C O N F I D E N T I A L BEIJING 016515

SIPDIS

SIPDIS



E.O. 12958: DECL: AFTER KOREAN UNIFICATION
TAGS: PREL PTER ECON ENRG CH TW KN LE IR
SUBJECT: CODEL STEVENS AND NPC CHAIRMAN WU BANGGUO DISCUSS
U.S.-CHINA BILATERAL ISSUES


CLASSIFIED BY: DEPUTY CHIEF OF MISSION DAVID S. SEDNEY. REASONS 1.4 (B
/D)

SUMMARY
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1. (C) CODEL STEVENS, ACCOMPANIED BY THE AMBASSADOR,
MET WITH NATIONAL PEOPLE'S CONGRESS (NPC) CHAIRMAN WU
BANGGUO ON AUGUST 11 IN BEIJING TO DISCUSS KEY U.S.-
CHINA BILATERAL ISSUES FOLLOWING THE THIRD ANNUAL
U.S.-CHINA INTER-PARLIAMENTARY GROUP (IPG) DIALOGUE IN
GUILIN. SENATORS RAISED CONCERNS ABOUT PORT SECURITY,
RULE OF LAW, ENERGY POLICY, SCIENCE AND TECHNOLOGY
INVESTMENT, AND COUNTERTERRORISM. WU NOTED THE
CODEL'S CONTRIBUTION TO INCREASING U.S.-CHINA
COOPERATION ON ISSUES INCLUDING TAIWAN, ENERGY
SECURITY AND AVIAN FLU AND SAID HE HOPED U.S. MID-TERM
ELECTIONS WOULD NOT DISRUPT THE POSITIVE TRENDS IN THE
BILATERAL RELATIONSHIP. SENATOR STEVENS URGED CHINESE
LEADERS TO ACT WITH RESTRAINT ON THE TAIWAN ISSUE,
ESPECIALLY AS THE BEIJING OLYMPICS APPROACH. END
SUMMARY.

SENATORS RAISE TERRORISM, RULE OF LAW, HEALTH
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2. (SBU) SENATOR STEVENS STARTED BY EXPRESSING
APPRECIATION FOR THE FRANK AND OPEN DIALOGUE WITH NPC
VICE-CHAIRMAN SHENG HUAREN AND OTHER CHINESE
COUNTERPARTS IN GUILIN. HE NOTED THAT HE HAD ATTENDED
A PRESS CONFERENCE WHERE HE WAS ASKED WHY THE CODEL
WAS SPEAKING TO CHINESE LEADERS WITH A "DIFFERENT
POLITICAL IDEOLOGY." ANSWERING, SENATOR STEVENS SAID
HE EXPLAINED TO THE JOURNALIST THAT THE CHINESE ARE
FRIENDS AND EXPRESSED CONFIDENCE THAT EXCHANGE OF
VIEWS PROVIDES A PATHWAY TO CONTINUED FRIENDSHIP AS
WELL AS BETTER AND MORE PEACEFUL RELATIONS.


3. (SBU) FOLLOWING SENATOR STEVENS' OPENING REMARKS,
SENATOR COCHRAN CITED U.S. EXPERIENCES WITH HURRICANE
KATRINA AND EXPRESSED SYMPATHY FOR THOSE SUFFERING THE
EFFECTS OF TYPHOON PRAPIROON. SENATOR SPECTER
DISCUSSED THE IMPORTANCE OF RULE OF LAW AND DESCRIBED

THE IMPETUS FOR TEMPLE UNIVERSITY'S BEIJING-BASED RULE
OF LAW PROGRAM, WHICH CAME ABOUT AFTER A 1999 INCIDENT
IN WHICH A CHINESE-AMERICAN LIBRARIAN WAS DETAINED IN
CHINA WITHOUT CHARGES OR A HEARING. WHILE
ACKNOWLEDGING DIFFERENCES BETWEEN U.S. AND CHINESE
SOCIETY, SENATOR SPECTER EMPHASIZED THE TEMPLE
PROGRAM'S USEFULNESS IN TRAINING CHINESE JUDGES,
LAWYERS, AND LEGAL ACADEMICS, THEREBY HELPING CHINA TO
INCORPORATE RULE OF LAW VALUES INTO ITS SYSTEM.


