Identifier
Created
Classification
Origin
08CANBERRA185
2008-02-25 07:47:00
SECRET
Embassy Canberra
Cable title:  

AUSMIN 2008: SESSION II (DPRK, INDIA, CHINA,

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S E C R E T SECTION 01 OF 08 CANBERRA 000185 

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E.O. 12958: DECL: 02/24/2018
TAGS: OVIP GATES ROBERT OVIP NEGROPONTE JOHN MOPS
MARR, KNNP, AS
SUBJECT: AUSMIN 2008: SESSION II (DPRK, INDIA, CHINA,
AFGHANISTAN, PAKISTAN)

Classified By: Ambassador Robert D. McCallum, Jr., for reasons 1.4 (b),
(d).

S E C R E T SECTION 01 OF 08 CANBERRA 000185

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SIPDIS

E.O. 12958: DECL: 02/24/2018
TAGS: OVIP GATES ROBERT OVIP NEGROPONTE JOHN MOPS
MARR, KNNP, AS
SUBJECT: AUSMIN 2008: SESSION II (DPRK, INDIA, CHINA,
AFGHANISTAN, PAKISTAN)

Classified By: Ambassador Robert D. McCallum, Jr., for reasons 1.4 (b),
(d).


1. (U) February 23, 2008; Parliament House, Canberra,
Australia.

SUMMARY
--------------

2. (C/RL AUS) U.S. and Australian officials dedicated the
second session of the 2008 AUSMIN conference to a
consideration of regional security issues throughout Asia.
They agreed to coordinate in managing the strategic
challenges of a rising China, keep the temperature down on
Taiwan, and to continue efforts to transform China into a
responsible stakeholder in the international system. The
Australian side indicated a strong commitment to remain in
Afghanistan for the long term for military operations, and
said it would soon announce a new package of assistance to
improve civilian capacity there. Australian FM Smith
requested a role for Australia in any regional security
architecture that emerges from the Six Party Talks, which he
said Australia would continue to support. Smith also said
Australia would not decide on whether to support a Nuclear
Suppliers Group deal to allow nuclear cooperation with India
until it emerges whether the Indian government will approve
its deal with the U.S. Both sides expressed serious concern
about the threats and challenges in Pakistan, particular
about the Pakistani government's capability to counter the
insurgency in the Fata region. End Summary.


3. (U) Participants:

UNITED STATES
Secretary of Defense Robert M. Gates

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Deputy Secretary of State John D. Negroponte
Ambassador Robert D. McCallum, Jr.
Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff
Admiral Timothy J. Keating, Commander, U.S. Pacific Command
Acting Assistant Secretary for Political-Military Affairs
Stephen Mull
Assistant Secretary of Defense for Asian & Pacific Security
Affairs James Shinn
Principal Deputy Assistant Secretary for East Asian & Pacific
Affairs Glyn Davies
Tim Davis, Carol Hanlon, Aleisha Woodward, John Crowley,

Jessica Powers (Notetakers)

AUSTRALIA
Minister for Foreign Affairs Stephen Smith
Minister for Defence Joel Fitzgibbon
Michael L,Estrange, Secretary of the Department of Foreign
Affairs and Trade
Nick Warner, Secretary of the Department of Defence
Air Chief Marshall Angus Houston, Chief of the Defence Force
Duncan Lewis, Deputy Secretary of the Department of Prime
Minister and Cabinet
Peter Varghese, Director General of the Office of National
Assessments
Dennis Richardson, Australian Ambassador to the United States
Berenice Owen-Jones, Alistair McEachern, Alanna Mackay,
Antony Horrocks, Marina Tsirbas, Amanda Pickrell, John
Feakes, Peter West (notetakers).

