REP. HASTERT ENCOURAGES U.S.-PRC ENERGY COOPERATION

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 005295

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/13/2017
TAGS: PREL PGOV OVIP ENRG CH
SUBJECT: REP. HASTERT ENCOURAGES U.S.-PRC ENERGY COOPERATION

Classified By: Political Minister Counselor Aubrey Carlson. Reasons 1.
4 (b/d).

Summary
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1. (C) Visiting House of Representatives members Dennis
Hastert (R-IL) and John Shadegg (R-AZ),accompanied by the
Ambassador, encouraged greater U.S.-China cooperation in
developing clean coal and nuclear technology in an August 13
meeting with Foreign Minister Yang Jiechi. FM Yang said the
UN Framework on Climate Change and the Kyoto Protocol are the
"foundation" for China's action on clean energy and climate
change. FM Yang stressed Chinese opposition to Congressional
support for Taiwan, particularly given Taiwan's recent
attempt to gain UN membership, and to Congressional attempts
to link China's hosting of the Olympics with other issues.
FM Yang also highlighted the importance of the fall 2007
visit to the United States of National People's Congress
Standing Committee Chairman Wu Bangguo. End Summary.

Clean Coal and Climate Change
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2. (C) In an August 13 meeting with Chinese FM Yang Jiechi,
Representative Dennis Hastert (R-IL) observed that both the
United States and China depend on off-shore sources for
petroleum and natural gas, but both countries are also
endowed with tremendous coal reserves. The challenge is to
develop viable, clean coal technologies in order to address
economic growth and environmental protection imperatives.
There is global consensus that climate change is a problem,
but inconsistent action on addressing it, he noted. The
United States is widely criticized for not signing the Kyoto
Protocol, but other signatories, such as the EU and China,
have not met the targets contained in the treaty.


3. (C) FM Yang noted that China obtains 65-70 percent of its
energy needs from coal and will continue to do for the
foreseeable future. He agreed that the United States and
China can and should cooperate to develop clean technologies.
FM Yang stated that though China is 90 percent self-reliant
for its energy needs, it still imports much oil and natural
gas and needs to diversify, use renewable sources of energy
and convince people to be more environmentally conscious. FM
Yang stated that as both major consumers and producers of
energy, the United States and China must address
environmental issues, including climate change.


4. (C) FM Yang affirmed that China considers the UN Framework
Convention on Climate Change and the Kyoto Protocol the legal
basis for future action on climate change. He underscored
the importance of the upcoming United National Climate Change
Conference in December in Bali as an important opportunity to
discuss environmental issues. FM Yang also highlighted the
Chinese government's State Council-level working group on
climate change, which is headed by Premier Wen Jiabao and
includes Foreign Ministry representatives. China understands
the need for the development of clean coal and alternative
fuel technologies and to increase environmental consciousness
in the Chinese public. China hopes to seriously address
climate change and has announced a goal to reduce per-unit
GDP consumption of energy by 20 percent by the year 2010
compared to 2005 levels. FM Yang pointed out that the
Chinese government no longer solely uses GDP to gauge
progress in China. Instead, local officials now use an
aggregate index that includes air quality, "transportation
efficiency" and environmental protection efforts.

Nuclear Energy Technical Exchange
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5. (C) Representative Hastert said that Congress will have
another opportunity in September to pass legislation to
increase the use of nuclear and clean coal technology, though
legislative, legal and regulatory roadblocks continue to slow
progress in the development of nuclear energy in the United
States. Representative Hastert suggested that China, with a
more centrally-planned administrative structure, might be
able to take advantage of U.S. technologies in developing
safe nuclear technologies. China's experience, in turn,
could be used to persuade doubters in the United States about
the efficacy and safety of "following through on new
technology" related to clean coal and nuclear energy.


6. (C) FM Yang agreed that nuclear technology is an area of
great promise and stated that China hopes to increase its
cooperation with the United States in this area. China
cooperates in the area of nuclear power with France, Russia
and Canada and would like to do so with the United States.
FM Yang said he understands the "mountainous hurdles" facing
advocates of nuclear cooperation with China. Continued
exchange of ideas is crucial for any future success. China,

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too, needs to proceed cautiously on nuclear technology. Many
nuclear power plants in China are in densely populated areas,
a condition that would not conform to U.S. nuclear safety
standards.

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


7. (C) FM Yang stressed the need to ensure that the
U.S.-China relationship continues its current positive trend.
Both countries have common interests in combating terrorism,
proliferation and non-traditional security threats.
Exchanges between Congress and the National People's Congress
(NPC) have been productive and are a more effective method of
addressing bilateral issues than enacting legislation or
passing resolutions, he said.


8. (C) FM Yang stated that while the majority of Congress
understands the one-China policy, occasionally, certain
members propose legislation that includes provisions to
invite (Taiwan President) Chen Shui-bian to visit Washington,
sell arms to Taiwan or support Taiwan's independence. FM
Yang noted that the situation is "very serious." Chen
Shui-bian's administration is attempting to join the UN under
the name "Taiwan." The United States' explicit expression of
its position opposing the referendum is welcome, but Congress
must be "more cautious" in how it treats the Taiwan
situation. China supports peaceful unification, but "there
is a bottom line." He added, "Chen Shui-bian is dangerous,
and he is trying to push us into a corner."


9. (C) Representative Hastert described the separation of
powers in the United States and noted that Congress includes
a diverse group of representatives, some of whom propose
legislation that has no hope of passing but that serves to
increase a given member's profile or reflects the concerns of
his or her constituents. The majority of Congress supports
our one-China policy, and that policy will not change. This
issue underscores the importance of increased exchanges
between the U.S. and PRC legislative bodies. Economic
interdependence has made a military solution to the Taiwan
question impractical, he continued. "Discussion is the only
answer."

Olympics
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10. (C) FM Yang expressed hope that Congress will be "very
careful" with resolutions and legislation addressing China's
hosting of the Olympics. He said the Olympics are not about
the Chinese government; rather, they are about the Chinese
people, and the Chinese people take great pride in hosting
the Olympics. Efforts by members of Congress to use the
Olympics "like a Christmas tree" to advance their views on
U.S.-China bilateral issues will be detrimental to both sides
and hurt the feelings of the Chinese people.


11. (C) Representative Hastert recalled his own personal
history coaching in the Olympics and said he understands the
great pride countries take in hosting the Olympics. He said
members of Congress who are attempting to use the Olympics as
a lever for other bilateral concerns are in the minority.


12. (C) Representative Shadegg stressed the importance of
exchanges and dialogue on bilateral issues, adding that those
who seek to insert human rights issues into the Olympics are
in the minority. Just the same, he said, Chinese government
progress on human rights issues would strengthen the position
of pro-China voices.

Wu Bangguo Visit
--------------


13. (C) FM Yang reiterated the importance of
inter-parliamentary exchanges and stressed that Wu Bangguo,
the Chairman of the Standing Committee of the NPC, will visit
the United States in fall 2007. The last such visit occurred
in 1989, he noted.


14. (U) Representative Hastert's delegation did not review
this cable.
RANDT