PRC ON RELATIONS WITH AUSTRALIA & NEW ZEALAND AND

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 008333

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/05/2021
TAGS: PREL CH AS NZ FJ PP
SUBJECT: PRC ON RELATIONS WITH AUSTRALIA & NEW ZEALAND AND
THE SOLOMON ISLANDS EVACUATION

REF: A. CANBERRA 00601

B. WELLINGTON 00298

C. BEIJING 07890

BEIJING 00008333 001.2 OF 003


Classified By: Political External Unit Chief Edgard
Kagan. Reasons 1.4 (b) and (d).

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


1. (C) PRC relations with Australia and New Zealand
are smooth with frequent high-level dialogues, common
ground on sensitive issues and growing economic and
trade ties, MFA North American and Oceanian Affairs
Counselor Zhang Ping told EAP Senior Advisor Steven
McGann (incoming EAP/ANP Director) on April 28. China
seeks stable and healthy bilateral relations with
Pacific Island nations and is willing to provide
assistance with no political conditions. Zhang lashed
out at Taiwan's "money diplomacy" in the region, which
he blamed for the recent violence against the ethnic
Chinese community on the Solomon Islands. China
recognized the need to respond promptly by evacuating
PRC citizens and other ethnic Chinese seeking
assistance as they faced the imminent threat to their
safety. McGann pointed out that the protection of
refugees and other vulnerable populations is a key
U.S. policy. Zhang said China responded on a
humanitarian basis and now the evacuees are free to go
where they want. End Summary.

Smooth PRC Relations with Australia and New Zealand
-------------- --------------


2. (C) MFA North American and Oceanian Affairs
Counselor for Australia and New Zealand Zhang Ping
told EAP Senior Advisor Steven McGann (incoming
EAP/ANP Director) that China's relations with
Australia and New Zealand are "on the whole smooth"
with particularly positive developments over the last
four years. Relations have four main features.
First, there are regular and constant exchanges of
high level visits. Second, sensitive bilateral issues
are handled by seeking common ground while not letting
disagreements harm the overall positive bilateral
relationship. Zhang noted that both Australia and New
Zealand adhere to the one-China policy and oppose
Taiwan independence. Third, there are well
established mechanisms for dialogue on regional and
international issues, such as annual Foreign Minister-
level dialogues and human rights dialogues. Finally,
economic ties are close, with a steady growth in
trade.

Steadily Developing Trade, Largely Commodities &
Resources
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3. (C) Zhang noted that China is Australia's second
largest trading partner with over USD 20 billion in
bilateral trade in 2004, double the 2002 amount. Two-
way investments are also increasing with Australia
investing in natural resources and insurance in China,
while PRC firms invest in minerals, mining and energy
projects in Australia. Zhang noted that a 25-year
PRC-Australia liquefied natural gas (LNG) joint
venture project would make its first shipment of LNG
to China in June 2006. Turning to New Zealand, Zhang
said that the bilateral political relationship is
sound and the economic relationship is developing
steadily, with total bilateral trade standing at USD
2.7 billion. Dairy, timber, wool and agricultural
products make up the majority of PRC-New Zealand
trade.

FTA Benefits Abound?
--------------


4. (C) Responding to McGann's inquiry as to whether
China has seen any indirect benefits from the U.S-
Australia Free Trade Agreement (FTA),Zhang said China
had not studied the issue in depth but he guessed
China is probably enjoying some kind of benefit.

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Zhang noted that China is pursuing negotiations with
Australia and New Zealand on FTAs, assessing that
everyone will benefit from an increase in FTA's as
they promote an overall opening of global trade.

China is Promoting Stability and Providing Assistance
-------------- --------------


5. (C) McGann commented that the lack of good
governance in some Pacific Island nations, made worse
by the lack of resources and underdeveloped economies,
is an important issue for the United States. The
United States is concerned that good governance is
undermined by the competition between Mainland China
and Taiwan over diplomatic recognition and apparent
attempts to woo local vested interests. Zhang
responded by stating China's policy in the Pacific
Islands is to promote peace, stability, economic
development and common prosperity in the region.
China adheres to the policy of equality in relations
with the Pacific Island nations and supports their
efforts to maintain stability and promote the regions
economic development. China is willing to contribute
to these efforts by providing technical and economic
assistance with no political preconditions attached.
Zhang noted China's assistance is focused on
infrastructure and social projects, like schools,
bridges, hydropower stations, stadiums and sports
facilities.

Lashing out at Taiwan's "Money Diplomacy"
--------------


6. (C) Zhang said that while China seeks a stable and
healthy bilateral relationship with each Pacific
Island nation, Taiwan's "money diplomacy" is a majo
source of instability in the region. The recent
violent political upheaval in the Solomon Islands is
one example. Noting that China does not have
diplomatic relations with the Solomon Islands, Zhang
claimed Taiwan has close relations with politicians
there and said he had heard reports that Taiwan
influenced the formation of the recent short-lived
government of Prime Minister Snyder Rini by bribing
local officials and this was a key cause of the recent
riots targeting resident Chinese. Zhang said China is
absolutely against such conduct, calling it
politically and economically "unhealthy." Zhang
argued that in order to achieve of stability and
realize good governance in the region Taiwan's "money
diplomacy" must be checked.

Clear Taiwan Issue & China Will Support Resource
Management
-------------- ---


7. (C) Zhang agreed with McGann that properly
managing natural resources would promote the
sustainable economic development of the Pacific Island
nations. For instance, China supports the development
of multilateral fishery regulations in the region.
However, the issue of Taiwan inevitably arises, Zhang
continued, insisting that Taiwan is province of China
and should not be given equal status in the
negotiation of a regional fishery resource agreement.
As soon as the Taiwan issue is "cleared up" then China
is ready to support the development of regulations to
ensure the sustainability of the island nations'
natural resources.

Evacuation the Only Solution to Solomon Islands
Trouble
-------------- --


8. (C) Asked by McGann to comment on the Solomon
Islands evacuation reported in reftels, Zhang said
Chinese citizens and non-Chinese citizens alike sought
asylum in police stations as their houses and business
burned and they faced an imminent threat to their
safety. China recognized the need to respond
promptly, Zhang contended, pointing out that the
voluntary evacuation of ethnic Chinese was the only
solution as the PRC has no officials or resources in

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Honiara. Zhang pointed out that the PRC also
evacuated over 100 people during large scale riots in
Honiara in 2000.

China Acting on a Humanitarian Basis?
--------------


9. (C) Expressing appreciation for China's evacuation
of an ethnic Chinese Amcit, McGann commended China for
helping PRC citizens and non-PRC ethnic Chinese,
pointing out that the United States also believes it
is important to protect refugees and other vulnerable
populations. McGann asked how China is handling
repatriation and resettlement issues of the evacuees.
Zhang said in deciding how to handle requests from
non-Chinese citizens, China just considered the
imminent danger they were facing and sought to
safeguard the life and safety of as many people as
possible. The evacuation was on a voluntary basis and
represented a temporary arrangement to relieve the
immediate threat. Most of the evacuees returning to
China are deciding to stay with families, while some
will likely choose to return to the Solomon Islands
after the situation stabilizes. Zhang said some of
the evacuees could not produce passports or other
proof of citizenship but insisted on taking the flight
to China. On a humanitarian basis, China allowed them
to board and now that they are in China, they are free
to go where they want.


10. (U) EAP Senior Advisor McGann cleared this cable.
SEDNEY