BURMA CONSULTATIONS WITH PRC

C O N F I D E N T I A L SECTION 01 OF 05 BEIJING 002776

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/15/2016
TAGS: PREL PHUM PGOV UNSC UNGA CH BM
SUBJECT: BURMA CONSULTATIONS WITH PRC

REF: A. BEIJING 16482

B. BEIJING 17382

C. RANGOON 179

D. RANGOON 206

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

SUMMARY
--------------


1. (C) The PRC recognizes that the situation in Burma is
bad, agrees that the regime's isolationist behavior is
growing and welcomes further discussion with the United
States, but Beijing does not believe that Burma threatens
regional security at present. After listening to a review of
current U.S. Burma policy and the situation on the ground
during a February 13 working lunch with a visiting DOS
delegation, MFA Asian Affairs Deputy Director General Zhao
Jianhua said that Beijing recognizes the problems but is
concerned that a sudden move to democracy could lead to the
disintegration of Burma, which would destabilize the region.
The Burmese regime's main goal is to protect the military's
interests in a future political structure. Zhao speculated
that perhaps a new approach of pressure combined with
engagement on a variety of issues like narcotics, health
issues and political prisoners might lead to positive change.
China does not support UNSC action at present but does
support a continuing role for a USYG Special Envoy. China
will tell PM Soe Win during his February 14-18 visit that
China wants Burma to remain stable, focus on economic
progress and move the national reconciliation process
forward. End summary.

U.S. Policy
--------------


2. (C) A USG team led by EAP/MLS Deputy Director Robert
Rapson met with MFA Asia Department Deputy Director General
Zhao Jianhua over lunch on February 13 to discuss Burma.
Rapson said U.S. discussions with regional partners are
designed ratchet up pressure on Burma and push the regime to
engage in a real process for meaningful political reform.
The unpopular, unpredictable and increasingly repressive
Burmese regime is not offering a viable political process to
move Burma in a positive direction and continues to mismanage
relations with minority groups. The sudden and unannounced
move of the capital to Pyinmana confirmed the regime's
disregard for the international community while the
deteriorating economic situation is leading to instability.
The path forward for the regime is to engage in a meaningful,
inclusive dialogue that leads to a political process that
brings in all groups to democratize the country. The United
States has been encouraging other countries publicly or at
least privately to carry similar messages emphasizing the
need for credible and inclusive political reform.


3. (C) Reviewing recent developments on the ground in Burma,
Embassy Rangoon Pol-Econ Chief Murphy said the "roadmap" is a
sham, with hand-picked participants working on a pre-drafted
constitution to come to a pre-determined conclusion that will
keep the military junta in control of the country. There is
no movement towards reconciliation, the regime's self-imposed
isolation is increasing, repression of pro-democracy and
ethnic groups continues and there are increasing restrictions
on UN and NGO activities, including humanitarian and
development aid. The economic situation is grim, with all
socioeconomic indicators declining, inflation at 50 percent
and the lack of any real economic choice for most of the
population.

PRC: No Interference but No Illusions
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4. (C) Referring to Beijing's commitment to the U.S.-China
Senior Dialogue and its related sub-dialogues and recognizing
that Burma is important to both the United States and China,
Zhao welcomed "informal and frank" discussion, urging that
the discussion not be made public. He said Beijing has a
fundamental interest in a stable Burma. The PRC would like
to see progress toward national reconciliation and economic
development because a Burma that falls into chaos is in the
interests of neither China nor the United States. Although
the PRC policy of non-interference in the internal affairs of
other nations limits China's role in Burma, Zhao said Beijing
is "quite concerned" with the situation in Burma and would
like to see progress on national reconciliation and movement

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towards democracy via a stable political process. Zhao said
it is clear to China that the regime's transition process is
not serious and that the real goal is to maintain a large
military role in governing the country. Discounting the
Burmese excuse that the pro-democracy parties voluntarily
decided not to participate in the National Convention, Zhao
said China recognizes that the parties are being excluded.

