EAP A/S HILL'S AUGUST 14 MEETING WITH AFM HE

C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 005387

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/16/2032
TAGS: PREL PGOV PHUM MARR ETRD CH IR SU TW
SUBJECT: EAP A/S HILL'S AUGUST 14 MEETING WITH AFM HE
YAFEI: IRAN, DARFUR, TAIWAN, BILATERAL ISSUES

Classified By: Deputy Chief of Mission Daniel Piccuta.
Reasons 1.4 (b/d).

Summary
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1. (C) EAP Assistant Secretary Hill raised U.S. concerns on
Iran and Darfur with Chinese Assistant Foreign Minister He
Yafei on August 14. AFM He stated that although our
approaches often differ, China wants to cooperate with the
United States on both issues. AFM He conveyed China's
concern over Taiwan President Chen Shui-bian's recent
independence moves, including application for UN membership
under the name Taiwan, as well as U.S. actions concerning the
interpretation of UNGA Resolution 2758. Such actions, he
said, "virtually call into question" the political basis of
the bilateral U.S.-China relationship. There is pressure
within China to table another resolution at the UN in order
to "clarify" the issue, AFM He said. AFM He raised China's
objections to politicizing the Olympics. A/S Hill and AFM He
also discussed Secretary Paulson's recent visit to China,
food safety, incidents regarding Chinese diplomatic pouches,
the planned U.S. Consulate General in Wuhan and upcoming
visits of Chinese officials to the United States. End
Summary.

Iran
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2. (C) Over lunch with Assistant Foreign Minister He Yafei on
August 14, EAP Assistant Secretary Hill, accompanied by the
DCM, raised concerns about Chinese inaction on Iran. A/S
Hill told AFM He that President Bush ranked Iran as a leading
United States foreign policy issue and expressed concerned
about China's lack of support for U.S. actions on Iran.
Iranian actions actively contribute to the deaths of U.S.
troops in Iraq, and the U.S. public is becoming acutely aware
of this. While the United States and China have cooperated
on Burma, North Korea and Sudan, China's position as one of
Iran's largest trading partners is not consistent with
efforts to curb Iran's destabilizing and dangerous
activities. A/S Hill emphasized that the lack of
coordination on Iran was emerging as an increasingly
unpleasant bilateral issue.


3. (C) Expressing apparent surprise about U.S. perceptions of
China's recalcitrance on Iran, AFM He stated that the United
States and China "are not on opposite sides of the issue."
China's policy is to strengthen cooperation with the United
States on major international issues, and the case of Iran is
no exception. China does have differences with the United
States; China advocates a more patient approach, stressing
negotiations, not sanctions, as the best way to move forward.
In that context, China is pleased to note that the United
States is talking to Iran about Iraq-related issues. China
hopes that additional time will allow discussions between the
IAEA and Iran to reach a positive outcome.


4. (C) In terms of trade, AFM stated that his government
receives pressure from Chinese companies who claim that
political considerations harm their business interests with
Iran. China seeks to ensure that its legitimate economic
interests are not being harmed. AFM He insisted that all
Chinese trade is consistent with UN Security Council
resolutions. He added that China continues some limited
military trade with Iran and is careful to seek end-user
certification. China does not want its weapons to "slip
into" Iraq.

Darfur
--------------


5. (C) A/S Hill said that even though the situation in Darfur
is complex, China must be careful not to be "on the wrong
side of history" on Darfur. AFM He announced that Ambassador
Liu Guijin, the Chinese Special Envoy on the Darfur Issue,
will travel to the United States in September and meet with
U.S. counterpart Ambassador Natsios, as well as with
Hollywood activists such as Mia Farrow and possibly Steven
Spielberg. Ambassador Liu hopes to better publicize positive
measures the Chinese government is taking on Darfur. AFM He
also pointed to Chinese success in convincing the Sudanese
government to accept then-UN-Secretary General Kofi Annan's
three-stage proposal to solve the crisis in Darfur. China is
pleased that the African Union is providing the majority of
the troops. A/S Hill told AFM He that the United States
welcomed UNSC Resolution 1769, which created a UN-African
Union hybrid force, and added that the United States had no
interest in splitting Sudan.


