Identifier
Created
Classification
Origin
08BEIJING1203
2008-03-31 08:27:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

VISITING STAFFDEL MEETS NORINCO OFFICIALS

Tags:  MNUC PARM PHSA PREL CH IR SY 
pdf how-to read a cable
O 310827Z MAR 08
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC IMMEDIATE 6175
INFO SECDEF WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC
DEPT OF COMMERCE WASHDC
NSC WASHDC
C O N F I D E N T I A L BEIJING 001203 

SIPDIS


E.O. 12958: DECL: 03/31/2017
TAGS: MNUC PARM PHSA PREL CH IR SY

SUBJECT: VISITING STAFFDEL MEETS NORINCO OFFICIALS

Classified By: Political Regional Unit Chief Mark Tesone.
Reasons 1.4 (b/d)

Summary
-------

C O N F I D E N T I A L BEIJING 001203

SIPDIS


E.O. 12958: DECL: 03/31/2017
TAGS: MNUC PARM PHSA PREL CH IR SY

SUBJECT: VISITING STAFFDEL MEETS NORINCO OFFICIALS

Classified By: Political Regional Unit Chief Mark Tesone.
Reasons 1.4 (b/d)

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


1. (C) NORINCO Vice President He Xiaodong told Senate Foreign
Relations Committee staff members Frank Januzzi and Puneet
Talwar that NORINCO can serve as an educator and lobbyist on
the subject of export control compliance. VP He said NORINCO
unilaterally stopped exporting "explosives" to Syria and
convinced the MFA to ban all such exports from China.
NORINCO has stopped selling arms to Iran and has nearly
completely ended the company's 20-year relationship with that
country. According to He, China has stopped all defense
exports to Iran and Syria due to the Beijing Olympics, a
prohibition VP He expects to last at least one year. End
Summary.

NORINCO's Role in China's Export Control Regime
-------------- --


2. (C) NORINCO Vice President He Xiaodong met with Senate
Foreign Relations Committee staff members Frank Januzzi and
Puneet Talwar on March 24. VP He said he believes NORINCO
can serve as an educator and lobbyist on the subject of
export control compliance both to the Chinese Government and
the Chinese defense industry. VP He said he prepared a
report to President Hu Jintao on U.S. sanctions against
NORINCO before Hu's meeting with President Bush in 2003, and
he has written reports to PRC leaders about the importance of
internal compliance programs. He noted that China Great Wall
Industry Corporation has already sought NORINCO's advice on
export control compliance.


3. (C) VP He said NORINCO's annual revenue is roughly USD
three billion and he expects it to double in two years,
largely due to oil investments in Kazakhstan. Civilian
projects make up 85 percent of NORINCO's revenue, he said.

NORINCO, Syria and Iran
--------------


4. (C) VP He said his company unilaterally stopped exporting
explosives to Syria, fearing they might be re-exported to
Iraq. NORINCO then convinced the MFA to ban all such exports
from China to avoid being singled out by the Syrian
Government as uncooperative. According to VP He, NORINCO has
also stopped selling arms to Iran and has almost completely
ended the company's 20-year relationship with Tehran. Some
NORINCO employees opposed this decision, arguing that Chinese
law does not prohibit such exports and that other firms would
step in and sell to Iran if NORINCO stopped exporting. VP He
said the only business NORINCO presently has with Iran is
manufacturing new cars for Tehran's subway system. NORINCO
employees who used to work on Iran accounts are being moved
to other divisions within the company, he said.


5. (C) VP He claimed that China stopped all defense exports
to Iran and Syria due to the Beijing Olympics. He did not
know how long the prohibition would last but estimated it
would be at least a year.

Defense Spending Should be More Transparent
--------------


6. (C) Januzzi impressed upon VP He the importance of
transparency in China's defense spending. VP He agreed that
China's defense spending should be more transparent in order
to reduce tensions with the United States. They also agreed
that there should be more dialogue between the United States
and China on military spending.
PICCUTA


NNNN




End Cable Text