C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000759

SIPDIS

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 11/28/2032
TAGS: PREL MNUC KNNP KS KN CH
SUBJECT: SFRC STAFFER JANUZZI READ-OUT OF NORTH KOREA
DENUCLEARIZATION CONFERENCE IN SHANGHAI NOV 27

REF: SHANGHAI 570 AND PREVIOUS

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CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate
Shanghai, Department of State.
REASON: 1.4 (b), (d), (h)




1. (C) Summary: Chinese, South Korean and United States
academics and officials agreed that North Korea (DPRK) has not
yet decided if it will give up its nuclear weapons according to
a read-out provided by Senate Foreign Relations Committee
Professional Staff Member Frank Januzzi on a November 27
conference on the denuclearization of the Korean Peninsula in
Shanghai. The DPRK is likely to recusitate its demand for a
light water reactor in the near future and conference attendees
expressed concern at the likely United States response to what
they expect to be "an imperfect declaration" by the DPRK of its
nuclear program in the very near future. South Korean
participants urged the United States to lift sanctions on the
DPRK as soon as this declaration is made -- and then deal with
any problems it presents later. Japan appeared to still be
"paralyzed" by the abductees issue and not actively engaged in
the Six-Party Talks process. China continues to be concerned
that DPRK intransigence on its nuclear weapons program will
encourage Japan to rethink its own weapons needs. Chinese
participants were concerned by disagreements between members of
the South Korean delegation that broke down along politically
conservative and progressive lines. Especially of concern to
the Chinese was that if South Korea became more politically
conservative, it would move away from China towards a closer
alignment with the United States. End summary.


2. (SBU) The Shanghai Academy of Social Sciences (SASS) and the
Shanghai International Culture Association sponsored an academic
conference entitled: "Denuclearization on the Korean Peninsula
2008 Issues, Prospects and Peace Building Mechanisms" on

November 27. Senate Foreign Relations Committee Professional
Staff Member Frank Januzzi joined Columbia University Professor
and former State Department official Joel Wit representing the
United States at the conference. Consulate General Shanghai was
not invited to participate, but Januzzi provided a read-out of
the conference to Econoff on November 27.


3. (C) In addition to the United States, there were
representatives from South Korea (ROK) and China. ROK Ministry
of Foreign Affairs North Korea Nuclear Affairs Bureau Deputy
Director General Choong-hee Hahn led the ROK delegation that
also included Korea Institute for National Unification Senior
Research Fellow Seong-whun Cheon and North Korean Nuclear Policy
Division Assistant Director Han-seok Ryoo. The Chinese side was
led by SASS Vice President Huang Renwei and included SASS Korean
Peninsula Studies Center Deputy Director Liu Ming, Institute of
Applied Physics and Computational Mathematics Professor Liu
Gonglian.), China Institute of International Studies Senior
Fellow Yu Shaohua. (Note: Liu Gonglian is a retired Chinese
nuclear weapons physicist in his late sixties. Yu Shaohua spent
10 years as a Chinese diplomat in North Korea during the 1990s
and 2000s. End note.)

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Even North Korea Doesn't Know If It Will Give Up Nukes
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4. (C) The purpose of the conference was to allow academics and
those participating government officials to assess the DPRK's
progress in denuclearization. There was general agreement that
the DPRK has been moving forward. Januzzi and Wit stressed the
important role that Chinese and ROK interlocutors must play in
conveying to the DPRK that its expected declaration must
completely and accurately reflect all of its nuclear activities.


5. (C) There was a broad consensus among all conference
attendees that the DPRK has not yet made the decision to
denuclearize. The DPRK is "playing it day-by-day" and no one
will know if they are willing to give up their nuclear weapons
until they have already been granted the concessions they want.


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Expect the DPRK to Insist on an LWR and "Peaceful Use"
-------------- --------------


6. (C) According to Januzzi, the Chinese view is that during the
next year, the DPRK will not abandon the fissile material it has
already processed and possibly weaponized. The DPRK will, in
the near future, resuscitate its demand for a light water

SHANGHAI 00000759 002.2 OF 002


reactor (LWR) as part of its compensation package and insist on
its right to pursue the peaceful use of nuclear energy. The
Chinese are not expected to object to these stipulations and the
Chinese attendees at the conference expressed the hope that the
United States position on these demands would be "more flexible"
and allow the LWR in exchange for the DPRK giving up its nuclear
weapons capability.

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How Will the U.S. React to an Imperfect Declaration?
-------------- --------------


7. (C) ROK participants said that the United States should lift
sanctions against the DPRK as soon as the DPRK issues its
declaration. They acknowledged that the declaration might not
perfectly comply with United States expectations but said that
any problems should be worked out after the sanctions are
lifted. The ROK delegation expected the DPRK's declaration
soon.


8. (C) There was a "sense of anxiety" on both the part of the
Chinese and ROK participants as to what the United States
reaction would be to an "imperfect declaration," said Januzzi.

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Nobody Defending the North Koreans
--------------


9. (C) The Chinese side took a hard line criticizing the DPRK.
No one at the conference defended the DPRK, though China
Institute of International Studies Yu appeared the most
sympathetic to their concerns.


10. (C) Chinese participants expressed frustration at
Pyongyang's failure to modernize its economy. The Chinese
government had sponsored the training of a group of DPRK
government economists at SASS in the last year. SASS's Huang
said that this sort of training was a "wasted effort" since the
economists return home and nothing ever gets implemented.

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Japan: Paralyzed and Sidelined Into Irrelevance
-------------- --


11. (C) Japan was not been invited to send a delegation to the
conference and their role in the Six-Party talks was downplayed.
There was the perception that Japan is still "paralyzed by the
abduction issue" and its disengagement has made it irrelevant to
the Six-Party Talks. While no one explicitly criticized Japan,
Japan was hardly mentioned at all, said Januzzi. However Japan
was clearly motivating China's desire for progress in
denuclearizing the DPRK given its concern that Japan might
respond by developing its own weapons program. SASS's Liu said,
"The status quo is not acceptable since other countries in the
region might reconsider their non-nuclear position."

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Disagreements Within the ROK Delegation
--------------


12. (C) Januzzi said that one of the most interesting parts of
the conference was the public disagreements and discussions
between the ROK delegates that broke down along politically
conservative and progressive lines. The ROK progressives think
that the disablement process has been going well while the
conservative side finds the DPRK's compliance inadequate. The
Chinese delegation observed these discussions with some concern
and expressed their worry that if the ROK moves in a more
politically-conservative direction and a conservative is elected
president, then the ROK might move away from China towards the
United States. They also noted that should this happen, the
United States might find itself in the awkward position of being
out ahead of the ROK in terms of its Korean unification policy.


13. (U) Mr. Januzzi did not have an opportunity to clear on this
report.
JARRETT