U.S.-CHINA ECONOMIC AND SECURITY REVIEW

UNCLAS SECTION 01 OF 04 BEIJING 002909

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV CH
SUBJECT: U.S.-CHINA ECONOMIC AND SECURITY REVIEW
COMMISSION DELEGATION MEETS MFA DDG XIE FENG


Summary
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1. (SBU) Chair Carolyn Bartholomew and a United
States-China Economic and Security Review Commission
delegation used a meeting with MFA North America
Deputy Director General Xie Feng to urge China to do
more to produce concrete results on key economic
issues, to allow American FDA inspectors to travel to
China to look into the wheat gluten case, to recognize
the growing sense of Taiwan identity, to get North
Korea to keep its commitments on the nuclear issue, to
persuade Sudan to address international concerns on
Darfur and to cooperate on the environment. Xie
outlined standard Chinese positions on bilateral
issues and stressed that China looks forward to
engaging Members of Congress, including Speaker of the
House Pelosi, to promote the bilateral relationship.
End Summary.

Xie's Overview of Bilateral Relations
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2. (SBU) A United States-China Economic and Security
Review Commission (USCC) delegation comprising Chair
Carolyn Bartholomew, Vice Chair Daniel Blumenthal,
Commissioner C. Richard D?Amato, Commissioner Jeffrey
Fiedler and Commissioner Larry Wortzel, joined by the
Political Minister Counselor, met on April 23 with
Ministry of Foreign Affairs (MFA) Department of North
American and Oceanian Affairs Deputy Director General
Xie Feng. Xie opened with an overview of bilateral
relations, saying the two sides have established an
excellent framework for the future. President Bush
and President Hu are in regular contact, as are other
senior leaders in the two governments. Trade volume
has increased 100 times since 1979, from approximately
USD 2.4 billion to USD 262 billion, although more
trade can sometimes mean more friction. Cooperation
on international issues including the DPRK, Iran and
Sudan, has made the global dimension of the
relationship more evident. The two sides still have
serious disagreements, especially involving Taiwan and
human rights. He urged the United States to stop
selling arms to Taiwan and oppose more clearly
separatist actions there. Xie recited familiar
Chinese positions on human rights, saying the current
situation is the best in Chinese history. Chair
Bartholemew responded that the United States remains
concerned about problems in China involving trade,
proliferation and human rights issues including
religious freedom, freedom of the press, freedom of
association and Tibet.

Strategic Economic Dialogue
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3. (SBU) Chair Bartholomew told Xie that for the
second round of the Strategic Economic Dialogue (SED)
in May, Americans need to see that China is delivering
results on its promises. Without progress on key
issues Congress may be forced to act. Xie said the
SED is supposed to focus on long-term, strategic
issues, but China understands that the United States
also needs to see concrete results. China is doing
its utmost to deal with these concerns. There were
concrete results in the first round of the SED,
although not as many as the American side may have
expected. It is necessary to keep expectations
reasonable, Xie said.

China's Consultations with Congress
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4. (SBU) Xie stated that China looks forward to
engaging Members of Congress, including Speaker of the
House Pelosi, to promote the bilateral relationship.
Chair Bartholomew welcomed this. She also encouraged
China, in the course of its SED-connected
consultations with Congress, to seek out the opinions
of a wide variety of Members, not just the people
China sees as its friends.

Wheat Gluten Case and FDA Visas
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5. (SBU) Chair Bartholomew expressed concern about
wheat gluten shipped from China that contaminated dog

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and cat food in the United States resulting in the
deaths of American dogs and cats. There are reports
that the wheat gluten may also have ended up in feed
for hogs and therefore potentially in pork products
that people in the United States are eating.
Inspectors from the United States Food and Drug
Administration are reportedly being denied visas to
travel to China and inspect the factories from which
tainted wheat gluten was allegedly shipped. China
should issue the visas immediately, she stressed. Xie
said he would look into the matter.

Taiwan
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6. (SBU) Vice Chair Blumenthal raised the issue of
the political situation on Taiwan. Beijing is
incorrect to suggest that the problem is the
activities of Chen Shui-bian and some small group of
"separatists." In realty, there has been a shift in
Taiwan and the people there have developed a sense of
Taiwan identity. Any leadership in Taiwan, regardless
of party, will have to be accountable to the people
and to their sense of Taiwan identity, he said. Xie
said that Beijing's view is that roughly a third of
the people in Taiwan want independence, another third
want the status quo and another third want
reunification. He said that the people in Taiwan,
including the third that may want independence, often
fall victim to a small group of pro-independence
radicals. China has noted that some previously ardent
pro-independence figures, including former DPP leader
Lee Teng-hui, have softened their positions.


7. (SBU) Xie said that Chen Shui-bian has shown that
he is a politician with no credibility who will do
anything to advance his personal causes, including
taking advantage of interest groups in the United
States and any lack of communication between
Washington and Beijing. Chen wants to create the
impression tat he has the implicit backing of the
United Sates which will always come to his rescue, no
matter what he does. United States Government
officials have made it clear, however, that this in
not the actual American policy, Xie stated.


