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/07/2026
TAGS: PREL PGOV XD XK CH
SUBJECT: CHINESE TELL BOUCHER STABILITY, SECURITY AND GOOD
NEIGHBORLINESS ARE TOP GOALS

BEIJING 00016162 001.2 OF 007


Classified By: Political Minister Counselor Daniel
Shields. Reasons 1.4 (b/d)

Summary
-------

C O N F I D E N T I A L SECTION 01 OF 07 BEIJING 016162

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/07/2026
TAGS: PREL PGOV XD XK CH
SUBJECT: CHINESE TELL BOUCHER STABILITY, SECURITY AND GOOD
NEIGHBORLINESS ARE TOP GOALS

BEIJING 00016162 001.2 OF 007


Classified By: Political Minister Counselor Daniel
Shields. Reasons 1.4 (b/d)

Summary
--------------


1. (C) Ministry of Foreign Affairs officials,
academics, and oil industry professionals told
Assistant Secretary for South and Central Asian
Affairs Richard A. Boucher during his July 30 ? August
2 visit to China that stability and security are
China's foreign policy goals in the Central and South
Asia. Boucher responded that the best way to achieve
long-term stability is to build democratic
institutions and political openness. Chinese officials
and the Shanghai Cooperation Organization Secretary
General welcomed U.S. efforts to help stabilize the
region and stressed their desire for better
coordination and cooperation with the United States.
Assistant Foreign Minister Li Hui proposed
establishing a United States-China-India trilateral
mechanism to discuss issues of mutual concern.
Boucher and ministry officials noted the usefulness of
the consultations and agreed to convene again in the
future. End Summary.

South and Central Asia Subdialogue with Li Hui
-------------- -


2. (C) Assistant Secretary for South and Central
Asian Affairs Richard A. Boucher and Assistant Foreign
Minister Li Hui held U.S.-China South and Central Asia
sub-dialogue consultations on July 31. Li, focusing
first on Central Asia issues, emphasized that the
United States and China have a common interest in
Central Asian stability and development, arguing that
security is of paramount importance for the Central
Asian nations. The international community must
support Central Asia in the fight against "the three
evils" of extremism, separatism and terrorism with
"strict preventative measures." Li insisted that
democracy is not the pressing issue right now and
outsiders are not in a position to comment on Central
Asian countries' decisions on how best to achieve
stability. Central Asian countries have unique
histories and cultures and will realize the goal of
democracy differently from Europe and the United

States, Li said. Boucher responded that the best way
to achieve long-term stability is to build democratic
institutions and political openness. The U.S. goal is
to ensure that Central Asian nations can act
independently in the international arena rather than
be dominated by the interests of one country or one
set of economic interests. This is why we are
promoting links between Central Asia and South Asia,
Boucher said.

East Turkistan Liberation Organization
--------------


3. (C) Li spoke at length about the East Turkistan
Liberation Organization, which he claimed has close
relations with Al-Qaeda and poses a threat to Central
Asia. He stated that the group has carried out more
than 300 attacks in Xinjiang and more than 100 attacks
outside China, many directed at Chinese diplomats and
private citizens. The East Turkistan Liberation
Organization recently announced its intention to
"sabotage" the 2008 Olympics, according to Li, who
stressed Beijing's disappointment at U.S. action to
put a hold on designation of the group by the Security
Council 1267 Committee. He asked that the United
States lift the hold in light of the "hard evidence"
Beijing has provided. Boucher replied that the United
States has already listed an East Turkistan
organization, the East Turkistan Independence
Movement. However, in the case of the East Turkistan

BEIJING 00016162 002.2 OF 007


Liberation Organization, China's evidence has yet to
be independently confirmed. The United States has
worked with other countries to try to validate
Beijing's evidence but these efforts have been
unsuccessful. The United States is spending
considerable money investigating the organization.
This is an important area that our security services
should continue to discuss, Boucher stated.