CHINA
--------------


4. (C/REL AUS) FM Smith endorsed Secretary Gates' opening
remarks on the importance of managing the rise of China. He
Qremarks on the importance of managing the rise of China. He
noted that the Chinese are seeking to transform their
relationship with Australia into a "strategic partnership,"
and that this process would not undermine the bilateral
Australian-US alliance. He stressed that the Australians are

CANBERRA 00000185 002 OF 008


not starry-eyed about China, and reported that recent
bilateral meetings with the Chinese fell short of "free
flowing discussions", with the Chinese taking formulaic
positions on issues such as human rights. He said the
Australian side had raised the issue of transparency in
China's military modernization, and that the Australians had
encouraged the Chinese to respond to these concerns that had
been raised by the U.S. FM Smith noted that managing the
relationship with China was likely to remain the biggest
foreign policy challenge for the balance of this century. He
suggested that the concurrent rise of India may create some
competition with the Chinese, though he noted that the Indian
Prime Minister's recent visit to China had apparently gone
smoothly. He also observed that Taiwan's referendum to enter
the United Nations under the name of Taiwan was not helpful,
and that the Australians would adhere to their long-standing
One China policy. He said it would be an important goal of
Australia's to "reduce the temperature" on Taiwan where
possible.


5. (C/REL AUS) FM Smith said that the Chinese government's
strategy appeared to be one of expanding economic benefits
for their people while remaining a one-party state,
suggesting that the Chinese government had only limited
respect for intellectual property rights, human rights, and
the rule of law. He noted that few countries had successfully
made the transition to a free market economy while
maintaining a command and control political regime,
suggesting that economic prosperity would inevitably lead to
freedom of thought.


6. (C/REL AUS) Ambassador Negroponte said that the Chinese
continue to browbeat the U.S. over Taiwan, and that it was
difficult to tell how much is posturing and how much is
genuine concern. In his recent conversations with Chinese
officials, Beijing appeared to be worried that President Chen
Shui-bian will pull off some action in the direction of
independence in the waning days of his Administration that
will force the Chinese to react. There may be different
views on this within the Chinese government, he noted. In his
meeting with Premier Wen Jia-bao recently, the Premier had
implied that once Chen was gone, Beijing could relax. Yet
other officials stressed the need for continued vigilance of
the Taiwan situation, and that the Chinese meanwhile continue
to build up their military capability across the Straits.


7. (C/REL AUS) FM Smith noted that the Japanese are sensitive
to Australia's engagement with China under the new
government, and they were aware of PM Rudd's personal
experience and links with China. He expressed a desire to
continue with current trilateral dialogue between Australia,
Qcontinue with current trilateral dialogue between Australia,
Japan, and the United States, with the US playing a middle
role. In the meantime, he said, Australia's bilateral
relationship with the Japanese is moving forward.


8. (C/REL AUS) DM Fitzgibbon said that Canberra would assess
China's military modernization in the forthcoming Defense
White Paper. He looked forward to inputs from the U.S. in
that process. Both sides agreed to begin a regular dialogue
on China's military modernization.


9. (C/REL AUS) CDF Houston agreed that China remained a key
dynamic factor in the region, observing from a visit last
year that the Indians increasingly view China as a threat.
He said the Indians were moving to increasingly high-end
weapons systems, with a particular focus on air capability.


10. (C/REL AUS) Ambassador Richardson noted the impressive
improvement in the quality and size of China's diplomatic
efforts in Asia. He said that the Ministry of Foreign Affairs
was active throughout the region, engaging with
sophistication and what appeared to be a sustained strategic

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intent. This is true in the Pacific island region, where
analysts earlier had dismissed Chinese diplomatic efforts as
a simple counter-balance to Taiwan's "checkbook" diplomacy in
the region. China's intent is in fact much more strategic,
he said.


11. (C/REL AUS) ONA Director Varghese echoed previous
comments that relations with China remain a large challenge
for Australia. He suggested the view that the Chinese are
broadly satisfied with the status quo in Asia, although their
strategic intentions may be evolving. The litmus test for
their strategic intent will be attempts to displace or
replace the United States in the region. Turning to Chinese
domestic politics, he observed that China's new middle class
now had a large economic stake in political stability, an
interest that could attenuate their interests in political
reform.


