AFM HE YAFEI REVIEWS CHINA'S KEY ISSUES FOR THE

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000659 SIPDIS SIPDIS E.O. 12958: DECL: 02/22/2033 TAGS: PREL PGOV PINR PTER EINV MNUC BM IR KN CH TW, SU SUBJECT: AFM HE YAFEI REVIEWS CHINA'S KEY ISSUES FOR THE SECRETARY'S VISIT SIPDIS Classified By: Classified by Ambassador Clark T. Randt, Jr., Reasons 1. 4 (b) and (d). Summary -------------- ¶1. (C) In a February 22 meeting requested by the Chinese, PRC Assistant Foreign Minister He Yafei reviewed for the Ambassador China's key issues to be raised during the Secretary's visit to Beijing February 26-27. On North Korea, SIPDIS AFM He said that China's top leaders are prepared to have detailed discussions about "next steps." On the Iranian nuclear issue, China is considering hosting a Political Directors meeting in Shanghai in March after the elections in Iran. According to AFM He, Iran feels "isolated" and this "solidifies the hardliners." AFM He urged the Secretary to provide positive news on the Sinopec/Yadavaran deal next week. AFM He warned that if Sinopec is sanctioned, the Chinese Government will "retaliate and it would be a disaster for U.S.-China relations." The Ambassador emphasized the importance and timeliness of the proposed CT sub-dialogue in March. AFM He, whose portfolio includes Olympic security, characterized the recent increase in terrorist activities aimed at the Olympics as worrisome. China is "psychologically prepared" for protests, will act in "strict accordance with Chinese law" and will handle the protests in a "civilized" manner, AFM He stated. It would be helpful if the Secretary could repeat publicly the U.S. position on Taiwan, urged AFM He. If there is a crisis in Burma, China "suffers" the consequences and the Chinese military is put on alert, said AFM He. End Summary. DPRK -------------- ¶2. (C) AFM He said that China is looking forward to discussing the North Korean nuclear issue and how to move the Six-Party Talks forward with the Secretary. President Hu Jintao is ready discuss the Korean Peninsula nuclear issue and the future peace and security architecture of the region and FM Yang Jiechi is prepared to have detailed discussions on the way forward in the Six-Party Talks. FM Yang hopes to hear what exactly the United States would like China to press the North Koreans for and what incentives the United States might be willing to offer. The Chinese are willing to work on the North Koreans, he claimed. Iran -------------- �A; ¶3. (C) AFM He noted that he will be in Washington next week to participate in the meeting of the Iran P5-plus-1 Political Directors. China is considering hosting a Political Directors meeting in Shanghai in March after the elections in Iran, he added. AFM He opined that upcoming political elections in Iran will likely affect the Iranian leadership. According to AFM He, Iran feels "isolated" and this, unfortunately, "solidifies the hardliners." AFM He reiterated the strategic importance of U.S.-China cooperation on the North Korea and Iran nuclear issues. ¶4. (C) AFM He urged the Secretary to provide positive news regarding the USG decision on whether or not to sanction Sinopec for its Yadavaran oil field deal with Iran during her meetings in Beijing next week. If Sinopec, one of China's key energy companies, is sanctioned, the Chinese Government would "retaliate and it would be a disaster for U.S.-China relations." The possible sanctioning of Sinopec is a grave issue and puts China in a difficult position. China lacks sufficient resources to meet its energy needs, and the Sinopec deal allows China to import oil. There is no other purpose to the deal, stressed AFM He. It would be helpful to "clarify" this issue during the Secretary's visit, urged AFM He. Counter-terrorism Cooperation -------------- ¶5. (C) The Ambassador emphasized the importance and timeliness of the proposed CT sub-dialogue in March. AFM He, whose portfolio includes Olympic security, characterized the recent increase in terrorist activities aimed at the Olympics as worrisome. China recently arrested some alleged terrorists in Xinjiang who have close links with the Taliban and Al-Qaeda, said AFM He. The Ambassador noted that there is doubt surrounding the continuing existence of SHAT (East Turkestan Liberation Organization) and that the information China provided to justify designating SHAT as a terrorist organization was old. The United States stands shoulder to BEIJING 00000659 002 OF 002 shoulder with China against terrorists, stated the Ambassador. Apparently stressing that both the United States and China faced terrorism threats in the region, MFA Korean Affairs Counselor Ma Mingqiang added that in 2002, Pakistani intelligence arrested several alleged terrorists who had seven maps. Three of the maps were allegedly of the PRC Embassy and the remaining four were of the U.S. Embassy. Olympic Security -------------- ¶6. (C) AFM He told the Ambassador that he is focused on Olympic security. China's priority is the protection of heads of state, including the President of the United States. Over 100 countries have confirmed that their heads of state will attend the Olympics, said AFM He. He expressed appreciation to the San Francisco City Government for its assistance in ensuring the success of the torch relay. Chinese authorities have had very good discussions with the San Francisco Police Chief. ¶7. (C) It is "inevitable" that some international NGOs will "sling mud" at China, AFM He continued. China is "psychologically prepared" for protests, will act in "strict accordance with Chinese law" and will handle the protests in a "civilized" manner. Two days ago, China took some anti-riot measures in preparation for the China-Japan soccer match in Chongqing, shared AFM He. Those security measures were a success. Taiwan -------------- ¶8. (C) AFM He confirmed to the Ambassador that the issue of Taiwan will be raised during the Secretary's meetings in Beijing. As AFM He put it, "it's not over until it's over." It would be helpful if the Secretary could repeat publicly the U.S. position on Taiwan, urged AFM He. AFM He noted that the Secretary has two press opportunities on February 26 to make such a statement. Burma -------------- ¶9. (C) UN Special Envoy Gambari's March visit to Burma shows some "movement" on the issue, AFM He said. China wants to help improve the Burmese people's livelihood, support national reconciliation and encourage dialogue with Aung San Suu Kyi. According to AFM He, the Burmese authorities complain that following each of Gambari's visits to Burma, in which they accommodate his wishes and implement his proposals, they are hit with UN Security Council measures. The Ambassador replied that when there is no pressure on the Burmese regime, they tend to not make any changes. China shares a long border with Burma and if Burma is not governed well, this will lead to problems for China, said the Ambassador. AFM He agreed, noting that Burma's militias are not controlled by the Central Government. If there is a crisis in Burma, China "suffers" the consequences and China's military is put on alert, AFM He said. There is the potential for refugee flows into China, AFM He said and noted with respect to ethnic minority militias that "many of the Burmese refugees carry automatic weapons." Sudan -------------- ¶10. (C) China feels that it has not been treated "properly" on the Sudan issue, AFM He complained. Various NGOs have unfairly blamed China. "We aren't scared of Spielberg's actions. We understand this is the price you have to pay" for hosting the Olympics. But it would help if friendly countries could help mitigate or minimize these "forces," AFM He said. India, Nepal -------------- ¶11. (C) AFM He said that after his trip to Washington for the P5-plus-1 meeting, he will travel to India and Nepal for bilateral consultations. India is a "big and upcoming partner," said AFM He. He characterized Nepal as a "trouble spot" totally dependent on India. RANDT