Russia's Role in Central Asia
--------------


4. (C) Li said the People's Republic of China does
not seek to dominate Central Asia, believes the region
should be "open and transparent" and opposes
deliberate efforts to create regional division and
confrontation. Russia strongly influences Central
Asia through trade, political, economic, military,
cultural and historical ties, said Li, stressing that
Central Asian nations need Russian political and
security cooperation. China believes Russia is an
important force for stability and security and
respects the significance of Russia's past role in the
region, Li said.

Shanghai Cooperation Organization
--------------


5. (C) Li denied the Shanghai Cooperation
Organization wants to become a "new NATO," arguing
that it has never established any political or
military structures. He rejected reports that member
states need permission to conduct exchanges with non-
member states, arguing instead that the organization
is open, all its members are equal and all have the
full freedom to carry out activities without
restriction. Boucher replied that we welcome the
organization's anti-terrorism efforts and stressed
that U.S. military bases and security agreements in
the region designed to fight terrorism are good for
everyone, including Russia and China. Li said that
China has noted the United States' military and
security cooperation in the region and understands the
need for temporary stationing of troops. Our troop
levels and basing, however, should be "rational and
proportionate," and take into account the concerns of
China and other neighbors.

Kazakhstan, Kyrgyzstan and Tajikistan
--------------


6. (C) Li emphasized that Kazakhstan, a key player in
Central Asia with a high level of comprehensive
national strength, is pursuing stable, reform-orieted
policies. Boucher highlighted positive tends in
Kazakhstan to underscore the stabilizing effects and
economic benefits of building democratic institutions.
As for Kyrgyzstan, the nation is moving toward
stability after th 2005 "Tulip Revolution," which Li
termed the"March 24 Incident." Facing increasing
challenges from the three evils, Kyrgyzstan needs
international assistance to deal with these issues, Li
argued. Tajikistan is stable and President Rahmonov
has further consolidated his authority, enjoying broad
support in advance of November elections. Li noted
that the United States has strengthened military and
security cooperation with Tajikistan. Boucher replied
that we have been working closely with both Kyrgyzstan
and Tajikistan on economic development and regional
integration. He added that the United States
successfully concluded basing discussions with
Kyrgyzstan and has worked to build Tajikistan's
counter-narcotics and border patrol capacity.

Turkmenistan and Uzbekistan
--------------


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7. (C) Commenting that Turkmenistan has been
generally stable since independence, Li said the
Chinese government expects it will remain so despite
concerns about President Niyazov's health and
Turkmenistan's overdependence on oil and gas revenues.
Boucher countered by highlighting the isolated and
opaque nature of the Turkmenbashi's government, noting
the impact of declining social services. Turning to
Uzbekistan, which China believes is "greatly
important" to Central Asia, Li said President Karimov,
a man of "strong character," enjoys "high authority"
and is firmly in control, despite extremist activity
in the Fergana Valley. A series of incidents,
including the "terrorist acts" that precipitated the
2005 Andijan incident, are the work of extremists, Li
asserted. Boucher stressed that Uzbekistan's
stability may be temporary because its isolation has
harmed its people and allowed Russian security
interests and Gazprom's economic demands to compromise
its sovereignty. The Andijan incident is much more
complicated than a "terrorist" incident, Boucher
pointed out, noting that the United States condemned
the government's killing of hundreds of innocent
demonstrators.

South Asia: General Views
--------------


8. (C) Li, noting the China's 4,700 km common border
with South Asian states, stressed the importance of
regional peace and stability to China's economic
development and security. Expanding economic ties
would particularly help western China's development
and provide an opportunity for Chinese companies to go
global. Beijing is promoting improved political ties
through high-level visits and also hopes to strengthen
multilateral cooperation, such as through the South
Asian Association for Regional Cooperation. While the
region faces many problems, including the threat of
terrorism, setbacks in the Sri Lankan peace process,
territorial conflicts such as Kashmir and internal
instability in Nepal, Li highlighted positive
developments such as improving India-Pakistan
relations and an increased emphasis on economic
development. Boucher emphasized U.S. success in
improving our traditionally strong relations with
Pakistan and India, highlighting the positive impact
on India-Pakistan relations. He described recent
positive steps by India and Pakistan to address the
Kashmir problem and noted U.S. interest South Asian
regional free trade efforts. Boucher emphasized U.S.
interest in cooperating with China to address common
challenges in South Asia.