12. (C/REL AUS) Ambassador Richardson said that the Chinese
may be "over-reading the tea leaves" on the U.S. presidential
election and the foreign policies of the next U.S.
Administration. He also cautioned that the Chinese may
misinterpret Australian efforts to enhance the bilateral
relationship between Beijing and Canberra, and that the
Australian government has therefore been careful to stress to
the Chinese the centrality of the bilateral US-Australian
Alliance.


13. (C/REL AUS) Ambassador Negroponte described Chinese
economic growth as spectacular, suggesting it was likely to
continue. He recalled that Hu Jintao had explained to
President Bush that he needed to create 25 million jobs
annually, and that rapid economic growth was the precondition
for this. DS Negroponte said he believed the Chinese aspire
to be a great power, and are patient in pursuing that goal.
Ambassador Negroponte noted that smooth execution of the
Summer Olympics is a top priority for Beijing, as it will
provide them with enhanced domestic legitimacy and
international prestige. He recalled Chinese concerns about
the Olympics being "politicized" by human rights or Tibetan
activists.


14. (C/REL AUS) Ambassador Negroponte observed that China is
sometimes a popular political scapegoat in the US political
system, and that the Chinese sometimes bring this on
themselves through problems such as health and safety.
Secretary Gates added that zealous advocates of these problem

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areas in the United States may derail constructive engagement
if carried too far. He noted that the Chinese exhibit
patience, perspective, and the ability to develop
relationships over the long term. Secretary Gates stated
that U.S. engagement in the Pacific is a determining factor
in China's evolving role in Asia. Strong relationships with
Japan, India, and Australia and a continued naval presence in
QJapan, India, and Australia and a continued naval presence in
the region will shape Beijing's behavior. A U.S. pullback
from the region would be destabilizing over the long term.
He pointed out that many countries in the region tend to
trust the U.S. more than they trust each other. FM Smith
added that PM Rudd had made this point, of the importance of
sustaining an active US presence in the region, in his
remarks at the Brookings Institution last year.


15. (C/REL AUS) Secretary Gates described his visit to China
last fall and some of his discussions with the Chinese
military and civil leaders. This included the importance of
engaging in a serious strategic dialogue on military
questions, in order to clarify Chinese threat perceptions and
their views on the role and possible use of nuclear weapons -
a dialogue that had been agreed upon by Presidents Hu and
Bush in their April 2006 summit. Secretary Gates recalled the
value of similar strategic discussions with the Soviets
during the Cold War, which - though slow and painful - had

CANBERRA 00000185 004 OF 008


helped to avoid some serious misunderstandings and
miscalculations on both sides. The Secretary cautioned that
similar engagement and dialogue with the Chinese will require
time and patience. He noted that some small progress had been
made, with the Chinese dispatching an officer from the PLA
Second Artillery to the Defense Consultative Talks in
November 2007, and with the prospective installation of a
direct telephone link between the two militaries.


16. (C/REL AUS) Ambassador Negroponte also mentioned his
discussions with the Chinese on Iran, in which he noted that
the Chinese would find themselves with serious energy
security problems on their hands should the Iranian problem
destabilize the Gulf. He said that attuning Chinese
leadership to broader strategic interests beyond their
immediate economic interests required work and patience, but
that the Chinese are eager to listen. It is therefore
important to keep China engaged through strategic dialogue.
FM Smith concurred with the importance of this dialogue with
the Chinese and indicated Canberra's desire to support this
dialogue.


17. (C/REL AUS) On the topic of Chinese long term ambitions,
PACOM Admiral Keating noted the crucial importance of
learning about Chinese intent as well as military capability,
suggesting we know far more about the latter than the former.
He then raised an anecdote in a discussion with a PLAN
officer, who had suggested during one of Admiral Keating's'
two visits to China, that in the long run the U.S. should
take care of the Eastern Pacific and the Chinese would take
care of the Western Pacific. Admiral Keating noted that the
Chinese officer in question did not appear to be joking,
citing this as further evidence for the proposition that
Beijing has long term ambitions and the patience to execute
over time. He suggested that his Chinese interlocutors had
apparently "connected the dots" from observing the MALABAR
exercise involving the US, Japan, Indonesia, Singapore and
Australia that they were being "militarily surrounded." He
proposed that they could only be disabused of these
inferences by more transparency, including involving them
more deeply as observers in such exercises, though this was
not without some risk of excessive disclosure.


