Identifier
Created
Classification
Origin
06BEIJING9290
2006-05-16 10:49:00
UNCLASSIFIED
Embassy Beijing
Cable title:  

MAY 16 MFA PRESS BRIEFING: IRAN, SCO, U.S.- CHINA

Tags:  PREL PARM ECON CH IR KN JP 
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UNCLAS SECTION 01 OF 03 BEIJING 009290 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PREL PARM ECON CH IR KN JP
SUBJECT: MAY 16 MFA PRESS BRIEFING: IRAN, SCO, U.S.- CHINA
MILITARY RELATIONS, U.S. PRC BANK SANCTIONS, CHINA-JAPAN
ECS CONSULTATIONS, ZHAO YAN, RMB, SINGAPORE, MERKEL'S
VISIT, CHINA-ARAB COOPERATION FORUM


Summary
-------

UNCLAS SECTION 01 OF 03 BEIJING 009290

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PREL PARM ECON CH IR KN JP
SUBJECT: MAY 16 MFA PRESS BRIEFING: IRAN, SCO, U.S.- CHINA
MILITARY RELATIONS, U.S. PRC BANK SANCTIONS, CHINA-JAPAN
ECS CONSULTATIONS, ZHAO YAN, RMB, SINGAPORE, MERKEL'S
VISIT, CHINA-ARAB COOPERATION FORUM


Summary
--------------


1. Key points made at the May 16 MFA press briefing
are as follows:

- Beijing appreciates the positive efforts of the EU-3
to resolve the Iran nuclear issue through dialogue.

- The Shanghai Cooperation Organization (SCO) has
invited leaders from all observer nations to attend
the mid-June SCO Summit in Shanghai and China welcomes
Iran's attendance.

- China is positively considering Admiral Fallon's
invitation to observe the U.S. military exercise in
Guam.

- Asked about Washington's reported discussion of
sanctions against some Chinese banks involved in
illicit business activities with the DPRK, the MFA
spokesperson expressed opposition to sanctions or the
application of pressure in handling these issues.

- The fifth round of China-Japan consultations on the
East China Sea will be held May 18 in Tokyo and the
decision whether to hold a foreign ministers' meeting
in Qatar depends on consensus reached during bilateral
discussions.

- The MFA spokesperson had no specific information to
offer on the case of detained NYT researcher Zhao Yan.

- China is reforming its exchange rate regime in line
with President Hu Jintao's statements during his April
trip.

- The spokesperson denied any link between Singaporean
Minister Mentor Lee Kwan Yu's May 10-17 visit to China
and KMT Chairman Ma Ying-jeou's recent trip to
Singapore.

- the first flight of the JF-17 "Xialong," a new
light-weight fighter jet prototype reportedly
developed jointly by China and Pakistan, took place on
April 28 in Chengdu.

- German Chancellor Angela Merkel will visit Beijing
and Shanghai May 21-23.

- Beijing will host the second China-Arab Cooperation
Forum Ministerial Meeting May 31-June 1. End Summary.

Iran Nuclear Issue
--------------


2. Beijing has not yet received the official text of
the EU-3 proposal but appreciates the positive efforts
of the EU-3 to resolve the Iran nuclear issue through

dialogue, Spokesperson Liu Jianchao stated during the
regular May 16 MFA press briefing in response to the
Kyodo correspondent's question on the EU plan. China
hopes the European countries will present a rational,
comprehensive and balanced proposal that is conducive
to the realization of nonproliferation objectives,
considers Iran's concerns and helps talks resume
promptly. Asked to comment on the Iranian Foreign
Minister's reported rejection of the EU-3 plan, Liu
called on the relevant parties to make constructive
efforts to launch a "new round of diplomacy" and
positively respond to the proposal. These actions
will promote diplomatic efforts and create conditions
for a dialogue between the EU-3 and Iran. Beijing
will send a representative to attend the upcoming P-5
plus one meeting in London and China remains in close
contact with Iran, Liu said.

SCO Foreign Ministers Meeting, Iran Invited to Summit
-------------- --------------


3. Liu announced that the Shanghai Cooperation

BEIJING 00009290 002 OF 003


Organization (SCO) Summit will be held in Shanghai in
mid-June. The SCO has launched an official website,
www.scosummit2006.org, to offer information in
Chinese, English and Russian on the June Summit.
Asked whether Iran will attend the SCO Summit, Liu
stated that based on the consensus reached by SCO
members, leaders from all observer nations will be
invited. China will respect these countries'
decisions and welcomes Iran's attendance, Liu said,
but would not confirm which countries have already
accepted the invitation. Liu reported that the May 15
SCO Foreign Ministers' Meeting in Shanghai laid the
foundation for the Summit and that the Foreign
Ministers discussed security, humanitarian and other
areas of cooperation. They also reached a broad
consensus on counterterrorism efforts.