4. (SBU) SENATOR MURRAY CITED THE STRONG U.S.-CHINA
TRADE RELATIONSHIP, INCLUDING IMPORTANT TIES BETWEEN
HER HOME STATE OF WASHINGTON AND CHINA AND URGED
CONTINUED DIALOGUE AND INCREASED COOPERATION IN THE
AREA OF PORT SECURITY. SENATOR DAYTON OFFERED
CONGRATULATIONS ON THE SUCCESS OF CHINA'S ECONOMIC
POLICIES, CITING ITS HIGH GDP GROWTH RATE AND
RELATIVELY COMPARABLE GROWTH RATES THROUGHOUT MANY OF
CHINA'S PROVINCES AND REGIONS.


5. (SBU) SENATOR ALEXANDER ASKED CHAIRMAN WU TO
COMMENT ON CHINA'S PLANNED INVESTMENT IN EDUCATION,
SCIENCE AND TECHNOLOGY, NOTING THAT SUCH INVESTMENT IS
A TOPIC OF DISCUSSION IN BOTH CHINA AND THE UNITED
STATES. CHAIRMAN WU SAID CHINA WANTS TO INVEST 4
PERCENT OF GDP IN THESE AREAS. DESPITE RAPID ECONOMIC
AND STEEP INCREASES IN THE NUMBERS OF STUDENTS
ATTENDING UNIVERSITY (FROM 200,000 TO 15,000,000 IN 20
YEARS), THE PERCENTAGE OF GROWTH ATTRIBUTABLE TO
SCIENCE AND TECHNOLOGY IS LOW AND CHINA RELIES HEAVILY
ON FOREIGN TECHNOLOGY. CHINA MUST BOOST EDUCATION AND
TECHNOLOGY INVESTMENT TO ENHANCE THE "QUALITY OF THE
ECONOMY," IMPROVE ENERGY EFFICIENCY, AND FIND BETTER
"MODES OF DEVELOPMENT." THROUGH INCREASED INVESTMENT,
CHINA HOPES TO BUILD AN "INNOVATIVE SOCIETY" WITHIN
THE 10-15 YEAR TIMEFRAME, WU REMARKED.


6. (C) SENATOR COLEMAN NOTED THAT, GIVEN THEIR
DEPENDENCE ON FOSSIL FUELS AS WELL AS THE GROWING
INTER-DEPENDENCE OF THE U.S. AND CHINESE ECONOMIES,
BOTH COUNTRIES WOULD SUFFER DISASTROUS CONSEQUENCES IF
TERRORISTS WERE ABLE TO ATTACK AND DISRUPT OIL SUPPLY
CHAINS. SINCE TERRORISM THREATENS BOTH THE UNITED


STATES AND CHINA, SENATOR COLEMAN EXPRESSED HOPE THAT
THE TWO COUNTRIES CAN COOPERATE TO PREVENT MONEY FROM
FLOWING TO IRAN AND OTHER COUNTRIES WITH
"DESTABILIZING" INFLUENCE. SENATOR BURR EMPHASIZED
THE BENEFITS OF COOPERATING TO FIGHT COMMON THREATS
SUCH AS TERRORISM.


7. (SBU) SENATOR BURR ALSO THANKED CHINESE LEADERS FOR
SHARING INFORMATION WITH THE U.S. CENTERS FOR DISEASE
CONTROL (CDC). NOTING THE POSSIBLE DEVASTATING IMPACT
OF AN AVIAN FLU OUTBREAK ON THE WORLD, HE STRESSED
THAT MORE MUST BE DONE TO SHARE INFORMATION ABOUT
CASES, DISEASE MIGRATION PATTERNS, AND THE
EPIDEMIOLOGICAL SITUATION ON THE GROUND.