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Taiwan: UN Referendum, 2758, Arms Sales
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6. (C) Referring to Taiwan as the "number one issue" for
China, AFM He expressed concern over Chen Shui-bian's
attempts to hold a referendum on membership in the UN under
the name "Taiwan," as well as Chen's other efforts to alter
Taiwan's status internationally, including by applying for UN
membership with help from countries like the Solomon Islands.
Taiwan's status was resolved by UNGA Resolution 2758, AFM He
asserted, but "unfortunately" the U.S. Mission in New York
told the UN Secretariat it had used the "wrong legal
justification" in rejecting Taiwan's application for
membership. China's Ambassador to the United States Zhou
Wenzhong was "shocked" to receive this same answer during his
August 6 meeting with Under Secretary Burns. If Resolution
2758 did not resolve the issue of Taiwan's status, then China
would not be in the UN. Such actions by the U.S. Mission in
New York "should be stopped," AFM He said.


7. (C) A/S Hill replied that the President has been very
clear in stating our opposition to Chen Shui-bian's actions
on the referendum. China appreciates the clear statements of
the White House and State Department on the referendum, AFM
He said, but the problem is "mixed messages" on other fronts,
such as arms sales, referring to "rumors" that the United
States has already agreed to sell "advanced, offensive" F-16
C/Ds to Taiwan. AFM He recalled the "consequences" and
"damage" done to the bilateral relationship in 1992 when
then-President George H.W. Bush decided to sell F-16 A/Bs to
Taiwan. A/S Hill reminded AFM He that U.S. arms sales are
made so as to allow Taiwan to maintain a credible defense as
provided for in the Taiwan Relations Act and contribute to
the maintenance of cross-Strait stability.


8. (C) Regarding UNGA Resolution 2758, the DCM said that our
interaction with the UN Secretariat dealt only with the
specific question of how the UN legal adviser's office had
interpreted 2758, and did not address rejection of Taiwan's
application for UN membership. Resolution 2758 dealt only
with the question of the China seat at the UN, and did not
attempt to address or resolve other issues in relations
across the Taiwan Strait. As Ambassador Zhou was told in
Washington, the United States believes it to be in neither
U.S. nor PRC interest to have a public debate over the
long-standing differences between the United States' "one
China" policy and Beijing's "one-China" principle. We do not
want to raise our differences in public, and China should not
push us to do so. AFM He countered by saying that taking
exception to Resolution 2758's language "virtually calls into
question the political basis of the bilateral relationship."
This is a very serious matter. There is pressure within
China to table another resolution in order to "clarify" the
issue, AFM He said. China believes 2758 is already clear, as
it had "kicked the Chiang Kai-shek clique out" of the UN.
The only two countries raising the 2758 issue, AFM He added,
are the United States and a very low-level official from
Germany.

Strategic Trust and Taiwan
--------------


9. (C) Changing tack, AFM He argued that we should view the
Taiwan issue from the larger framework of bilateral
"strategic trust." As Executive Vice Foreign Minister Dai
Bingguo told Deputy Secretary Negroponte at the Senior
Dialogue in June, strategic trust is the basis of a long-term
stable relationship. Without it, we are left only with
suspicions. Strategic trust means taking care of the major
strategic concerns of the other side. On all major issues,
including Iran, China wants to cooperate with, and is not on
the opposite side of, Washington. We may move at a different
pace and have different perspectives, but "we are your
partner," AFM He averred. Taiwan remains the fundamental
issue for China. Beijing therefore urges Washington to take
its sensitivities into account on this issue, lest strategic
trust between us be undermined, which would make it difficult
to maintain the current positive direction of bilateral
relations.


10. (C) A/S Hill urged China to be calm and patient on
Taiwan. Chinese impatience or an overreaction would only
harm Beijing's own interests. AFM He said Beijing has been
calm and patient; if not, China "would already have Taiwan
back." Beijing has assured everyone, including the residents
of Taiwan, of its peaceful intent. China is in a "militarily
superior position" now, but whatever military advantage China
has is for deterrence purposes. If China had wanted to use
force, it could have done so before now. Although Beijing
has noted the statements of the President and others opposing

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Chen's referendum and other actions, at the same time China
is concerned by U.S. arms sales and transits of Taiwan
officials, including the upcoming transit of Chen Shui-bian
through Alaska. The United States has reopened the very
sensitive issue of UNGA Resolution 2758, which China thought
had been buried and resolved by history. Reopening such
issues only serves Taiwan, AFM He said. Moreover, despite
Chinese patience, Chen Shui-bian has taken a series of
actions to further his political agenda and achieve Taiwan
independence, despite repeated warnings from the United
States. A/S Hill again emphasized the need for China to
remain patient on Taiwan, and he also explained that Chen
Shui-bian's upcoming transit of Alaska is entirely in keeping
with our one China policy.

