C O N F I D E N T I A L TOKYO 002440

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/01/2011
TAGS: PREL EIND ETRD XR XK LA KS CH JA
SUBJECT: CORRECTED COPY: JAPAN-KOREA-CHINA TALKS ON LATIN
AMERICA: JAPANESE READOUT


Classified By: Pol MinCouns Mike Meserve for Reasons 1.4 b/d


1. (C) Summary. In strategic bilateral talks on April 26
with China on Latin American and Caribbean Affairs, followed
by China-Japan-Korea Consultations on the same subject:

-- China stated its desire to double trade with the region by
2010;

-- China described its policy as based on three pillars: 1)
advancing mutual political understanding; 2) seeking win-win
commercial relationships; and 3) promoting
cultural/educational exchanges;

-- Japan, China and South Korea explored ways to collaborate
on spreading East Asian influence and enhancing business
opportunities for East Asian companies in Latin America; and

-- Japan, China and South Korea agreed to hold similar
consultations in 2007. End summary.


2. (C) Japanese Director General for Latin America and
Caribbean Affairs Mitsuo Sakaba met with his Chinese
counterpart, Director General for Latin American and
Caribbean Affairs Gang Zeng, on April 26 to discuss topics of
strategic common interest for the two countries in Latin
America. It was the second such bilateral on Latin America.
Later the same day the two were joined by their South Korean
counterpart Han Byung-ki for the first-ever China-Japan-Korea
Consultations on Latin American and Caribbean Affairs. On
April 28, the bureau's Tasushi Ryosenan provided a readout of
the meetings, prefacing his remarks with the comment "There
was not so much new, but the talks were interesting." China
began the bilateral talks by noting that commercial exchanges
have been growing by 40-50 percent annually for the past four
years, and said China hopes to double trade with Latin
America by 2010 from the current $50 billion per year, or
currently 4.2 percent of China's overall foreign trade,
according to Zeng.


3. (C) DG Zeng described China's three pillars in Latin
America policy as: 1) advancing mutual political
understanding; 2) seeking win-win commercial relationships;
and 3) promoting cultural/educational exchanges according to
Sakaba. Zeng told Sakaba that China has signed nine
investment agreements in the region, six bilateral commercial
agreements, and been designated a market economy country by
15 countries. Despite recent growth, China still faces
problems of distance, language, labor issues, and a trade
cycle it deems as too long, according to Zeng. Additionally,
since China's emerging economy often produces products that
compete with exports from Latin America, trade friction in
some sectors remains, and some countries have created
anti-dumping laws aimed at China. Acknowledging Japan's
deeper historical ties with the region, Zeng asked for

Japanese collaboration on opening Latin American markets to
East Asia.


4. (C) China is sending 125 peacekeepers to Haiti -- a first
for China in Latin America -- despite Haiti's recognition of
Taiwan, Zeng told Sakaba. China is doing so out of a feeling
of responsibility as a permanent member of the UN Security
Council. (Zeng also commented briefly on China's PKO
involvement in Sudan, Iraq and East Timor.)


5. (C) China's relationship with Venezuela has been upgraded
to a strategic partnership following the May 2001 visit of
President Chavez to Beijing, Zeng noted. Since that time
there have been many high-level exchanges. While China buys
Venezuelan oil, it is a very heavy oil that requires
high-tech refining in China to be marketable. Zeng explained
that China takes U.S.-Venezuela frictions into consideration,
but the U.S. relationship with Venezuela is not a decisive
factor in policy making.


6. (C) During the trilateral talks, Sakaba, Zeng and Han
discussed possible areas of trilateral cooperation to spread
East Asian influence in Latin America and to improve business
conditions there. Possible avenues of greater collaboration
discussed included Asian cultural events, trade fairs,
symposiums and the Forum for East Asia Latin America
Cooperation (FEALAC). Zeng asked for Japan's support in
obtaining membership in the Inter-
American Development Bank, which Sakaba promised. Zeng also
explained that China's policy on military cooperation in the
region was based on non-intervention, i.e., China does not
export offensive weapons, only medical equipment or materiel.


7. (C) Ryosenan reported the three countries agreed the talks
were beneficial, and agreed to hold another round in 2007,
most likely in South Korea.
DONOVAN