China Fears Chaos, Junta Keeps Country Stable
--------------


5. (C) Zhao said the PRC worries that if the junta left
suddenly and Burma became democratic no one could be sure of
the outcome, arguing that the military is the only force that
can keep Burma stable. He claimed that movement towards
democracy in other parts of the world has often been chaotic
and sometimes produced governments that were no better or
even worse than their predecessors. China wants progress on
political reform and national reconciliation, but is also
"extremely concerned" that pushing too hard could lead to
chaos or even the disintegration of Burma. Such an outcome
would destabilize the entire region and upset the regional
balance of power. Noting that the number of Chinese
companies investing Burma has been increasing in recent years
and that China provides significant economic assistance, Zhao
said Beijing also has economic interests at stake.

Burmese Military Protecting Own Interests
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6. (C) Zhao said the Burmese regime faces a dilemma because
on the one hand it wants to keep the status quo but on the
other hand it faces national and international pressure to
move to democracy and engage in national reconciliation.
What is not clear to the generals is how their interests and
the interests of the Burmese military will be protected.
Zhao offered that the international community needs to
realize the political realities in Burma. Although it is not
necessarily in keeping with democratic principles, the
international community and regional countries should think
about how the military regime's interests will be protected,
because only under these circumstances will the regime be
willing to move forward on real change in Burma.

One Stubborn Old Man Leading Burma
--------------


7. (C) Zhao said Burma is ruled by Senior General Than Shwe,
a "stubborn old man" who is becoming even more stubborn and
inflexible as he gets older. Than Shwe makes all major and
many minor decisions. Not even the head of the Burmese Army
General Maung Aye or Prime Minister Soe Win can question his
decisions. Noting that the transition process has already
begun, Zhao professed no insight into who will succeed Than
Shwe, while stressing it is in the military's interest to
have a smooth shift of power from Than Shwe to the next
military leader. Zhao said the junta is preparing for the
transition now and wants to create a political structure to
ensure the military's dominant role in Burma before Than Shwe
departs the scene. Zhao said former PM Khin Nyunt was a
"less stubborn general" but that his pragmatic dialogue with
ethnic groups, countries in the region and the international
community, combined with power dynamics among the senior
generals, led to his fall from power. Zhao commented that
outsiders should avoid making overly positive comments about
Burmese generals they may favor because this leads to
scrutiny of those individuals by Than Shwe and hurts their
position among their peers.

Pyinmana: Astrology, Monks and an Auspicious Name
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8. (C) Zhao said China is in the dark regarding the move of
the capital to Pyinmana, saying that some Burmese have said
it is because of security concerns, with the regime feeling
the central mountain area is more secure. Zhao said Chinese
sources in Burma report that Than Shwe decided to move the
capital because of auspicious astrological signs, the advice
of two senior Buddhist monks and a phonetic reading of the
name "Pyinmana" to mean "to stay in power forever." Zhao
said the move, besides leaving the diplomatic community
perplexed and the ASEAN community especially annoyed, has
made many of Than Shwe's own officials very unhappy.

PRC Criticizes Burma for Ignoring Its People's Welfare
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9. (C) The Burmese regime is not paying attention to the
welfare of its people, who are experiencing economic
hardship, according to Zhao, who said China is sending a
clear message that Burma needs to do more to promote economic
development and create a positive environment for investment.
China encourages Burma to engage in economic reform that
reflects the true economic situation and shows visiting
Burmese officials the success of China's economic opening and
reform. Zhao pointed out that China cannot direct the regime
to take specific reforms, as Burma, remembering its
colonization by Britain and Japan, is sensitive to outside
interference and the intentions of its big neighbor.
Agreeing with Murphy's assessment of the economic situation
in Burma, Zhao commented that the Burmese regime's boast of
good economic growth in recent years is based on the
artificial official exchange rate. There is no mechanism for
a real market economy, with most benefits flowing to military
and government officials.