9. (C) Agreeing on the need to improve cooperation on
South Asia, Li proposed establishing a United States-
China-India trilateral mechanism to discuss issues of
concern, as well as "dialogue mechanism" for the
United States and China to exchange views on an ad hoc
basis. He urged strengthening U.S.-China policy
coordination, jointly fighting terrorists, separatists
and religious extremists in the region and using the
South Asian Association for Regional Cooperation as a
platform to coordinate U.S.-China cooperation in South
Asia. Boucher, welcoming efforts to improve bilateral
cooperation, said the United States would consider
Beijing's proposals.

India
--------------


10. (C) China welcomes the warming of relations
between the United States and India, believing that
good U.S.-India relations will contribute to regional
peace and stability, Li said. Beijing welcomes
India's adjustment of its strategic thinking, with New
Delhi now emphasizing economic development as much as

BEIJING 00016162 004.2 OF 007


security. Li stated that China-India ties are
improving and bilateral trade will exceed USD 20
billion this year. He stressed that China and India
are partners, not competitors, dismissing the "theory"
of China-India competition. Li added that improving
China-India strategic ties are not targeted at any
country.


11. (C) Boucher replied that India is both an
important partner for the United States and an anchor
of stability for the region. India is also an
enormous economic force and an important technological
partner. U.S.-India cooperation is growing quickly,
he explained, noting the recent example of our
agreement on civil nuclear cooperation. Boucher said
the agreement is a realistic means of obtaining
India's cooperation in international non-proliferation
efforts. The agreement is good for non-proliferation,
will help India's strategic position and relationships
with other countries, will provide clean energy for
India's development and will lessen India's impact on
international oil and gas markets. Li responded that
Beijing believes all countries can cooperate on the
peaceful use of nuclear energy but hopes this
cooperation will strengthen the global non-
proliferation regime.

Nepal
--------------


12. (C) China believes the situation in Nepal is
developing quickly. The seven-party alliance and
"anti-government forces" have reached consensus on
major issues and are making arrangements for an
interim government, Li said, although differences
remain over the management of troops and weapons as
well as whether Nepal should adopt a constitution or a
republican form of government. China attaches great
importance to Nepal's stability, but maintains a
policy of non-interference and has no ties with the
Maoists. Boucher said the United States is pushing
for the restoration of the political process, but is
concerned about Maoist intentions. The Maoists claim
they wish to join the political process, but continue
to behave violently. Stressing the importance of
international support to the new government, Boucher
stated that we have 40 million dollars available to
assist Nepal.


13. (C) In a separate meeting, Ministry of Foreign
Affairs Asia Department Director General Hu Zhengyue
stated that the monarchy (though not the King) still
appeals to many Nepalis, who must decide for
themselves whether to retain it in some form. Hu said
China has not resumed military assistance to Nepal and
noted that economic assistance focuses on
infrastructure and may include a hydroelectric dam
project.

Pakistan-Afghanistan Relations
--------------


14. (C) Boucher said Pakistan and Afghanistan are
confronting common challenges, pointing out that Al
Qaeda and Taliban terrorists, drug dealers and tribal
elements are fiercely resisting the Afghan government
as it expands its authority beyond Kabul. Pakistan
faces similar challenges, particularly in its border
regions. Pakistan and Afghanistan are close U.S.
partners in the war on terror and we encourage both
countries to cooperate with each other, as Secretary
Rice stressed during her July visits to Kabul and
Islamabad. Boucher welcomed Chinese assistance to
Afghanistan, noting China's recent pledge to provide
Afghan police training and equipment. He asked if the
Chinese government could provide more for the Afghan
army and police and the Chinese responded that they

BEIJING 00016162 005.2 OF 007


had not been asked by the Afghan government to do so.


