MFA SAYS PRC CENTRAL GOVERNMENT HAS "AUTHORIZED"

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 004811

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STATE FOR EAP/CM
STATE FOR EB/TRA/OTP DAYTON/MILLER
STATE FOR ISN LEHRMAN/INGRAM
STATE FOR EAP/EX CHRISTENSEN
DOE/NNSA FOR HUIZENGA/MUSTIN
DHS/CBP FOR FUJIMURA

E.O. 12958: DECL: 12/21/2031
TAGS: PREL ETRD HK CH
SUBJECT: MFA SAYS PRC CENTRAL GOVERNMENT HAS "AUTHORIZED"
HKG TO DISCUSS SFI WITH U.S. AND ASSERTS PRECEDENT-SETTING
AUTHORITY

REF: A. HONG KONG 4744

B. HONG KONG 4659

C. HONG KONG 4611 (AND PREVIOUS)

Classified By: CONSUL GENERAL JAMES B. CUNNINGHAM, FOR REASONS 1.4 (B)
AND (D)


1. (C) Deputy Commissioner Xie Xiaoyan of the PRC Ministry of
Foreign Affairs office in Hong Kong called in DPO Sakaue on
December 19 to inform us under instructions that the Central
Government had "authorized" the Hong Kong Government to
engage in "negotiations" or "discussions" with the United
States to determine the extent to which Hong Kong would be
able to participate in the Secure Freight Initiative (SFI)
that had arisen from the SAFE Port Act. Glancing at a
prepared text, Xie told us the PRC "supports the objectives
of SFI" and has engaged in "close and fruitful" cooperation
with the USG on other programs to prevent terrorism or
proliferation. The Central Government also "is very
supportive of Hong Kong's autonomy as provided for under the
Basic Law and the principle of 'One Country, Two Systems.'"
The U.S. SFI proposal, however, is "not a simple issue
concerning economics, trade and shipping, as it involves the
political security of international trade, terrorism and
proliferation." Thus, it is an issue that falls under the
jurisdiction of the Central Government; the United States
should have first raised the SFI proposal with the Central
Government, and then taken it up with the Hong Kong Special
Administrative Region Government (HKSARG),Xie claimed. He
suggested that the USG give adequate consideration to PRC
views when making proposals and noted that prior consultation
is both "helpful and conducive" to discussions.


2. (C) When DPO pressed Xie to clarify the nature of
Beijing's concerns, Xie said particular concerns were
"political" in nature, as there are "symbolic aspects of
sovereignty" involved in the USG proposal. The PRC would
have "preferred" that the U.S. take this into account and
consulted Beijing first, he reiterated.


3. (C) "Speaking personally," Xie noted that the USG and PRC
had been working on the Megaports Initiative for some time.
He then suggested that the U.S. stay focused on the Megaports
projects in mainland China and Hong Kong, instead of
launching additional initiatives, like SFI, which entails
radiation detection, imaging of containers' contents and
recognition of containers' identifying numbers, recorded as
part of a consolidated process. Asked why, Xie said that
getting the Central Government's approval for any program
like this was a complicated bureaucratic process requiring
coordinating the views of multiple PRC government agencies,
which tend to resist new ideas that they don't understand.
Once the agencies were on-board, the State Council also had
to approve. PRC agencies now understand and support
Megaports, said Xie, so expansion of this program would be
easier. He noted again, however, that he was giving his
personal views and that Beijing had authorized Hong Kong to
explore its limited participation in the SFI program.


4. (C) Comment: Xie delivered his message in a positive and
low-key way, focusing on the fact that the PRC Central
Government had considered the issue and, recognizing the
importance of counterterrorism cooperation, "authorized" the
HKSARG to proceed in holding discussions with the USG.
Though he softened the PRC's assertion of jurisdiction and
authority in this matter by using words like "would prefer"
(that the USG first consult with Beijing on such issues),the
message was clear and troubling. When we responded that we
consider SFI to be an issue of port security and trade and
therefore under the HKG,s purview, Xie admitted that under
the "One Country, Two Systems" framework, "sometimes the line
is not very clear." While Hong Kong Chief Executive Tsang
had alerted the Consul General to Beijing,s interest in the
issue (Ref C),the MFA,s message suggests a significant new
assertion of authority. In launching the Container Security
Initiative, and in our discussions to date on Megaports, we
have worked directly with the Hong Kong Government without
reference, to our knowledge, to separate discussions on the
same subjects with the PRC. With the Central Government,s

HONG KONG 00004811 002 OF 002


statement that it has "authorized" the HKSARG to engage
substantively on SFI (which prompted HKG CITB Permanent
Secretary Choi's Ref A message),the PRC has laid down a

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precedent-setting claim of authority in a new policy area.
As we consider how to respond, we will be seeking Hong Kong
Government views on the central government,s apparent
attenuation of Hong Kong,s authority in this area, as well
as further clarification from the MFA Commissioner's Office.
Cunningham