PRC/RUSSIA: MEDVEDEV VISIT CAST AS REAFFIRMATION

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 002303

SIPDIS

PACOM FOR FPA AMB CHRISTY

E.O. 12958: DECL: 06/12/2028
TAGS: PREL ETRD ENRG MASS KOLY RS CH
SUBJECT: PRC/RUSSIA: MEDVEDEV VISIT CAST AS REAFFIRMATION
OF STRATEGIC PARTNERSHIP; CHALLENGES REMAIN

REF: MOSCOW 1599

Classified By: Political Minister Counselor Aubrey Carlson.
Reasons 1.4 (b/d).


1. (C) SUMMARY: The May 23-24 visit of Russian President
Medvedev to Beijing aimed to reaffirm the Sino-Russian
"strategic partnership," to emphasize the two countries'
shared desire for a more multi-polar world, and to
demonstrate their common approach to international hot-spot
issues, said MFA and Russian Embassy sources. Medvedev's
visit also sought to show that leadership transitions on both
sides will not affect bilateral relations. Chinese officials
praised Russian assistance to the victims of the May 12
Sichuan earthquake. Both sides acknowledged economic
"challenges," and China showed a new willingness to make
progress on potentially divisive issues, such as a
Sino-Russian agreement on long-term energy cooperation.
However, a concrete way forward on major economic problems
failed to emerge, and the visit's deliverables were modest.
Beijing pressed for broad condemnation of missile defense
systems in the Joint Declaration, but the Russian side agreed
only to more specific language. The MFA said stalled
military technical consultations will recommence within the
year, but Russian EmbOffs were more circumspect. The two
sides also discussed development policy in the Russian Far
East, cultural exchange, transnational environmental issues
and Russian support for the Beijing Olympic Games. END
SUMMARY.


2. (C) MFA Department of European and Central Asian Affairs
Deputy Director General Zhang Hanhui briefed PolOff June 2 on
the outcome of the Medvedev visit. Russian Embassy Political
Counselor Anton Revutskiy briefed the Deputy Political
Minister Counselor on June 4. While in Beijing, Medvedev met
with President Hu Jintao, Vice President Xi Jinping, National
People's Congress Standing Committee Chairman Wu Bangguo, and
Chinese People's Political Consultative Conference (CPPCC)
Chairman Jia Qinglin, although Revutskiy described the latter
two as "protocol meetings." Zhang said Premier Wen Jiabao
did not meet with President Medvedev only because Wen was in
Sichuan overseeing earthquake recovery efforts. Medvedev
delivered an address at Peking University. Revutskiy said
Medvedev was accompanied by Foreign Minister Lavrov, Deputy
Prime Minister Zhukov, the Minister for Industry and Trade,
the Minister for Energy, heads of other agencies and regional
leaders from Tomsk.

"Mutual Trust" to Uphold the Strategic Partnership
-------------- --------------


3. (C) Chinese officials described Medvedev's visit as
primarily a demonstration that the "strategic partnership"
the two sides have developed over the last decade will
continue under Medvedev. Zhang said the visit showed that
close Sino-Russian ties will endure regardless of leadership
transition on either side. Zhang said the visit "boosted
mutual political trust" but acknowledged that the two sides
grappled with contentious bilateral issues. He said the two
sides agreed to "prioritize" the coordination of their
respective foreign policies under a strategic partnership
framework. Russian Embassy Political Counselor Revutskiy
echoed Zhang's views, calling the visit a "confirmation of
the continued political course." Revutskiy said that the
agreements that came out of the visit constitute an "action
plan" to further develop the strategic partnership. Zhang
said President Medvedev reaffirmed his support "in various
and tangible ways" for Beijing's approach to potential
flashpoints like Taiwan, Xinjiang and Falungong.

Joint Declaration, Missile Defense
--------------


4. (C) The Joint Declaration signed during the visit
concerned international issues and avoided bilateral issues
that might reflect differences between the two sides (see
reftel for text of the document). Unlike similar
declarations in 1997 and 2005, the recent declaration
included an expression of common opposition to
"destabilizing" missile defense systems. Zhang said that the
Joint Declaration demonstrates Sino-Russian "strategic
cooperation" in dealing with international issues. He noted
that the Joint Declaration echoed previous Chinese official

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statements on the need for a more multi-polar global system
and "democratization of international relations," including
increased emphasis on the UN and the use of negotiation and
discussion to solve international problems. Revutskiy said
that the primary purpose of the Joint Declaration was the
"rejection of unilateral action," support for a strong UN
role and respect for sovereignty and territorial integrity.
He underscored that the two sides reaffirmed the principle of
the respect for human rights, but cautioned that "every
country has the right to defend itself based on its own
conditions."

Chinese Wanted General Opposition to Missile Defense
-------------- --------------


5. (C) According to Revutskiy, in the negotiations over the
missile defense statement in the Joint Declaration, the
Chinese pushed for a statement opposing "any form" of missile
defense. It was China, he stressed, that wanted to avoid
listing specific missile defense deployments. He said Russia
preferred a statement opposing missile defense "in certain
areas" that would affect specific Russian and Chinese
security interests. The resulting compromise in the final
document expressed concern about the deployment of missile
defense systems "in some regions of the world or the
initiation of relevant cooperation." He said that the first
Chinese draft included a condemnation of "hegemony," but that
the Russian side toned down such rhetoric.

