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