AMBASSADOR DISCUSSES REGIONAL ISSUES WITH

C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 005064

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/02/2032
TAGS: PREL PGOV ECON SENV PHUM CH JP AS KS KN
SUBJECT: AMBASSADOR DISCUSSES REGIONAL ISSUES WITH
AUSTRALIAN AND JAPANESE COUNTERPARTS


Classified By: Ambassador Clark T. Randt, Jr.
Reasons 1.4 (b) and (d).

Summary
--------------


1. (C) Canberra wants to be "in the loop" regarding
discussions of a Northeast Asia Peace and Security
Mechanism (NEAPSM),given that Australia is likely to
be drawn into any conflict in the region, Australian
Ambassador to China Geoff Raby told Ambassador Randt
and Japanese Ambassador Yuji Miyamoto August 2.
Ambassador Raby noted Chinese concerns about
quadrilateral talks among Australia, India, Japan and
the United States, but Ambassador Miyamoto thought
such questions were "normal" and not a problem, given
that China is involved in its own groupings like the
Shanghai Cooperation Organization (SCO). Chinese FM
Yang Jiechi discussed the "fragile and dangerous"
cross-Strait situation with Japanese FM Taro Aso in
Manila, Miyamoto said. Beijing seems "genuinely
worried" about the current cross-Strait situation,
Ambassador Raby noted. Japan is willing to discuss
all issues in normalization talks with the DPRK,
including compensation, but North Korea must agree to
solve the abductions problem, Miyamoto said. While
expressing concern about Chinese military intentions,
Miyamoto stressed that these worries should not affect
political and economic relations with China. The
Australian Defense Minister had a "convivial" visit to
China but "learned nothing," Raby lamented. Climate
change will be an important topic on the APEC agenda,
with Australia hoping for Chinese support given
Beijing's interest in dealing with environmental
issues as a way to ensure domestic stability.
Miyamoto was pessimistic about China's ability to deal
with mounting domestic problems. The August 30
Australia-China human rights dialogue was productive,
Raby said, noting that in recent years China has
shifted from denying problems to providing
explanations for why problems exist. Foreign Minister
Taro Aso is likely to be promoted to an "important new
job" if Prime Minister Abe reshuffles his cabinet,
Miyamoto said. End Summary.

Northeast Asia Peace and Security Mechanism
--------------


2. (C) Canberra is paying close attention to
discussions on a Northeast Asia Peace and Security
Mechanism (NEAPSM) as part of the Six-Party Talks and
wants to be "kept in the loop," Australian Ambassador
Geoff Raby told Ambassador Randt and Japanese
Ambassador Yuji Miyamoto at an August 2 lunch at the
Australian Embassy. Ambassador Raby said Australia's
"working hypothesis" is that it would be drawn into
any conflict in Northeast Asia, given its security
alliance with the United States, as well as with
Japan, not to mention its huge economic and trade
interests in the region. Australia therefore has
asked China to include it at an "early date" in NEAPSM
discussions. Canberra's Ambassadors in Washington and
Tokyo will make similar requests soon, and Foreign
Minister Downer plans to make NEAPSM a "big issue"
during bilateral meetings on the margins of APEC.
Ambassador Raby said his "personal opinion" was that
the region needs some sort of security mechanism that
does not have ASEAN at the center. He said Chinese
counterparts have told him that they are supportive of
a regional security mechanism, but they hope that
ASEAN will continue to play a central role in it.


3. (C) Ambassador Miyamoto urged caution on NEAPSM,
noting that in light of current regional
"uncertainties," Tokyo's primary concern is how any
multilateral mechanism would affect current alliances.
The "lessons of history" demonstrate that the
scrapping of the UK-Japan bilateral alliance for the
Washington Treaty system prior to WWII was the
"beginning of Japan's downfall," Miyamoto stated,
emphasizing that no one wants a repeat of that "pre-
War drama." Ambassador Randt assured Miyamoto that
Washington's intention regarding the NEAPSM is to
complement, not replace, our existing alliance
relationships. Despite Japanese reservations,
Ambassador Miyamoto said his "personal view" is that a
multilateral mechanism is the "only way" to deal with
China's growing power. In light of China's strength

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and stunning economic growth, if the PRC were to
become a threat in the future, the power of just one
country, even that of the United States, would be
insufficient as a counterbalance. The only way to
influence China and ensure regional security,
therefore, is to create some sort of multilateral
body.