Wu Bangguo Visit
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11. (C) AFM He confirmed that Chairman of the National
People's Congress (NPC) Wu Bangguo will visit the United
States starting October 30. Chairman Wu has received
invitations from House Majority Leader Nancy Pelosi and
Senator Robert Byrd. A meeting with the President has been
confirmed, and Wu also hopes to meet with Vice President
Cheney. Chairman Wu's visit is significant because Wu ranks
second in the Chinese hierarchy and is extremely influential.
His visit marks the first time in 18 years that an NPC
Chairman has visited the United States. Following meetings
in Washington, Wu hopes to travel to other parts of the
United States.

Other visits
--------------


12. (C) AFM He highlighted a number of other visits of
high-level Chinese officials to the United States, including
State Councilor Tang Jiaxuan's October 22-23 participation in
the George H.W. Bush U.S.-China Relations Conference at Texas
A and M. Regarding FM Yang Jiechi's upcoming visit in
connection with the UNGA, AFM He said the Chinese side would
like to propose that FM Yang meet with Secretary Rice on
September 27 in Washington. FM Yang also hopes to pay a
courtesy call on the President, National Security Advisor and
other officials. A/S Hill assured AFM He that FM Yang would
be warmly received in Washington, but that we would need to
line up schedules and ensure that there was adequate time for
each meeting.

Olympics
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13. (C) AFM He raised concerns about politicization of the
Olympics, which he said was the intention of some members of
Congress, NGOs and "certain film producers and actors." The
Olympics is a "huge basket" into which various groups want to
dump their pet issues. He said China appreciated the U.S.
support for Beijing's efforts to organize the games.

Secretary Paulson's Visit

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14. (C) AFM He commented that Treasury Secretary Paulson held
"productive" discussions with President Hu Jintao and Vice
Premier Wu Yi during his recent visit to China. AFM He
observed that both sides "understood each other well" and
said Secretary Paulson clearly has the trust of President
Bush. He observed that even though the fundamentals of
bilateral trade are sound, both sides recognize that tension
in Washington is building regarding the state of our trade
and economic relations.

Food Safety
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15. (C) In the context of promoting bilateral trade, AFM He
stated that China is taking vigorous measures to ensure food
safety. China has introduced a strict food inspection
regime, as food safety is also an important domestic
political issue. In addition, the United States and China
are working on coordination between the two countries'
respective quarantine systems, with teams from the two sides
recently having reached an agreement in this regard.

Chinese Diplomatic Pouch
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16. (C) AFM He expressed concern about delays and diplomatic
seal breakages of Chinese diplomatic pouches. Over the past
three years, the Chinese government has reported seven cases
of broken seals on Chinese diplomatic pouches. Some on the

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Chinese side are suspicious that these incidents might be
intentional. The DCM noted that an investigation into the
openings was conducted and assured AFM He that the seal
breakages were not intentional. The DCM also reminded AFM He
of U.S. concerns regarding China's inappropriate restrictions
on the size of U.S. diplomatic pouches entering China.

Consulate General Wuhan
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17. (C) The DCM reaffirmed the U.S. intention to open a
Consulate General in Wuhan. The Embassy remains concerned,
however, that the central government has yet to notify local
Foreign Affairs Office officials of the approval to establish
the Consulate General. AFM He stated that the Chinese
government is unclear whether the plans for Wuhan as
currently proposed conform to the 1995 bilateral agreement
allowing for the opening of a "full-fledged" Consulate
General in Wuhan, or whether U.S. plans constitute something
"new." The DCM urged the MFA to resolve the issue promptly,
as prior personnel and logistical arrangements are currently
on hold. AFM He described China's desire to discuss opening
additional Consulates General in the United States, including
in Atlanta, Boston and Honolulu.
RANDT