15. (C) Li said he believes Afghanistan's rebuilding
efforts are advancing and the overall situation is
improving, although the country faces many obstacles
and China is increasingly affected by Afghan narcotics
production and trade. During President Karzai's 2004
inauguration, Li observed Afghan warlords and
government officials exchanging "big hugs." He
wondered whether the warlords are faithfully
implementing government policies and reconstruction
programs. China has friendly relations with
Afghanistan and Pakistan and has signed Treaties of
Good Neighborliness and Friendly Cooperation with
both. Sino-Pakistani relations are particularly
important, Li explained, because Pakistan borders
China's Xinjiang Uighur Autonomous Region and thus
directly affects domestic stability and security.

Sri Lanka
--------------


16. (C) Boucher said the United States is working
with Norway and the co-Chairs to support the peace
process and is urging the Sri Lankan government to
initiate peace proposals and reach out to its Tamil
population. The United States is urging countries
with large Tamil populations to disrupt the flow of
finances and weapons to the Tamil Tigers, who have yet
to commit themselves to the peace process. Li agreed
that national reconciliation is the only way forward
and hopes the international community will urge both
sides to return to negotiations.

Discussion with Chinese Scholars
--------------


17. (C) Chinese scholars at a roundtable discussion
hosted by the Ministry of State Security-affiliated
China Institutes of Contemporary International
Relations arued that the U.S. policy of linking South
andCentral Asian issues is not likely to succeed
because of great differences between, and within, the
two regions. The scholars stated that the United
States and China should work together to help India
and Pakistan improve relations because instability in
India-Pakistan relations has the potential to spill
over into less stable countries in the region, such as
Afghanistan. In response to a question about China's
position on a rising India, one scholar responded that
China welcomes India's rise in general, recognizing
that it will have a significant impact on regional and
global stability. He acknowledged traditional strains
on the China-India relationship such as unresolved
border disputes and India's mistrust of China's
strategic intentions, but stated that China is
concentrating on the positive aspects of the
relationship.

Shanghai Cooperation Organization Perspective
--------------


18. (C) Shanghai Cooperation Organization Secretary
General Zhang Deguang told Assistant Secretary Boucher
August 1 that the organization has moved beyond
initial goals of promoting confidence building,
withdrawing military forces and resolving border
disputes affecting the former Soviet Central Asian
countries to become a multifaceted international
organization. Now and in the future, it will address
a broad range of political and economic issues,
including trade and investment, energy, education,
environmental protection, combating the spread of
contagious disease, infrastructure building and
information security. The organization is not so
ambitious as to aim for a free trade zone, but is
consulting with experts on the prospect of

BEIJING 00016162 006.2 OF 007


establishing limited customs-free zones in border
towns to facilitate cross-border trade. It has held
expert discussions on eliminating subsidies,
facilitating cross-border container traffic and
establishing a business council and a joint banking
pool, while engaging in specific projects such as
support for construction of roads and power plants.


19. (C) Concerns that the Shanghai Cooperation
Organization could become a military alliance that
excludes the United States are exaggerated, Zhang
said, adding that he favors expanded consultation with
the United States to avoid such misunderstandings.
The organization will not follow the NATO model. Its
security goal is simply to attack terrorism and
extremism. The organization has no requirement that
would prevent members from undertaking security
cooperation activities with the United States, he
said, although the spirit of the organization is that
no member should act in a way that would damage other
members' security interests. In fact, the
organization's efforts to fight terrorism, drug
trafficking and the spread of illegal weapons are
points in common with the United States. Assistant
Secretary Boucher agreed that China and the United

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States share many goals in the region. Both should
support the independence of Central Asian nations and
encourage their economic development, he said.