Ethnic Groups and the Border
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10. (C) Although the central government has signed
ceasefires with 17 ethnic groups, Zhao said that the ethnic
groups want autonomy and maintenance of the status quo,
affording them a degree of autonomy while the central
government wants to "take them out" and achieve military
dominance over the whole country. Since PM Khin Nyunt's
ouster in 2004, the government has been taking a harder line
with the ethnic groups, which have been maintaining contact
with the central government while at the same time making
preparations and coordinating amongst themselves to ensure
their survival.


11. (C) Commenting that Burma's central government controls
only about 200 km of the 2000 km border between China and
Burma, while five ethnic groups control the reminder, Zhao
said Beijing is very concerned with border issues. Forced to
unilaterally manage the border, the Chinese government is
urging the Burmese regime to reach agreements with the ethnic
groups in order take control of the border. Burma is
concerned about the growth in the number of business deals
and economic agreements entered into directly between the
ethnic groups in Northern Burma and China's southern
provinces. Zhao said China and Burma have agreed to settle
their differences through coordination and dialogue.

Burma an ASEAN "Family" Issue
--------------


12. (C) Zhao said China cannot engage with ASEAN on Burma,
calling this an ASEAN "family issue" and pointing out that
China is not part of the family. However, China does discuss
Burma bilaterally with ASEAN countries such as Laos, Cambodia
and Malaysia. Zhao said China was told that that the visit
of Malaysian FM Syed Hamid Albar's ASEAN delegation was
delayed because Burma was too busy moving the central
government from Rangoon to Pyinmana. Zhao commented that
Burma should be relying on ASEAN and making ASEAN feel
comfortable and supportive, but China is puzzled that Burma
is not doing this and is instead showing disregard for ASEAN.
Rapson said the USG is supportive of visits by FM Hamid and
by Indonesian President Yudhoyono, and hoped that both would
convey firm messages to the regime.

Fighting Narcotics
--------------


13. (C) Zhao said Burma's counternarcotics efforts are a
bright spot, saying the PRC Ministry of Public Security has
very good relations with the Burmese central government and
has confiscated large sums of narcotics and arrested drug
lords associated with Burma. China has invested RMB500
million (USD 62 million) in a 400,000 acre alternative crop
program in northern Burma to give the indigenous farmers an
alternative crop to poppies, with China guaranteeing a market
for a portion of the crops. Responding to CNC Tom Wersto's
comments on the U.S. concern with the expansion of the scope
and type of Burma-produced narcotics in the region, Zhao
assessed that the Burmese government is serious about
fighting narcotics but is constrained by the lack of central
government control in areas controlled by ethnic groups,
especially the well-armed and well-trained Wa. Zhao noted
that Burma thinks China can influence the Wa but in reality
PRC influence with the Wa is very limited. In some cases
local Burmese government officials collaborate with the drug
traffickers and powerful and well-equipped international

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underground drug trade networks provide support to Burmese
drug lords, according to Zhao. Nonetheless, Burma is making
serious efforts and is cooperating with China and other
countries. Combating the narcotics trade is a promising area
for additional coordination and cooperation between the
Burmese central government and the international community,
concluded Zhao.

PRC Thoughts On Policy: Perhaps Pressure and Engagement?
-------------- --------------


14. (C) The senior Burmese generals are very sensitive to
outside pressure, which they are feeling from all fronts and
all countries, leading to an intensification of their
self-imposed isolation and stubbornness, according to Zhao.
He said the international community must move away from
isolating and pressuring Burma and towards a policy of
dialogue and engagement that will produce a favorable
regional and international environment if it wants real
results. Suggesting that neither isolation nor engagement
has worked to date to bring about change in Burma, Zhao
speculated that perhaps a new mixed approach that relies not
solely on pressure but also engages the Burmese government
and provides some assistance to Burma would lead to results.


15. (C) Zhao suggested that ASSK's plight should not
dominate the international community's engagement with Burma
and it would be better to include counternarcotics,
trafficking in persons, public health and infectious disease
issues in the agenda. In response to this kind of
engagement, perhaps the Burmese government would reconsider
its positions and be less insular, although Zhao admitted
that turning inward is the junta's tendency.