China Considering U.S. Invitation on Military Exercise
-------------- --------------


4. Asked for China's response to Admiral Fallon's
invitation to the PLA to observe a U.S. military
exercise in Guam, Liu commented hat China welcomes
U.S. efforts to promote mutual understanding and
relations between the two militaries. China is
positively considering the U.S. invitation, he said.

U.S. Sanctions on PRC Banks Involved with the DPRK
-------------- --------------


5. Questioned by the AP correspondent about
Washington's reported discussion of sanctions against
Chinese banks linked to DPRK proliferation and other
illicit activities, Liu asserted that the Chinese
Government has taken a "clear and resolute" position
on nonproliferation. Beijing opposes the
proliferation of weapons of mass destruction in any
form and stands against any entity that conducts such
activities. However, China consistently opposes using
sanctions or types of pressure to handle these issues.

China-Japan East China Sea Consultations
--------------


6. Liu announced that the fifth round of China-Japan
consultations on the East China Sea will be held May
18 in Tokyo and attended by MFA Asian Affairs
Department DG Hu Zhengyue and his Japanese
counterpart, Kenichiro Sasae. The consultations will
help expand consensus and narrow bilateral
differences, but there is still a major gap between
the two countries' positions. Remarking that this is
a complicated issue, Liu said there is no expectation
of a breakthrough during the upcoming round of talks.
China, nonetheless, will maintain a positive attitude
in order to reduce differences. Queried about the
possibility of the Chinese and Japanese Foreign
Ministers' meeting on the sidelines of the Asia
Cooperation Dialogue (ACD) in Qatar, Liu remarked that
the officials should "not meet for the sake of
meeting." China hopes that bilateral consultations
will lead to a consensus on this issue, he said,
stressing that the decision whether to conduct the
meeting depends on the results of consultations.
Beijing and Tokyo maintain unimpeded channels of
communication and will remain in contact on the issue.

Detained NYT Researcher Zhao Yan
--------------


7. Asked about reported new charges brought against
detained New York Times researcher Zhao Yan, Liu said
that in the past he inquired into the case but
currently has no specific information to offer, adding
that the question should be referred to the relevant
authorities.

Exchange Rate Reform
--------------


BEIJING 00009290 003 OF 003



8. Asked about the recent appreciation of the RMB,
Liu stated that the currency exchange rate has
appreciated by 3.4 percent against the USD since last
year. The value of the RMB versus the USD has both
risen and decreased, reflecting both changes in the
major global currencies and the RMB's resilience.
China is reforming its exchange rate regime in line
with President Hu Jintao's statements during his April
trip, according to Liu.

Lee Kwan Yu's Visit
--------------


9. Asked about the link between Singaporean Minister
Mentor Lee Kwan Yu's visit to China and KMT Chairman
Ma Ying-jeou's recent trip to Singapore, Liu denied
any connection between the two events, noting that MM
Lee's May 10-17 trip was planned far in advance. Lee
met with Premier Wen Jiabao and Vice President Zeng
Qinghong. Liu said Lee assessed positively the state
of China-Singapore relations as well as China's
economic and social achievements, reiterating
Singapore's commitment to its one-China policy.

China and Pakistan Launch New Fighter Jet Prototype
-------------- --------------


10. Asked about the recent flight of an aircraft
reportedly developed jointly by China and Pakistan,
Liu confirmed that the first flight of the JF-17
"Xialong," a new light-weight fighter jet prototype,
took place April 28 in Chengdu. China and Pakistan
maintain longstanding aviation cooperation and will
remain in contact on further joint projects in this
field, he stated.

Chancellor Merkel to Visit
--------------


11. Liu reported that German Chancellor Angela Merkel
will visit Beijing and Shanghai May 21-23. She will
meet President Hu and Premier Wen and hold a joint
press conference. Asked what types of economic deals
are planned and whether Merkel will discuss the high-
speed Maglev rail project, Liu noted that Chancellor
Merkel will attend a high-tech cooperation forum and
sign a series of agreements and contracts. In 2005
Germany-China trade reached 63.2 billion USD,
comprising one third of total China-EU trade. China
has achieved breakthroughs in the development of the
Maglev, in which China is prepared to cooperate with
Germany.

China-Arab Cooperation Forum
--------------


12. Beijing will host the second China-Arab
Cooperation Forum Ministerial Meeting May 31-June 1,
Liu noted. Chinese and Arab foreign ministers and the
Arab League Secretary General will attend the meeting,
which will discuss the "new China-Arab partnership."
MFA West Asia and North African Affairs Department DG
Zhai Jun will preview the forum to the press on May

17.
RANDT