CHINESE AMBASSADOR ON US-PRC SUB-DIALOGUE ON

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 002043 SIPDIS SIPDIS NSC FOR DFISK AND DTOMLINSON E.O. 12958: DECL: 07/08/2021 TAGS: OTRA PREL ETRD PGOV CH JA KS VE SUBJECT: CHINESE AMBASSADOR ON US-PRC SUB-DIALOGUE ON VENEZUELA REF: A. STATE 70035 ¶B. BEIJING 7116 ¶C. BRIDGETOWN 1139 ¶D. MONTEVIDEO 570 ¶E. OTTAWA 1996 ¶F. QUITO 1578 ¶G. SANTIAGO 1224 ¶H. STATE 78808 CARACAS 00002043 001.2 OF 003 Classified By: WILLIAM R. BROWNFIELD, AMBASSADOR, for Reason 1.4(b). ¶1. (C) Summary: Ambassador met July 6 with PRC Ambassador Jiu Yijie to discuss A/S Shannon's meetings in Beijing last April (ref a). Ambassador walked Jiu through the PRC-Venezuela relationship, which is focused on energy, raw materials, and commercial issues. Ambassador suggested our two countries work to avoid surprises on Venezuela, including closer consultation on energy and commercial issues as well as on PRC military sales. Jiu responded more positively to the energy and commercial points, less so on the military sales point, and promised to check with Beijing about further consultations between our Caracas embassies. Jiu, who is remarkably knowledgeable on Latin America for a PRC diplomat, has a close relationship to Chavez and the BRV and is wary of close contact with the U.S. Embassy. We will nevertheless continue to hammer on him and his embassy for continued dialogue, if anything to annoy the Bolivarian Gentleman. End summary. ¶2. (C) After more than two months of false starts worthy of a Monty Python episode, Ambassador finally met July 6 with PRC Ambassador Jiu Yijie to discuss sub-dialogue on Venezuela and A/S Shannon's now-not-so-recent visit to Beijing. This was Ambassador's first meeting with Jiu since a courtesy call in 2004. Jiu attended our July 4 event, as Ambassador did his national day. But Jiu has been reluctant to meet formally; sensing perhaps that the mischievous US Ambassador knows Chavez will learn of the meeting and draw his own conclusions. ¶3. (C) Jiu opened by saying how much he respected the professionalism of the U.S. Embassy in Caracas under trying circumstances. Just recently, in a meeting with some National Assembly deputies, he had sung the Ambassador's praises. The deputies were delighted and opined that they would love to meet the Ambassador. Ambassador noted modestly that the last time one of the three deputies had mentioned him in public, she had suggested he was planning to invade Venezuela, none of the three had ever accepted a request for a meeting, and the only deputies who had met with him over the last eight months had done so in the context of visiting dignitaries from Washington. Jiu expressed diplomatic sympathy. ¶4. (C) Ambassador shifted the conversation to the US-China sub-dialogue on Latin America. He noted that we thought A/S Shannon,s April discussions in Beijing were excellent, the subsequent follow-up with Ambassador Zhou in Washington went well, and we hoped to engage in another round soon. Jiu said this matched his own reports from Beijing. He noted that Amb. Zhou was a friend and former boss, and knows the Latin America region well. ¶5. (C) Ambassador offered five observations from the sub-dialogue discussions, and requested Jiu's reactions: -- Our assessment was that Chinese focus in the region was economic, commercial, and raw materials. In Venezuela specifically, it was petroleum. Jiu agreed. China had no interest in a political, military, or strategic relationship with Venezuela. -- We thought that as more and more Chinese state entities opened operations in Venezuela, Jiu's bureaucratic task was complicated, making it sometimes difficult for him to maintain a coherent policy approach. Jiu agreed. He noted that the Chinese energy and construction sectors were now engaged in many different enterprises in Venezuela, they were often not coordinated at all, and sometimes were in conflict. CARACAS 00002043 002.2 OF 003 In fact, he could not coordinate them, even if he wanted to. -- Ambassador's perception was that China recognized that Latin America, and Venezuela in particular, were regions of great importance to the United States. China was not looking for confrontation in the region. Jiu agreed emphatically. He said that was a matter of official PRC policy. His instructions in Venezuela were to navigate a policy that avoided provoking either United States or Cuba. -- We understood that China did not agree with Chavez, confrontational approach to the United States, and sought to restrain him at times. Jiu said it was so. He would not be confrontational with the BRV, but did note at appropriate opportunities that China could not associate with Chavez' U.S.-bashing. -- Finally, Ambassador said he understood that China was frustrated with some of its investment and commercial activities in Venezuela. Jiu said that was true. While they had no intention of withdrawing or even reducing their portfolio, their difficulties in dealing with PDVSA and subsidiaries made many Chinese companies reluctant to consider additional investment in Venezuela. ¶6. (C) Having reached such excellent common understanding on Venezuela, Ambassador suggested several ways we could work to reinforce the US-PRC sub-dialogue process in Venezuela. -- First, we should avoid surprises. If we were about to do something that would interest the other in Venezuela, we should consult in advance. Jiu agreed. Ambassador suggested China's decisions to sell a communications satellite and military radar systems were examples of the sorts of things where we would appreciate an advance consultation with the PRC. Jiu was quietly pensive. -- Second, we should be very transparent in our transactions with the BRV. Whether commercial, military, political, or social, concluding agreements with Chavez in secrecy fed suspicions and misunderstanding. Jiu agreed. -- Third, Ambassador said that while we accepted that China had legitimate commercial interests in Venezuela, we hoped China would be extremely careful and reluctant to engage in security issues here. Jiu thought that made sense. Ambassador noted that this worked in reverse as well. For example, it was not helpful for China to remain silent after Chavez announced publicly his intent to purchase military aircraft and ships from, or sell F-16 aircraft to, China, particularly if the statements were false. -- Fourth, the one common interest shared by the United States and China in Venezuela was energy. China had many energy players in Venezuela, as did we. It made sense for us to stay in touch on this. Ambassador suggested it did not have to be at the level of the two ambassadors. We both had petroleum experts in our embassies. How about a systematic exchange of information? Jiu said he would think about all the Ambassador's ideas and consult with Beijing. Ambassador suggested it would be helpful for us to be ready to address these ideas by the time of the next U.S.-China sub-dialogue on Latin America. ¶7. (C) AMBASSADOR'S COMMENT. In my 27 years in Latin America, Jiu is the best Chinese diplomat I have dealt with. In two years, I have met with him twice, and talked to him briefly four other times. He speaks Spanish well. He understands Latin American culture. He has wide experience in the region. He is very careful with me, holds me at arm's length, and clearly does not intend to give anything away for free. He correctly assesses that our meetings are higher risk for him than for me. He has a relationship with Chavez; his are among the favored foreign economic players in Venezuela today; and he holds a strategic card that Chavez wants to play. For these very reasons, I will keep hammering away at Jiu and his embassy. If we can work up regular consultations, we may be able to influence some Chinese activity in Venezuela. And even if we cannot, just meeting with the Chinese will make Chavez' paranoid mind suspect the CARACAS 00002043 003.2 OF 003 worst. BROWNFIELD