Economic Issues Discussed with Few Real Results
-------------- --


6. (C) Zhang played up the visit's economic accomplishments,
including the establishment of a mechanism to exchange views
on energy cooperation and expressions of mutual interest in
coordination on technology development and environmental
protection, but he acknowledged that key items, such as a
Sino-Russian agreement on long-term energy cooperation,
remain under negotiation. On hydrocarbons cooperation, Zhang
said only that the issue is "in many ways proceeding in a
smooth and comprehensive way." Zhang said not only are
Chinese companies interested in investing in Russia, but
Russian firms are also seeking inroads into China's refining
industry. Revutskiy said the two sides concluded an "action
plan" to promote tourism, a commercial agreement to continue
an on-going joint uranium enrichment project, an agreement to
coordinate on the development of aviation technology and an
MOU between Russian state-owned banks and the Construction
Bank of China. Revutskiy said that current efforts are
laudable but that Russia remains unsatisfied with the
economic status quo. He said that China is trying to bring
political leadership to the issue, but that any real gains
will take time. In any case, he said, there may be limits to
what government initiatives can accomplish in the face of
structural imbalances. Revutskiy said Beijing understands
the need to be seen as taking action on trade issues. For
example, China did not object to higher Russian export
tariffs on raw timber. Rather, China has focused on
promoting Chinese investment in the processed wood industry
in Russia.

Expectations Too High?
--------------


7. (C) The modest economic results of the visit may not have
fulfilled high expectations before the visit. At a May 20
press briefing, Assistant Foreign Minister Li Hui predicted
that during the visit the two sides would sign "a number of
bilateral cooperation documents." Russian Ambassador to
China Sergey Razov declared in advance of the visit that the
visit would demonstrate that the bilateral relationship is
based on "equality" and a "full consideration of mutual
interests." In the end, state-run Chinese media reported
without fanfare that trade deals had been struck, but Zhang
would only say that the two sides "exchanged views" on trade
issues, and that they would "work harder for a solid
foundation" to the bilateral economic relationship.

Earthquake Diplomacy
--------------


8. (C) During the visit, Chinese media highlighted Russian
assistance to the victims of the Sichuan earthquake,

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particularly Russia's bringing a group of injured children to
Russia for treatment, a gesture that recalled China's medical
care of children from the Beslan hostage crisis. Zhang said
that Russia provided 20 shipments of supplies to the affected
areas and that Russia was one of a handful of countries
authorized to send personnel as well as supplies to assist in
the recovery effort.

Military Talks Remain on Hold
--------------


9. (C) Technical military talks within the framework of the
Sino-Russian Joint Military Technical Cooperative
Sub-committee have been stalled since 2006, but Zhang said
the two sides would meet before the end of the year. Zhang
said Sino-Russian dialogue on military issues is "not aimed
at any third country." Revutskiy said that Russian arms
sales to China have dropped off and that this is reflective
of the structural problems in the bilateral trade
relationship. Reiterating Russia's ongoing dissatisfaction
with the low comparative value of its exports to China,
Revutskiy said that it is still too early to tell whether
Chinese efforts to improve the structure of trade, including
increased military purchases from Russia, will bear fruit.
He indicated that any improvement in the economic
relationship will factor into Russia's willingness to discuss
military affairs. Revutskiy said there is no schedule for a
future round of the Sub-committee and no "fixed frequency"
for meetings. He said there is now little urgency for
another round because there are "no major projects in the
pipeline."

Russian Far East, Coordinating Local Policy
--------------


10. (C) In part to outflank potential friction over Chinese
migration in the Russian Far East, Chinese officials
emphasized efforts made during the visit to improve
communication between local authorities on either side of the
border. Zhang said the two sides agreed to improve policy
coordination at the national and local levels. He said China
is careful to ensure that development policies in China's
northeast do not create conflict with Russia. Revutskiy said
"forms of migration" into the Russian Far East were
discussed. Russia called for the "civilized and orderly"
movement of people across the border and continues to be
concerned by visa fraud and overstays by Chinese in Russia.


11. (C) Zhang said the two sides signed an MOU between the
Yantai and Tomsk regions to provide for Chinese investment in
Russia's wood-processing industry. The two sides also agreed
on the management of cross-border water resources and plan to
raise local environmental issues at the Prime Minister level
in future talks. He claimed the two sides reached agreement
to "take up measures" on pollution control in shared bodies
of water, and pointed to Chinese efforts to clean up the
Songhua River. Zhang claimed that the two sides also
discussed cross-border infrastructure development.

Other Issues Discussed
--------------


12. (C) President Hu raised the issue of the Trans-Siberian
pipeline connection to China that has been stalled, which
Revutskiy claimed is currently under renegotiation by the
Russian and Chinese entities involved. President Hu offered
to task Vice Premier Wang Qishan to work with the Russian
Deputy Prime Minister on the issue to try to bring added
political gravity to the stalled project. Revutskiy stressed
that Russia remains very interested in completing the
project, and reported that contacts close to the project say
it will be completed by the end of 2009.


13. (C) Revutskiy said the two sides reiterated the need to
build on the goodwill generated by the "Year of Russia in
China" and the "Year of China in Russia" with a "Year of the
Russian Language in China" and "Year of the Chinese Language
in Russia" in 2009-10. The MFA's Zhang reported that
Medvedev reiterated support for the Beijing Olympic Games and
confirmed that he will attend.
PICCUTA