TRANSPORTATION SECRETARY PETERS' VISIT TO CIVIL

UNCLAS SECTION 01 OF 02 BEIJING 002748 SIPDIS SIPDIS TRANSPORTATION FOR X1, X40 USDOC FOR ITA/OCEA/MCQUEEN USDOC FOR ITA DAS KASOFF NSC FOR TONG, SHRIER E.O. 12958: N/A TAGS: EAIR ECON BEXP PGOV OVIP SECRETARY PETERS CH SUBJECT: TRANSPORTATION SECRETARY PETERS' VISIT TO CIVIL AVIATION MANAGEMENT INSTITUTE OF CHINA (CAMIC) ¶1. (U) Secretary of Transportation Mary E. Peters visited the Civil Aviation Management Institute of China (CAMIC) in Beijing on April 13 to deliver a speech on United States- China aviation cooperation. Tian Baohua, President of CAMIC, hosted the Secretary, and Minister Yang Yuanyuan of the General Administration of Civil Aviation of China (CAAC) delivered brief remarks. Secretary Peters' remarks were well-received by the more than 150 CAMIC students and United States industry representatives in attendance, and audience questions following the speech covered a wide range of issues, including aviation sector liberalization, Open Skies, and improving United States-China aviation cooperation. Growing Bilateral Aviation Relationship -------------- ¶2. (U) In his introductory remarks, CAMIC President Tian said the CAMIC event was significant for bringing together the representative of the largest aviation sector in the world with that of the fastest growing aviation sector. Tian stated that CAMIC maintains a positive attitude towards further opening of China's aviation sector and trains mid-level and top-level civil servants in aviation management and safety. According to Tian, China's aviation sector has grown by 16.2 percent annually since 2002. ¶3. (U) CAAC Minister Yang lauded the long-term cooperation between the United States and China on civil aviation issues, and thanked representatives from both the government and private sector for attending the event. With rapidly growing passenger and cargo volumes, China's aviation sector will need even more top quality civil aviation professionals in the future, Yang said, and CAMIC will help supply that need. Yang stated that China's safety record is improving, and CAAC also places a high priority on economic concerns such as macro-policy controls, macro-oversight and deregulation. Questions on the Way Forward -------------- ¶4. (U) Following the Secretary's speech, an attendee from the Air China Group asked about the perceived gap between American and Chinese carriers, while another asked why there are more United Airlines flights to China than there are Chinese carriers traveling to the United States. Secretary Peters said that the development of China's SIPDIS international aviation markets will depend largely on allowing the market and demand to determine flight routes rather than implementing artificial restrictions that inhibit market growth. She said that American carriers are using more of their allocated slots to fly to China than their Chinese counterparts are using to fly to the United States, but the Department of Transportation would "like nothing better" than to see more Chinese flights to the United States. ¶5. (U) American attendees asked Minister Yang his views on China's progress in general aviation, handling fees at airports, and Open Skies. The Minister acknowledged that China's progress in general aviation has been slower due to China's status as a developing economy, China's restrictions in its aerospace policy, and CAAC's own management policy. On high handling fees at airports, he said he would like to study the matter as fees are not uniform. He cautioned, however, that while international airlines pay higher handling fees than domestic airlines, they do not pay the same 5 percent surcharge required for local carriers. Yang said there remain some obstacles to reaching an agreement on Open Skies with the United States, but Open Skies is a goal that China will continue to work on. United States Participants -------------- ¶6. (U) United States Government attendees at the Secretary's speech at CAMIC on Friday, April 13 were: SIPDIS Secretary of Transportation Mary E. Peters SIPDIS Deputy Chief of Mission David Sedney Assistant Secretary for Aviation and International Affairs Andrew Steinberg BEIJING 00002748 002 OF 002 Deputy Chief of Staff Simon Gros Assistant to the Secretary for Policy Jana Weir Assistant to the Secretary for Public Affairs Sarah Echols Special Assistant to the Secretary for Scheduling and Advance Brooke Evans Embassy Economic Section Trade and Investment Policy Unit Chief Eric Madison Embassy Economic Officer Matthew Murray (note taker) Embassy Economic Officer Kamal Latham Embassy Economic Officer Brian Klein Embassy Economic Officer Michael Pignatello Chinese Participants -------------- ¶7. (U) Chinese Government attendees included: Minister of General Administration of Civil Aviation of China (CAAC) YANG Yuanyuan CAAC Director General of International Affairs and Cooperation LI Jiangmin CAMIC President TIAN Baohua CAMIC Party Secretary WEI Jincai ¶8. (U) Secretary Peters' delegation has cleared this report. RANDT