8. (SBU) Vice Chair Blumenthal said an increasing
number of people in Taiwan do not believe that
Beijing's one-country, two-systems policy is a viable
option. Xie said that China wants to understand
Taiwan better, but that its correspondents have
encountered difficulties getting permission from
Taiwan authorities to report from Taiwan. Xie asked
that the United States encourage Taiwan to be more
open.


9. (SBU) Vice Chair Blumenthal reminded Xie that the
United States has commitments under the Taiwan
Relations Act of 1979. Xie said that China has been
voicing its opposition to the Taiwan Relations Act
since it was first passed and will continue to do so.

North Korea
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10. (SBU) Vice Chair Blumenthal asked if China
considers the DPRK to be in breech of the February 13
agreement reached through the Six-Party Talks and if
China will use its leverage to bring North Korea into
compliance. Xie stated that the Six-Party Talks
process has never been smooth. Although the closure
of the DPRK nuclear facilities at Yongbyon has been
delayed in connection with the Banco Delta Asia
situation, China is working with all sides and hopes
the issue will be resolved soon. Xie said that China
is a participant in the process, not a judge, so
China's focus is on moving things forward in a
practical way rather than making abstract
determinations about who is keeping their commitments.
China wants all parties to take the actions needed to
move the process forward.

Anti-Satellite Test
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11. (SBU) Commissioner Fiedler followed up by asking
about China's test of an anti-satellite missile in
January, asking why it took the PRC 10 days to respond

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to the United States' inquiries regarding the test.
Xie claimed that it took China three days to reply,
not 10. He said the issue had to go through China's
normal inter-agency clearance process. When
Commissioner Wortzel pointed out that such delays in
bilateral communication could call into question the
closeness of the United States relationship with
China, Xie responded by saying that because the test
was only scientific and did not represent a change in
Chinese policy, the PRC did not think that the test
would draw the negative attention that it did. It was
only after the international reaction that China began
working on a statement. In response to a question
regarding President Hu Jintao?s prior knowledge of the
test, Xie said that the decision to test the system
was made by the Chinese Government. Xie said he
believes President Hu must have participated in the
decision.

Arms Control
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12. (SBU) Commissioner Fiedler inquired about China's
system for arms control, asking if the MFA or the
Ministry of National Defense (MND) takes the lead on
the issue. Xie said arms control issues are handled
on an interagency basis, with the MFA taking the lead
on contact with the international community, the MND
handling implementation and the two Ministries
consulting with one another. It is not possible to
say one is more important than the other, Xie stated.

Sovereignty above the Earth?
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13. (SBU) Commissioner Wortzel inquired about China?s
understanding with regards to territorial sovereignty,
asking how far above the earth China believes its
sovereignty extends. Xie replied that he is not an
expert on legal issues and does not know the answer,
but he will work through Sun Ang of the Chinese
Embassy in Washington to try to provide a response.
He said he believe all countries should cooperate on
allow overflights of national territory for civil
purposes, although military and reconnaissance
overflights are a different matter.

Darfur
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14. (SBU) Chair Bartholomew urged China to do more to
influence Sudan on Darfur. Xie replied that China is
working on the issue with the Sudanese government.
President Hu raised the issue with President Bashir
when Bashir came to China for the Forum of China-
Africa Cooperation and when Hu visited Sudan.
Assistant Foreign Minister Zhai Jun again worked on
the Sudanese government when he visited Sudan, urging
Khartoum to be flexible and to comply with the UN
Security Council. China has seen positive results,
such as Sudan's as its acceptance of the second phase
of the Annan Proposal.


15. (SBU) Chair Bartholomew said there are credible
reports that some Sudanese military equipment used in
Darfur came from China. Xie said that China is trying
to do more, but the situation is complicated and
cannot be resolved overnight. The international
community believes that the Sudanese government should
comply with UN resolutions, but some opposition groups
have refused to sign on to the peace agreement, making
the government of Sudan less likely to cooperate. The
Sudanese government believes that all of the pressure
is on them, leading them to distrust in the
international process. AFM Zhai Jun visited Darfur
during his Sudan trip and reported that the situation
he encountered there was different from what many
international reports suggest. Chair Bartholomew
reminded Xie that the government of Sudan would have
been selective in what it allowed Zhai to see.

Environmental Issues
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16. (SBU) Commissioner D'Amato raised the issue of
energy and environment cooperation, noting Premier Wen
Jiabao's reported comments in Japan about the need for
a post-Kyoto approach to curbing carbon emissions.

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Xie said China is increasingly aware of environmental
issues. The eleventh five-year plan calls for
reducing the amount of energy needed to produce a unit
of GDP by 20 percent by 2010 and to cut emission of
major pollutants by 10 percent by 2010. China has a
great need for power and an interest in promoting
energy conservation. China is looking at increasing
its use of natural gas, hydro, solar, wind and nuclear
power to replace fossil fuels. Xie pointed out that
nuclear power accounts for 70 percent of power needs
in France but only two percent in China. He said that
China looks forward to cooperating with the United
States and Japan on the purchase of nuclear reactors
and with the United States on clean coal projects.


17. (U) The USCC delegation cleared this message.
RANDT