18. (C/REL AUS) CDF Houston on this topic explained that the
Australians are extremely careful to preserve reciprocity and
symmetry in their military interactions with the Chinese,
whereas the Americans appeared to be moving away from that
practice. CJCS Admiral Mullen responded that he had obtained
some breakthroughs in Chinese transparency during his visit
to China by virtue of tough negotiations up front on
reciprocity. He cited two examples: some unprecedented
Qreciprocity. He cited two examples: some unprecedented
exposure to Chinese Navy vessels, and a personal
communication by Chinese PLAN Admiral Wu Sheng-li that the
Chinese had incorrectly handled the Kitty Hawk port denial
incident.


19. (C/REL AUS) Admirals Keating and Mullen discussed the
role of military personnel exchange with the PLA. Admiral
Keating briefly noted the program of NCO to NCO exchanges.
Secretary Gates agreed that the exchange of officers and

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NCO's at various levels was a worthwhile long term
investment.


20. (C/REL AUS) Ambassador Negroponte closed the China
discussion by recapping the notion of pressing China to be a
"responsible stakeholder", a notion originally developed by
the DepSec's predecessor in his strategic dialogue with the
Chinese. Ambassador Negroponte recalled that in his recent
discussions with Chinese VFM Dai Bingguo, the Chinese seemed
to taking hold of this idea to some degree.

NORTH KOREA

CANBERRA 00000185 005 OF 008


--------------


21. (S/REL AUS) Ambassador Negroponte briefed on progress on
the Six-Party-Talks (6PT) efforts to end North Korea's
nuclear program. While North Korea had begun to dismantle
its nuclear infrastructure, he noted, it continues to delay
meeting its obligation to issue a complete declaration of its
nuclear program and holdings. It remains unclear whether the
North Korean regime had sincerely decided to end its nuclear
program, or whether it is simply delaying the process while
waiting for a new U.S. administration to take power, he
added. In any case, the U.S. government puts more value on
the substance of denuclearization than on meeting particular
deadlines. China's involvement in the process had been
critical thus far, he said, citing its unprecedented decision
to join UN Security Council consensus in condemning North
Korea's nuclear weapons test in 2006. Changing North Korea's
behavior would continue to require active multilateral
engagement, he said. During her travel to Seoul, Beijing and
Tokyo during the week of February 24, Secretary Rice would
focus on moving the process forward.


22. (S/REL AUS) Secretary Gates added that it is possible
that North Korea will never surrender its nuclear weapons,
and that probably no one knows the direction of North Korean
nuclear policy aside from Kim Jong-il. But in contrast to
past efforts to engage North Korea, the current 6PT process
features immediate feedback mechanisms that link concessions
to North Korea to its specific progress on denuclearization.
North Korea had never participated in such a process
previously, he noted. Though it may not intend to surrender
its weapons now, it might be possible through the
step-by-step approach to lead it down a path that ends in
that result.


23. (C/REL AUS) FM Smith expressed Australia's strong
support for the 6PT process, and said that it would be
prepared to release a significant package of humanitarian
assistance to North Korea at an appropriate point. But he
noted Australia's strong interest in participating in any
regional security structure that might emerge from the
process. While there is no longer a North Korean Embassy in
Canberra, Australia maintained diplomatic contacts with the
DPRK and would be prepared to use them to help advance the
U.S. and Australia's mutual interests. Both U.S. and
Australian officials welcomed the election of President Lee
as a constructive step forward in coordinating pressure on
the North Koreans, but Secretary L'Estrange noted that there
might be a risk that Lee's harder line might provoke greater
North Korean intransigence.