Not n Favor of UNSC Action, But Welcomes New Specia Envoy
-------------- --------------


16. (C) Zhao said China is not in favor of UNSC involvement
on Burma because Burma does not pose a threat to regional
security. It is hard to say how Burma would react to a UNSC
resolution, though in response to the UNSC briefing the
regime became more stubborn and isolationist. Responding to
Rapson's point that the United States wants to see a new
UNSYG Special Envoy granted access to Burma, Zhao said China
is in favor of the assigning of a new Special Envoy. China
had a good relationship with former Special Envoy Razali,
engaging in frank discussions with him and passing messages
between him and the Burmese leadership. Zhao offered that
Burma did not like Razali because he is Malaysian and was
rumored to have had private business activities in Burma.

U.S. Response
--------------


17. (C) Rapson stressed that the regime's current policies
will not lead to political reform, stability and economic
development. What is needed is a credible, meaningful,
inclusive political process that brings in all domestic
Burmese groups. Releasing political prisoners like Aung San
Suu Kyi, granting access for UN representatives and lifting
restrictions on UN agencies and NGO's providing humanitarian
assistance are steps Burma could take to show the
international community that it is serious about moving
forward.


18. (C) Rapson stressed that release of ASSK and other
political prisoners would remain an important element of the
U.S. message to Burma. Bilateral and multilateral pressure
on the regime is needed to present a strong and unified
message of dissatisfaction with the situation in Burma.
Rapson told Zhao that the United States will continue to work
with key partners and countries in the region, like India,
ASEAN, China, Japan and Korea, as well as the United Nations,
including UNSC engagement to maintain and escalate the
pressure on Burma. Murphy pointed out that dialogue with the
international community has had benefits for Rangoon in the
past. Zhao agreed and said the MFA had the PRC Embassy in
Rangoon to analyze the rationale for Burma's isolationist
policies. Zhao lamented that the Embassy's official
government interlocutors are not able to speak freely, only
parroting written talking points and guidance from the senior
generals.

Burma Prime Minister Soe Win Visit to China
--------------


19. (C) Zhao provided some details of Prime Minister Soe Win

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February 14-18 visit to China (ref. c and d). During Soe
Win's visit, which will include stops in the cities of
Beijing, Xi'an, Guangzhou and Shenzhen, China will tell him
that China wants Burma to remain stable, focus on economic
progress and move the national reconciliation process
forward. Burma will raise its displeasure with the economic
agreements and business deals being cut between Burmese
ethnic groups on the border and China's southern provinces.
China will urge PM Soe Win to reach agreement with the ethnic
groups and to exert control over the border. Zhao said the
lack of central government control leads to numerous
misunderstandings and raises the anxiety of the Burmese
military government regarding China's activities and
intentions, but expects this "long standing and not so
serious" issue to be solved by bilateral, friendly and
cooperative dialogue. Burma's other concern is the illegal
logging in Burma's northern forests by Chinese interests,
cited by a Global Witness report. Zhao said China is
investigating this seriously and will discuss the conclusions
of the investigation with Burma. Responding to a question,
Zhao said avian influenza would be touched on in leadership
meetings, but will mostly be left to the Ministry of Public
Health and Ministry Agriculture to work with Burmese
counterparts. Rapson expressed appreciation for this
overview of the PM,s visit and asked that the Embassy be
given a readout afterwards.


20. (C) Participants:

U.S. PARTICIPANTS
--------------
- EAP/MLS Deputy Director Rob Rapson
- Embassy Rangoon Pol-Econ Chief Patrick Murphy
- INR Analyst Andrew Vincent
- CNC Thomas Wersto
- Political Minister Counselor
- POL External Unit Chief
- Poloff

CHINESE PARTICIPANTS
--------------
- MFA Asian Affairs Deputy Director General Zhao Jianhua
- MFA Division Director for Burma, Cambodia, Laos and Vietnam
Chen Dehai
- MFA Burma Desk Officer Liang Jianjun


21. (U) EAP/MLS Deputy Director Rapson cleared this message.
Randt