CHAIRMAN WU EMPHASIZES U.S.-CHINA SHARED INTERESTS
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8. (C) CHAIRMAN WU EMPHASIZED THE VALUE CHINA PLACES
ON ITS RELATIONSHIP WITH THE UNITED STATES. BOTH
COUNTRIES, HE SAID, SHARE AN INCREASING UNITY OF
INTERESTS AND NOW COOPERATE CONSTRUCTIVELY ON A BROAD
RANGE OF ISSUES. PRESIDENT BUSH'S RECENT MEETINGS
WITH PRESIDENT HU IN WASHINGTON, D.C. STRENGTHENED THE
BASIS FOR "STABLE AND HEALTHY" COOPERATION BETWEEN THE
TWO NATIONS, AS IS APPARENT IN DISCUSSIONS CONCERNING
IRAN, NORTH KOREA, AND THE MIDDLE EAST.


9. (C) CHAIRMAN WU PRAISED THE OPEN LINES OF
COMMUNICATION BETWEEN THE UNITED STATES AND CHINA IN
DEALING WITH THE KOREAN PENINSULA NUCLEAR ISSUE,
THOUGH HE CONCEDED DIFFICULTIES. CHAIRMAN WU AFFIRMED
CHINAS DESIRE TO MAINTAIN THE SIX-PARTY TALKS AND FOR
DENUCLEARIZATION OF THE KOREAN PENINSULA, BUT HE ALSO
SAID CHINA WANTS MORE FLEXIBILITY FROM THE UNITED
STATES IN DEALING WITH NORTH KOREA.


10. (C) TURNING TO IRAN, CHAIRMAN WU SAID CHINA WANTS
IRAN TO ADHERE TO THE NUCLEAR NON-PROLIFERATION TREATY
AND SEEKS PEACEFUL RESOLUTION OF THE IRANIAN NUCLEAR
ISSUE. CHAIRMAN WU SAID PRESIDENT HU JINTAO WORKED
PERSONALLY ON THIS WITH IRAN'S PRESIDENT AHMADINEJAD
AT THE JUNE 2006 SHANGHAI COOPERATION ORGANIZATION
SUMMIT. CHINA HOPES IRAN WILL RESPOND FAVORABLY TO
THE PENDING SIX-NATION PROPOSAL ON ITS NUCLEAR ENERGY
PROGRAM. REGARDING LEBANON, CHAIRMAN WU SAID CHINA
HAD NO PARTICULAR DISAGREEMENT WITH THE U.S.-FRANCE
PROPOSAL FOR ENDING THE CONFLICT IN LEBANON, BUT HE
URGED THE UNITED STATES TO "LISTEN MORE TO THE VIEWS"
OF ARAB COUNTRIES INCLUDING LEBANON.


11. (C) CHAIRMAN WU AFFIRMED THAT COMMON INTERESTS
BETWEEN THE UNITED STATES AND CHINA OUTWEIGH
DIFFERENCES, BUT CONCEDED THAT SOME PROBLEMS EXIST.
CHAIRMAN WU URGED A "STRATEGIC, LONG TERM" VIEW THAT
DOES NOT ALLOW "MINOR ISSUES" TO HOBBLE THE LARGER
RELATIONSHIP. BOTH SIDES, HE SAID, SHOULD BEAR IN
MIND BROADER COMMON INTERESTS BUT ALSO ALLOW FOR
DIFFERENCES. CHAIRMAN WU SEGUED TO COMMENTS ON TAIWAN
NOTING THAT, DESPITE "SOME RELAXATION," OPPOSING
TAIWAN INDEPENDENCE REMAINS CHINA'S "MAJOR TASK."