INDIA
--------------


24. (C/REL AUS) Both sides acknowledged India's increasing
Q24. (C/REL AUS) Both sides acknowledged India's increasing
importance in Asian security, and stressed they would
continue efforts to enhance strategic and military
cooperation with the country. Secretary Gates noted that the
U.S. had recently completed a robust military exercise with
the Indians, and that the U.S. is increasing its military
exchanges. The U.S. is also enhancing its defense trade,
with plans to sell six C-130J aircraft, and for American
companies to participate in India's competition for a
multi-role combat aircraft. Such sales would end India's
previous heavy reliance on Russia as an arms supplier, he
said.


25. (S/REL AUS) Ambassador Negroponte said the U.S. hopes
the Indian government would soon complete the process of
ratifying its civil nuclear cooperation, and then conclude
agreements with the International Atomic Energy Agency (IAEA)
and the Nuclear Suppliers Group (NSG). He acknowledged the

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new Australian government's concern about selling uranium to
a non-signatory of the Nuclear Non-Proliferation Treaty
(NPT),but expressed hope that the U.S. and Australia could
find common ground on the issue. FM Smith responded that
Australia recognizes the strategic importance of the civil
nuclear cooperation agreement for both the U.S. and India.
But he said his government would encounter political
difficulties if it allowed IAEA and NSG deals to go forward
with India in spite of the Australian Labor Party's
longstanding opposition to nuclear cooperation with non-NPT
signatories. In any case, he noted it is unclear whether the
Indian government would formally ratify its agreement with
the U.S. The GOA would therefore wait to formulate a
position until the Indian government formally ratifies the
cooperation deal with the U.S. and takes the issue to the
IAEA and NSG. DM Fitzgibbon added that both he and Smith are
personally supportive of such enhanced cooperation with
India, but that to succeed, they would need to approach the
political aspects of the issue sensitively.

AFGHANISTAN
--------------


26. (C/REL AUS) FM Smith asserted that the GOA continues to
regard Afghanistan as an important national interest, and
that Australia is solid in its commitment to continued
participation in the military mission there. Moreover, it
would soon announce a significant package of new assistance
aimed at building Afghanistan's civilian capacity. But like
the U.S., he said Australia remains disappointed at the
uneven participation of the Europeans in military operations.
DM Fitzgibbon, expressing appreciation for U.S. support for
Australia's greater access to NATO planning efforts, said he
hopes to work closely with the U.S. at the NATO summit in
Bucharest to secure a stronger European commitment to
military operations in Afghanistan. While he agreed with
Smith that Australian support for the Afghanistan operation
remains strong, he noted the importance of boosting NATO's
participation to achieving measurable progress on the ground
and to maintaining public support in Australia.


27. (C/REL AUS) Secretary Gates echoed Fitzgibbon's concerns
about Europe's spotty contribution to the NATO effort.
Failure in the Afghanistan mission would have serious
implications for the future of the alliance, he said. It
would also threaten European security, he said, noting that
he had pointed out in his speech at the Wehrkunde conference
in February that recent terrorist attacks in Europe had
emanated from either Afghanistan or Pakistan. For now, he
said NATO forces had succeeded in clearing areas of Taliban
operations, but have insufficient assets to hold such areas
Qoperations, but have insufficient assets to hold such areas
and build on them. That will require greater NATO support
for building the capacity of Afghan security forces, and
while there has been significant progress in this area, NATO
must intensify its provision of training and equipment to
them. He noted that narcotics trafficking and corruption
remains a serious challenge in securing the country. He
agreed with FM Smith on the importance of accelerating the
appointment of a UN Representative following the collapse of
efforts to appoint Paddy Ashdown, and said that the State
Department is working with the UN to appoint someone
acceptable to President Karzai.


28. (C/REL AUS) FM Smith expressed strong gratitude to the
U.S. for its temporary housing of the Australian Embassy at
the U.S. Embassy in Kabul following the recent attack on the
Serena Hotel, where the Australian Embassy had previously
been located. He noted that there are continuing reports of
a serious terrorist threat to Australian diplomatic
operations in Kabul, and that the U.S. compound is the safest
place for Australian diplomats to live and work while they
plan the construction of their own stand-alone compound.

