CODEL STEVENS MEETING WITH PRESIDENT HU JINTAO

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 016512

SIPDIS

SIPDIS

E.O. 12958: DECL: AFTER KOREAN UNIFICATION
TAGS: PREL PTER ECON ENRG CH KN LE IR
SUBJECT: CODEL STEVENS MEETING WITH PRESIDENT HU JINTAO


Classified By: Ambassador Clark T. Randt, Jr. Reasons 1.4 (b/d).

Summary
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1. (C) CODEL Stevens, accompanied by the Ambassador,
reviewed with President Hu Jintao the results of the
U.S.-China Inter-Parliamentary Exchange dialogue and
urged further Chinese cooperation on the North Korean
and Iranian nuclear issues. President Hu said the
bilateral relationship is in good shape, emphasized
the importance of continued high level exchanges,
outlined his recent discussions with President Bush
and called for expanded military-military exchanges
and cooperation on resource issues. China is prepared
to undertake further efforts to bring North Korea back
to the Six-Party Talks, President Hu said, but asked
for more flexibility on the part of the United States.
China will continue to work to persuade Iran to accept
the package proposal and believes the Iran nuclear
issue should be solved diplomatically. The Senators
urged enhanced bilateral cooperation on energy,
economic issues and regional security. President Hu
said China faces new challenges in its development in
the way of resource depletion and environmental
degradation and must seek to change its growth mode
and enhance domestic demand. End Summary.


2. (SBU) President Hu welcomed CODEL Stevens and
thanked Senator Stevens for helping China by fighting
Japanese aggression during World War II. He reviewed
the CODEL's meetings in China and thanked Senator
Stevens and Senator Inouye (who had departed China
earlier) for their contributions to U.S.-China
relations through the establishment of the
constructive Inter-Parliamentary Exchange mechanism.
Senator Stevens briefly reviewed the history of the
U.S.-China Inter-Parliamentary Exchange and cited
hopes for robust future exchanges, perhaps including
joint hearings or trilateral dialogue that would
include legislators from the United States, China and
Japan. He characterized the Inter-Parliamentary
Exchange dialogue of the past week as frank, results-
oriented and successful in furthering discussion of
how to handle problems that confront both countries.

Senators Urge Cooperation on Regional Issues
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3. (SBU) Senator Murray brought President Hu
greetings from Seattle, where he had visited in April,
and noted the in-depth Inter-Parliamentary discussions
on energy, defense, health and economic issues. She
urged China to continue purchases of U.S. aircraft and
computer software. Senator Cochran, Senator Dayton
and Senator Coleman all expressed concern about the
threat posed by North Korea's nuclear program,
lamented the stalling of the Six-Party Talks and
solicited President Hu's views on how to move forward
to resolve the North Korean nuclear issue.


4. (SBU) Senator Specter thanked President Hu for
China's support on UNSC resolution 1696 on the Iran
nuclear issue, but expressed concern over media
reports that a Chinese-made missile was used by
Hezbollah to sink an Israeli ship in the
Mediterranean. He urged further Chinese cooperation
in international efforts to prevent destabilizing arms
sales and transfers. Senator Alexander asked about
China's plans to boost its educational and scientific
prowess in its drive for economic development.
Senator Coleman and Senator Burr noted opportunities
and challenges faced by the United States and China,
including possibilities to cooperate on energy
security and the need to show leadership in bringing
peace to areas of current instability.

Stakeholders and Constructive Partners
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5. (C) President Hu concurred on the importance of
further developing the Inter-Parliamentary Exchange
mechanism and encouraged expansion of the dialogue to
include more agenda items. U.S.-China relations are
currently in good shape, President Hu stated, citing
his successful April visit to Washington and his
recent meeting with President Bush in St. Petersburg

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in connection with the G-8 Summit. The United States
and China have reached an important consensus on
further development of constructive, cooperative
relations on all fronts. Our joint efforts have
brought achievements in the areas of counterterrorism,
non-proliferation, trade and economic development,
energy cooperation, environmental protection,
education and public health. The two sides have had
good cooperation on the issues of North Korea, Iran
and the Middle East and other regional and
international issues.


6. (C) Central Military Commission Vice Chairman
General Guo Boxiong and State Councilor and Minister
of Public Security Zhou Yongkang both recently visited
the United States, President Hu noted. General Guo
had good discussions on further cooperation on
military exchanges. State Councilor Zhou had
productive talks on strengthening law enforcement
cooperation. Against the new international backdrop,
U.S.-China relations have moved beyond bilateral
issues to encompass strategic and global issues. As
"stakeholders and constructive partners," we should
continue to seek common ground, discuss differences,
treat each other with respect and increase trust and
cooperation, President Hu stated. The United States
and China should properly settle sensitive issues and
expand consensus to ensure that relations continue to
grow on a healthy track.