PRC Concerns over Quad, Australia-Japan Defense Ties
-------------- --------------


4. (C) Ambassador Raby asked about the PRC reaction to
quadrilateral talks among Australia, India, Japan and
the United States, noting that the Chinese often raise
the subject with him. Ambassador Randt replied that
MFA counterparts routinely raise the Quad discussions
and inquire as to the intentions of the talks.
Ambassador Miyamoto thought China's questions about
the Quad were "normal" and not a cause for concern.
China pursues its own interests by participating in
groups such as the Shanghai Cooperation Organization
(SCO),in part to offset U.S. influence in Central
Asia. Beijing did not consult with anyone before
developing relations with African countries, which it
knew would impact others. Although we should be
careful not to pursue confrontation with China,
Miyamoto said groupings such as the Quad were
"necessary" for dealing with Beijing. Chinese
apprehension about the Quad came up often during the
recent visit of the Australian Defense Minister, Raby
said. Turning to the new Australia-Japan security
mechanism, Ambassador Raby said the Chinese Government
has yet to raise it with him, although PRC think tanks
often bring it up. Ambassador Miyamoto said the
Chinese have not discussed the subject with him.

Taiwan
--------------


5. (C) Chinese Foreign Minister Yang Jiechi "for the
first time" raised Taiwan with Japanese FM Taro Aso in
Manila, Ambassador Miyamoto said. Previously, Beijing
did not seem overly concerned with Japan's position on
Taiwan. In Manila, however, FM Yang lectured Aso at
length about the "fragile and dangerous" cross-Strait
situation. The Chinese frequently lecture Australia
on Taiwan, Ambassador Raby said, observing that
Beijing seems "genuinely worried" about the current
situation. Beijing has also been "in overdrive" in
stating concerns about Taiwan's status at the upcoming
APEC meetings. Ambassador Miyamoto said China had
"learned a lesson" from previous Taiwan crises and has
been careful this time in its public comments on
Taiwan. Miyamoto nevertheless acknowledged that
domestic pressure within China could push Beijing
toward taking a more aggressive stance.

North Korea, Six-Party Talks, Japanese Abductees
-------------- ---


6. (C) Even though all parties were on their "best
behavior" at the last round of Six-Party Talks,
especially the North Koreans, a great deal of
difficult work on core issues remains unresolved,
Ambassador Miyamoto commented. Pyongyang is sure to
raise new subjects and "play tricks" at some point,
including by bringing up light-water reactors as a
"bargaining chip," Miyamoto said. Nevertheless,
during the talks the Japanese and DPRK delegations
held an "amicable" meeting to discuss normalization,
in contrast to the first normalization working group
meeting, when Pyongyang refused to even discuss
abductees. Abductions will remain an important issue
for Japan, even if there is a change in government in
Tokyo. Japan is willing to "put everything on the
table" and discuss all issues as part of a "package
deal," including compensation, but North Korea must
agree to solve the abductions problem, Miyamoto
averred.


7. (C) Ambassador Raby, who will travel to Pyongyang
next Tuesday to present his credentials to the DPRK
Government, to which he will be concurrently
accredited, agreed at Miyamoto's request to raise the
abductees issue while in Pyongyang. Raby said Chinese
Vice Foreign Minister Wu Dawei had encouraged him to
request a meeting with Kim Jong-Il, but Canberra has
been reluctant to do so, meaning that he will most

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likely be received in Pyongyang by the DPRK's new
Foreign Minister or North Korea's "nominal" President.

Chinese Military Transparency
--------------


8. (C) Ambassador Miyamoto expressed concern about the
Chinese military's intentions but stressed that these
worries should not affect political and economic
relations with China. We must engage China. The PLA
has long argued for increased capabilities in order to
prevent Taiwan independence. It is unclear whether
behind that concern over Taiwan there also exists any
"big power chauvinism." It would be unfortunate if
that were so, but we must be prepared for that
possibility, Miyamoto stated. Increased PLA
transparency would be a good first step toward
allaying our concerns. While it is understandable
that China's expanding interests justify enhanced
military capabilities, those capabilities can always
be used for other purposes, which is precisely why
Japan's alliance with the United States is so
important, Miyamoto said. Ambassador Raby seconded
this view, stating that is precisely why Canberra's
alliance with Washington is so important.