CANBERRA 00000185 007 OF 008



PAKISTAN
--------------


29. (C/REL AUS) FM Smith noted Australia's serious concern
about the situation in Pakistan, which he described as
inextricably related to the threats emanating from
Afghanistan. While the recent elections had been
surprisingly calm, he said there will be a significant
challenge in persuading Musharraf and the opposition parties
to work together against the extremist threat. Supporting
Pakistan's continued democratic development would remain an
important Australian goal, he said.


30. (C/REL AUS) Secretary Gates and Ambassador Negroponte
agreed with Smith's assessment, and noted a number of
additional concerns, including:

--The likelihood it will take longer than expected for the
opposition parties to work out a deal to form a government.
Ambassador Negroponte said Nawaz Sharif's Pakistani Muslim
League (PML-Q) and Asif Zadari's Pakistan People's Party
(PPP) are likely aiming for a sufficient majority to
reinstate the Supreme Court and/or impeach Musharraf. As any
weakening of the Pakistani presidency would be a setback for
stability in the country, he noted that the U.S. is
encouraging both parties to engage with Musharraf.

--The risk that the new Pakistani government will be more
interested in negotiating with insurgents than in fighting
them. Secretary Gates noted that a further complication is
that the Pakistani military is more organized to counter
India than to conduct counter-insurgency operations, and that
until recently, senior military leaders tended to regard the
Federal Administered Tribal Areas (FATA) as more of a
nuisance than a serious security challenge. New Pakistani
army chief General Kiyani seems serious about confronting the
insurgency, but it remains unclear whether he will have
sufficient political support to do so, he said. An
additional challenge, he noted, is that many military
commanders remain either sympathetic or indifferent to the
insurgents. Admiral Mullen added that the deaths of more
than 600 Pakistanis at the hands of extremists in the
previous six months had helped focus the military on the
serious security threat in the FATA, and that General Kiyani
is approaching the challenge with a sense of urgency. But he
also noted that the Pakistani army is suffering from serious
fatigue.

--Insufficient attention to developing the FATA. Ambassador
Negroponte expressed concern that Musharraf's 2006 deal to
empower local FATA tribal leaders in exchange for a military
disengagement had resulted in serious neglect of the region's
development needs. He encouraged the Australian government
to work with the U.S. in focusing the Pakistani government on
the need to devote greater efforts to developing the FATA,
Qthe need to devote greater efforts to developing the FATA,
and asked whether the Australian government could also devote
more assistance in this direction.


31. (S/REL AUS) Both U.S. and Australian officials
underscored the continuing need for assistance to Pakistani
security forces, highlighting the significantly higher
financial benefits insurgents pay their personnel. For
example, insurgents collect 10,000 rupees a month and have
the use of a vehicle, while members of Pakistan's frontier
corps receive only 4,000 rupiahs. Admiral Mullen noted that
the Pakistani armed forces remain eager for U.S. military
support, but that their sensitivity to any appearance that
they are surrogates for U.S interests requires great
discretion in providing assistance. DM Fitzgibbon reported
that the Pakistanis had reported recently that one of their
most important assistance priorities is training and

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equipment (such as night vision capability) to secure their
border with Afghanistan. On the broader issue of securing
Pakistan's nuclear arsenal, Admiral Mullen reported that he
is comfortable as far as he is aware of security measures in
place, but that Pakistani security restrictions prevent our
full access to the sites.


32. (C/REL AUS) Ambassador Negroponte noted that while there
are serious threats and challenges with Pakistan, Secretary
Rice often expresses concern that there is too little
attention to some of the positive trends in the country. He
said that Musharraf had done a fairly good job in holding the
country together in the face of serious threats, and that he
had succeeded in instituting significant reforms and growing
the economy. He continues to deserve support.

MCCALLUM