TRADE IMBALANCE AND HIGH-TECH
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12. (SBU) CHAIRMAN WU CLOSED BY EMPHASIZING CHINA'S
SHARED INTEREST WITH THE UNITED STATES IN A STABLE
WORLD ECONOMY. DESPITE RAPID GROWTH, CHINA FACES MANY
PROBLEMS, INCLUDING LOW PER CAPITA INCOME AND UNEVEN
INCOME DISTRIBUTION. THESE PROBLEMS CAN ONLY BE
RESOLVED THROUGH CONTINUED ECONOMIC DEVELOPMENT WITHIN
A STABLE AND PEACEFUL WORLD ECONOMY. CHAIRMAN WU SAYS
THE U.S.-CHINA TRADE IMBALANCE IS GRADUALLY IMPROVING
AND EXPRESSED HOPE THAT THIS ISSUE WILL NOT BECOME
POLITICIZED IN THE UNITED STATES DURING UPCOMING MID-
TERM ELECTIONS. HE ACKNOWLEDGED THAT THIS ISSUE WILL
NOT BE RESOLVED SIMPLY THROUGH CHINA'S PURCHASE OF
U.S.-BUILT AIRCRAFT. HE ALSO URGED THE U.S. TO RELAX
CONTROLS ON THE EXPORT OF HIGH-TECHNOLOGY PRODUCTS.


13. (C) SENATOR STEVENS CONCLUDED BY NOTING, ON THE
HIGH-TECHNOLOGY EXPORT ISSUE, THAT CHINA'S RAPID
DEVELOPMENT WILL SOON PLACE IT IN A POSITION WHERE IT
WISHES TO CONTROL ITS OWN HIGH-TECHNOLOGY EXPORTS.
FURTHER DISCUSION ON THIS TOPIC CAN TAKE PLACE IN
2007 WHE THE IPG DIALOGUE RESUMES. STEVENS WARNED


THAT CHINA'S EXTREME SENSITIVITY VIS-A-VIS TAIWAN,
LEFT UNCHECKED, COULD JEOPARDIZE THE 2008 BEIJING
OLYMPICS. CROSS-STRAIT TENSIONS, HE SAID, COULD
AFFECT THE BEIJING OLYMPICS. SENATOR STEVENS URGED
CHINESE LEADERS TO ACT WITH RESTRAINT. FINALLY,
SENATOR STEVENS INDICATED HE WOULD LIKE TO VISIT THE
CHINESE ACADEMY OF SCIENCES INSTITUTE OF PLASMA
PHYSICS FACILITY IN HEFEI, ANHUI PROVINCE, WHERE
NUCLEAR FUSION RESEARCH IS UNDERWAY. HE SAID THE
UNITED STATES AND CHINA SHOULD SHARE THE COSTS OF
DEVELOPING NUCLEAR FUSION AS A VIABLE ENERGY SOURCE.

PARTICIPANTS
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14. (U) U.S. PARTICIPANTS:
SENATOR TED STEVENS
AMBASSADOR CLARK T. RANDT, JR.
SENATOR PATTY MURRAY
SENATOR THAD COCHRAN
SENATOR ARLEN SPECTER
SENATOR DAYTON
SENATOR LAMAR ALEXANDER
SENATOR NORM COLEMAN
SENATOR RICHARD BURR
GEORGE LOWE
JENNIFER MIES LOWE
EMBASSY NOTETAKER
INTERPRETER

CHINESE PARTICIPANTS:
NPC CHAIRMAN WU BANGGUO
NPC VICE CHAIRMAN SHENG HUAREN
NPC FOREIGN AFFAIRS COMMITTEE CHAIRMAN JIANG ENZHU
VICE FOREIGN MINISTER YANG JIECHI
NPC LAW COMMITTEE VICE CHAIRMAN HU KANGSHENG
NPC FOREIGN AFFAIRS COMMITTEE VICE CHAIRMAN LU CONGMIN
NPC DEPUTY SECRETARY GENERAL WANG WANBING
NPC FINANCE COMMITTEE VICE CHAIRMAN HU ZHENGQING
NPC DEPUTY SECRETARY GENERAL SUN WEI
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


15. (U) THIS CABLE WAS CLEARED BY CODEL STEVENS.
RANDT