9. (C) Australia has also been pushing the PLA to
increase transparency, Ambassador Raby said. The
Australian Defense Minister had a "convivial" visit
with Chinese counterparts during his recent visit to
Beijing but in the end learned "nothing," Raby
lamented. There have been some positive developments
in relations with the PLA, Ambassador Miyamoto noted,
explaining that the Chinese Defense Minister will
visit Japan in September, the first time in nine
years. A number of Chinese naval vessels have visited
Japan this year. A Chinese naval ship will make a
port call in Australia on September 7, which
Ambassador Raby thought was the first-ever PLA ship
visit to Australia.

APEC, China's Domestic Challenges
--------------


10. (C) Climate change will be an important topic on
the upcoming APEC agenda, Ambassador Raby stated,
commenting that China itself has discovered that
issues like climate change, energy and the environment
are important for China's domestic stability.
Australia hopes to "bump up" the level of aspirational
statements on climate change at APEC, laying out
specific energy efficiency objectives, albeit non-
binding ones. China itself has energy efficiency
goals in its five-year plan. Ambassador Miyamoto
observed that China, for its own domestic and
international reasons, is serious about pursuing
climate change and energy efficiency goals but will
likely agree only to relative, not absolute,
reductions in emissions, because it simply is not
willing to sacrifice economic growth.


11. (C) Miyamoto thought the magnitude of China's
domestic challenges is increasing and was pessimistic
about the Communist Party's ability to deal with these
problems. He agreed with Raby that one of China's
most pressing problems is trying to coordinate among
competing interests within the Party. China also
faces a number of economic problems caused by its
reluctance to liberalize its exchange rate and
financial systems. Beijing should rely more on market
forces, fewer regulations and the rule of law, but is
afraid to do so. Even if implementing exchange rate
reform would not solve China's trade surplus with the
United States, China must do so for its own
development, Raby said. The same holds true for the
price of natural resources, which Australia thinks
should increase by 50 percent. Only then would
inefficient polluters be driven out of business. The
government, meanwhile, continues to rely on regulation
and government intervention. One cause for optimism,
however, is the unification of China's domestic
market, Miyamoto observed, due to massive
infrastructure development fueled by economic growth,
resulting in increased productivity.

Human Rights: PRC-Australia Dialogue
--------------


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12. (C) The August 30 round of the Australia-China
human rights dialogue was "productive," Ambassador
Raby said. AFM He Yafei led the PRC delegation this
time, with Australia successfully resisting Chinese
attempts to downgrade the talks to the DG level. Only
on the issue of the Dalai Lama was He Yafei "sharp and
aggressive," Raby said. Australia handed over a list
of cases of concern. A number of high-level, non-MFA
representatives attended for the Chinese side, which
Raby surmised was part of MFA's strategy to expose
other PRC agencies to the thinking of foreigners on
human rights. The tone of the dialogue has improved
over the last 11 years, Ambassador Raby stated,
commenting that at first both sides simply "shouted"
at each other, but in the last few years the Chinese
side has stopped denying problems and instead now
provides explanations for why the problems exist.
Australia has implemented a one-to-two-million-dollar
technical assistance program to bring Australian
judges to China to teach about the rights of the
accused. At the last dialogue, the main topic was the
rights of HIV/AIDS sufferers. This time it was
lawyers who defend the rights of individuals. Raby
said China knows where it wants to go on human rights
but appears not to know how to get there under a one-
Party system.

FM Aso up for Promotion?
--------------


13. (C) In the wake of the LDP's Diet Upper House
election defeat, Prime Minister Abe could reshuffle
his abinet "at any time," Miyamoto said. If so,
Foreign Minister Aso would likely be promoted to an
"important new job." If this were to happen, Miyamoto
lamented that Japan would need some time to get a new,
and likely inexperienced, foreign minister "up to
speed."
RANDT