DDG LUO ON CHINA-SOUTH ASIA DEVELOPMENTS

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 020223

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/22/2026
TAGS: PREL PINR XD AF NP IN PK CH
SUBJECT: DDG LUO ON CHINA-SOUTH ASIA DEVELOPMENTS

REF: STATE 151705

Classified By: Political Minister Counselor Daniel Shields. Reasons 1.
4 (b/d).


1. (C) Summary: China remains concerned about
instability in Nepal, MFA Asia Department Deputy
Director General Luo Zhaohui told Polmincouns in a
September 22 discussion of China-South Asia issues.
China continues to avoid contact with the Maoists in
Nepal and wonders what role the UN could play in
Nepal. President Hu Jintao will visit India and
Pakistan in November. China appreciates the efforts
the USG has made, including A/S Boucher's viit to
China for the South and Central Asia Sudialogue, to
promote U.S.-China cooperationon South Asia. Luo
confirmed press reports that popular sentiment
critical of the Government of Pakistan has turned
into anti-Chinese sentiment in parts of Pakistan
including Baluchistan. Luo expects to be sent out as
China's Ambassador to Pakistan soon. End Summary.

Continuing Instability in Nepal
--------------


2. (C) China sees three potential sources of
instability in Nepal, DDG Luo Zhaohui told
Polmincouns on September 22: 1) uncertainty over the
future of the monarchy, 2) the health of Prime
Minister Koirala and 3) the role of the "so-called
Maoists." Prime Minister Koirala is calling for the
monarchy to retain a ceremonial role in the country.
Regarding PM Koirala's health, Luo expressed surprise
over how healthy the PM has appeared since July, when
VFM Wu Dawei visited Nepal. Luo, stressing that this
is a personal opinion, speculated that PM Koirala may
have played up his genuine health problems early in
his tenure as PM in order to lower political
expectations and create room to maneuver.


3. (C) Luo said the key question remains whether the
Maoists will consent to arms management before there
is a political deal. China's policy towards the
Maoists has not changed, with China avoiding
contacts. Chinese scholar Wang Hongwei, who met with
Maoists earlier this year, did so in his capacity as
adviser to a Chinese company, Luo said. Wang is a
retired professor and had not asked the Chinese
Government for permission to hold the meeting, Luo
stated. Polmincouns stressed that all parties should
avoid legitimizing the Maoists in any way while the
Maoists refuse to consent to arms management.


4. (C) China is reviewing its attitude about the role
of the UN in Nepal, according to Division Director
Huang Xilian, who accompanied Luo. Huang asked about
the USG view on the UN's role in Nepal and whether
the UN can help deal with the Maoist issue.
Polmincouns said the USG will focus on doing what is
necessary to help ensure the success of the
Government of Nepal. He indicated he would report to
Washington Luo's query regarding USG thinking on the
appropriate role for the UN in Nepal.

Noninterference Policy Tested in Nepal
--------------


5. (C) Luo acknowledged the tension between China's
longstanding policy of noninterference in the

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internal affairs of other countries and its interest
in maintaining stability. Such tensions affect
Chinese policy in Nepal, he said, where China has a
strong interest in maintaining stability because of
the 1400 kilometer-long border, illegal migration
across the border and issues involving Nepal and
Tibet. Polmincouns urged that China step up its
efforts to act as a responsible stakeholder in its
interactions with countries like Nepal that find
themselves undergoing difficult political
transitions.

President Hu to South Asia in November
--------------


6. (C) President Hu will travel to South Asia in
November after he attends the APEC Leaders' Meeting
in Hanoi, Luo said. Hu will first visit India and
then travel to Pakistan, where he expects to sign a
joint statement addressing political issues, economic
cooperation and border concerns. Luo will travel to
the region soon for consultations in preparation for
the Hu visit. China and India will hold a Directors
General-level dialogue soon that will focus on
counterterrorism issues. Luo asked if President Bush
plans to visit South Asia in connection with possible
travel to the APEC Leaders Meeting in Hanoi in
November. Polmincouns said he would report the
question to Washington. Luo said China appreciates
the efforts the USG has made, including A/S Boucher's
visit to China for the South and Central Asia
Subdialogue, to promote U.S.-China cooperation on
South Asia. Polmincouns said the USG also
appreciates China's efforts in this area.

India, Pakistan and Nuclear Cooperation
--------------


7. (C) China has concerns about U.S.-India civil
nuclear cooperation, Luo said. Chinese scholars
question whether the U.S. position on
nonproliferation has changed, with some suggesting
that civil nuclear cooperation with India is
inconsistent with the U.S. position towards Iran and
the DPRK. Polmincouns emphasized India's good
historical record on nonproliferation issues as a
reason for treating India differently.


8. (C) U.S.-India civil nuclear cooperation is of
concern to Pakistan, Luo said, and this makes the
already sensitive India-Pakistan relationship even
more delicate. He urged the United States to treat
Pakistan and India more evenhandedly and not to
follow India's lead. The USG should take action to
help calm the situation between India and Pakistan,
he suggested. Polmincouns said the United States
respectfully considers India's views, but decides
policy on the basis of U.S. interests and values.

Anti-Chinese Sentiment in Pakistan?
--------------


9. (C) Luo confirmed press reports that popular
sentiment critical of the Government of Pakistan has
turned into anti-Chinese sentiment in parts of
Pakistan including Baluchistan. Local extremists who
have a dispute with the Central Government of
Pakistan about development of the local economy also
harbor anti-Chinese views, given the close links

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between Beijing and Islamabad. China wants to avoid
having its citizens become victims of violence.
China urges the Government of Pakistan to protect
Chinese citizens, many of whom are working on
infrastructure projects in difficult areas, and urges
Chinese companies to be cautious. China appreciated
being invited to the September 18 meeting (reftel) in
Singapore regarding development of Pakistan's
Federally Administered Tribal Areas region.

Chinese Assistance to Afghanistan
--------------


10. (C) China's assistance programs in Afghanistan
are mostly proceeding well, Luo said. A newly
renovated Chinese-supported hospital in Kabul will
open next month, he stated.

Luo to be China's Next Ambassador to Pakistan
--------------


11. (C) Luo said he expects to be sent out soon as
China's Ambassador to Pakistan. Both Luo and his
wife, who began serving as Political Counselor at the
Chinese Embassy in Bangkok two months ago, were
scholars of South Asian affairs before they jointed
the MFA. Luo has previously served in India and in
the United States, but his posting to Islamabad will
be his first in Pakistan. He said he looks forward
to good cooperation with Ambassador Crocker.
RANDT