Procuring U.S. Aircraft and Software
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7. (SBU) In response to Senator Murray's remarks,
President Hu said that Chinese aircraft purchases from
Boeing will "continue smoothly" and that China will
strictly honor its commitments to install certified
software on Chinese-made computers.

North Korea
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8. (C) President Hu cited China's efforts to promote
the reconvening of the Six-Party Talks and said that
China is committed to a nuclear weapons free Korean
Peninsula as well as the maintenance of peace and
stability on the Peninsula. Through joint efforts of
the parties, including China and the United States, a
joint statement was signed in September last year.
However, due to the financial issue, the Talks reached
an impasse. The North Koreans' testing of missiles in
early July created a predicament, Hu said.


9. (C) UNSC resolution 1695 has established the
common position of the international community on the
DPRK missile launches, but the North Korean situation
remains complicated and sensitive. Imposition of
sanctions is not a "fundamental solution" to bringing
about peace on the Korean Peninsula. The solution
lies in promoting the Six-Party Talks mechanism to
find a peaceful solution through dialogue. We should
not give up efforts because of the current
difficulties and should continue to try to resume the
Six-Party Talks as soon as possible. China is willing
to continue its efforts toward this end and to enhance
coordination with the United States, but hopes that
the United States will show flexibility and properly
address DPRK concerns so the Talks can resume quickly.

Iran
--------------


10. (C) China is opposed to all forms of nuclear
proliferation, supports maintenance of peace and
stability in the Middle East and believes the Iran
nuclear issue should be settled through peaceful,
diplomatic means. UNSC 1696 demonstrated to Iran the
consensus of the international community on this
issue. China has been working to persuade Iran to
accept the proposal put forward by the EU and other
parties. President Hu said he worked personally
during President Ahmadinejad's visit to Shanghai for
the Shanghai Cooperation Organization Summit to
persuade Ahmadinejad. As for arms sales to Iran,
China has strictly followed the relevant rules and
regulations. In the past, China has conducted some
conventional weapons trade with Iran, with the clear

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understanding that there should be no transfers,
President Hu stated.

Middle East Conflict
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11. (C) Regarding the conflict in Lebanon, Hu noted
that the UNSC has adopted a resolution calling for
cessation of hostilities. The pressing issue now is
for the parties to cease fire and reduce the suffering
of the innocent civilian population.

Economics and Science
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12. (SBU) Despite China's rapid economic growth since
reform and opening in the late 70s, China remains a
developing country, President Hu stated. China now
faces new problems and challenges, including resource
depletion and environmental degradation, which require
a change in the economic growth mode if China is to
maintain continued growth and development. China must
work to expand domestic demand and improve its
scientific, technological and educational base. In
the recent National Science and Technology Conference,
the idea of developing the country through innovation
was launched. President Hu encouraged further
scientific cooperation between the United States and
China and advocated expansion of discussion of
regional security and defense issues in the Inter-
Parliamentary Exchange mechanism. He closed by
reiterating the importance of dialogue between China
and the U.S. Congress and invited the Senators to
return often to China.

PARTICIPANTS
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13. (U) U.S. Participants:
Senator Ted Stevens
Ambassador Clark T. Randt, Jr.
Senator Patty Murray
Senator Thad Cochran
Senator Arlen Specter
Senator Mark Dayton
Senator Lamar Alexander
Senator Norm Coleman
Senator Richard Burr
Rick Desimone
George Lowe
Jennifer Mies Lowe
Embassy notetaker
Interpreter

Chinese Participants:
President Hu Jintao
NPC Vice Chairman Sheng Huaren
NPC Foreign Affairs Committee Chairman Jiang Enzhu
Vice Foreign Minister Yang Jiechi
NPC Foreign Affairs Committee Vice Chairman Lu Congmin
NPC Deputy Secretary General Wang Wanbing
Director of President Hu's Office Chen Shiju
NPC Foreign Affairs Office Director Zhu Xueqing
NPC Foreign Affairs Committee Director Peng Fang
MFA North American Affairs Director General Liu Jieyi
Chinese Embassy in Washington Counselor Chen Guomin
Notetakers
Interpreter


14. (U) CODEL Stevens did not have the opportunity to
clear this message.
RANDT