20. (C) Addressing Assistant Secretary Boucher's
questions about the organization's relationship with
non-members, Zhang said the group is considering
establishing a new status of "dialogue partner" in
addition to the current observer members and the
Afghanistan Contact Group. During the Organization's
June Summit, Afghanistan informally asked about
becoming a full member, Zhang said. Observers cannot
raise resolutions or participate formally in the
discussion, but are expected to send representatives
to meetings at the same rank as other member
countries. The organization discusses third countries
only as part of its evaluation of the overall security
situation, consistent with its goal of maintaining
peace and stability in the region, Zhang said.

Chinese Energy Firm's Views
--------------


21. (SBU) Assistant Secretary Boucher discussed
Central Asian energy issues with Wang Dongjin,
Assistant to the President of China National Petroleum
Corporation International, Ltd. Wang said the company
is doing business in 24 countries worldwide, with
projects in countries including Azerbaijan,
Kazakhstan, Turkmenistan, and Uzbekistan. The
company's technological resources are one of the its
strengths when doing business abroad, according to
Wang, who highlighted the business's use of
proprietary Enhanced Oil Recovery technology in
Kazakhstan to boost an oilfield's output from a forty
year average of 2.3 million metric tons per year to
some 6 million metric tons of production in 2005.
This increased yield is part of the 400,000 barrels
per day of crude oil that the company currently
produces from its operation in Kazakhstan.


22. (SBU) Wang told Boucher that the company plans to
further increase its business in Kazakhstan to help
feed China's growing oil and natural gas needs.
Kazakh oil fields currently send 200,00 barrels of
crude oil per day to an oil refinery in western China
through a recently opened pipeline built and operated
by the business. The company expects that total to
climb to 400,000 barrels per day in the future. As a
part of the effort to increase the volume of imports
from Kazakhstan, the company recently proposed the
construction of an additional 1,300 kilometer of

BEIJING 00016162 007.2 OF 007


pipeline. The pipeline would connect oil fields in
east Kazakhstan to the newly operational Sino-Kazakh
pipeline that draws on production from the western
part of the country. The company estimates that its
pipeline construction subsidiary, using a combination
of Chinese, Kazakh and Russian workers, could build
the pipeline in one year. Wang also noted that the
company is pursuing an opportunity to share in oil and
natural gas production from ChevronTexaco projects in
Kazakhstan.


23. (SBU) Wang hopes that the company's possible joint
venture with ChevronTexaco along with other natural
gas projects elsewhere in Central Asia can serve as a
hedge against the apparent plan of Russian energy
company Gazprom to control the Central Asian natural
gas market. He noted that Gazprom's current Central
Asian natural gas production is shipped to Russia as a
cheap substitute for domestic natural gas production
exported to Europe at premium prices. If Gazprom
gains control of Central Asia's natural gas
production, China would probably be forced to pay the
same price as European customers for Gazprom's natural
gas, regardless of whether it is produced in Russia or
Central Asia. To avoid this situation, the company
is prepared to connect its natural gas pipeline
running from western China to Shanghai to natural gas
production in Central Asia. The company also is
prepared to build a second pipeline that could move
Central Asian natural gas to customers in southwestern
China. Wang said that the company recognizes that
there are inherent risks in pursuing energy projects
in Central Asia. For example, if the company wins
production rights to natural gas fields in
Turkmenistan, to get the gas to China they would
probably be forced to build a pipeline through
Kazakhstan rather than along a much shorter route
through Uzbekistan because of Uzbek-Kazakh political
tensions. Wang said the company conducts frequent and
extensive risk assessments to ensure that they
recognize and address such situations when pursuing
business in Central Asia or elsewhere in the world.


24. (U) Assistant Secretary Boucher cleared this
cable.


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