Identifier
Created
Classification
Origin
08KOLKATA202
2008-07-09 10:27:00
CONFIDENTIAL
Consulate Kolkata
Cable title:  

KOLKATA-BASED CHINESE CONSUL GENERAL EXPRESSES PERSONAL

Tags:  ENRG PREL EINV PINR CH IN 
pdf how-to read a cable
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FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC PRIORITY 2066
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEIDN/DNI WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/CDR USPACOM HONOLULU HI
RUEHCI/AMCONSUL KOLKATA 2525
C O N F I D E N T I A L SECTION 01 OF 02 KOLKATA 000202 

SIPDIS

E.O. 12958: DECL: 7/9/2018
TAGS: ENRG PREL EINV PINR CH IN
SUBJECT: KOLKATA-BASED CHINESE CONSUL GENERAL EXPRESSES PERSONAL
RESERVATIONS ABOUT INDO-U.S. NUKE DEAL

KOLKATA 00000202 001.2 OF 002


CLASSIFIED BY: Henry V. Jardine, Principal Officer, U.S.
Consulate General Calcutta, STATE.
REASON: 1.4 (b),(c),(d)



C O N F I D E N T I A L SECTION 01 OF 02 KOLKATA 000202

SIPDIS

E.O. 12958: DECL: 7/9/2018
TAGS: ENRG PREL EINV PINR CH IN
SUBJECT: KOLKATA-BASED CHINESE CONSUL GENERAL EXPRESSES PERSONAL
RESERVATIONS ABOUT INDO-U.S. NUKE DEAL

KOLKATA 00000202 001.2 OF 002


CLASSIFIED BY: Henry V. Jardine, Principal Officer, U.S.
Consulate General Calcutta, STATE.
REASON: 1.4 (b),(c),(d)




1. (C) Summary: On July 2, ConGen met with Kolkata-based
Chinese Consul General Mao Siwei and discussed Chinese
perspectives on the Indo-U.S. civil nuclear agreement, Chinese
incursions across the border in Sikkim and Arunachal Pradesh and
Chinese interest in developing the power sector in India. Mao
said that his government would not block the process of
approving India's agreements with the International Atomic
Energy Agency (IAEA) or the Nuclear Suppliers Group (NSG).
However, Mao also offered what he characterized as his "personal
view" on the civil nuclear agreement and said that it reflected
a U.S. "double standard" and the creation of a significant
precedent within the international non-proliferation system.
Mao said that the U.S. had worked through the Nuclear
Non-Proliferation Treaty (NPT) to create the existing
non-proliferation framework with five recognized nuclear powers.
He argued that the Indo-U.S. agreement effectively expands the
system to include India, making it the sixth recognized nuclear
power. Mao asked rhetorically, "why could not Iran or Pakistan
be included and what happens in 5 or 10 years, when China is
more powerful and can force its will like the U.S.?" On the
border incursions, Mao dismissed them as simply mutual
misunderstanding over the exact location of the border and
attributed China's infrastructure and road building along the
border as important for the comfort of the soldiers and for
improving trade in the region. Mao also commented that China
and its power companies are very keen to sell coal-fired power
stations in India and seemed less concerned by the environmental
implications, commenting that if the Indians block the power
stations, China will sell them in Africa. End Summary.


2. (C) On July 2 ConGen met with Mao at the Bengal Club,
following RSO-Delhi guidance on engaging with a critical threat
country representaQes. Mao had earlier expressed a strong

desire to host ConGen at his home for dinner with several other
Chinese officers. During the meeting, ConGen asked Mao about
his government's views on the Indo-U.S. civil nuclear agreement.
Mao said that his government would not block the process of
approving India's agreements with the IAEA or the NSG. However,
Mao went on to offer what he characterized as his own "personal
views" and expressed irritation with what he considered to be
the U.S. "double standard." Mao said that the U.S. being the
most powerful country in the world earlier had pushed for the
existing international non-proliferation framework through the
NPT and the Comprehensive Test Ban Treaty (CTBT),which he noted
that the USG hypocritically had not signed. That system created
five acknowledged nuclear powers. Now, he said, the USG wants
in effect to expand that list to include India. He asked, "why
India, why not Pakistan or Iran?" He added the USG can do this
now because it is still strong, "but what happens in 5 to 10
years when China grows stronger?" China might also want to also
make exceptions for other countries. Since the precedent is
set, China should be able to bring its friends into the nuclear
club.


3. (C) Mao did not characterize the civil-nuclear agreement as
part of a broader strategic initiative. He avoided directly
expressing his personal or official perspectives on Indo-U.S.
strategic cooperation, only saying that "some in China" and even
some observers in the U.S. see the civil nuclear agreement as
part of a strategic effort to build-up India as a counter-
weight to the China.


4. (C) ConGen asked Mao about the recent disputes over the
Chinese military entering Sikkim's northern "Finger Area" and
whether the number of disputed "incursions" by Chinese units
into Sikkim and Arunachal Pradesh had increased over the past
year (Note: Local Indian security officials have told CoQn
that they believe the border incursions have increased notably
in frequency and unit size over the last year. End Note.) Mao
responded that he did not know about the details of possible
incursions into Sikkim. However, he commented that the border
is still in dispute and so the Chinese believe that
misunderstandings do arise. When asked about reported road
construction and infrastructure improvements on the China side
of the border, Mao said that improvements were happening to
enhance the quality of life for Chinese troops posted there and
to facilitate trade and commerce in the region.


5. (C) ConGen inquired as to what was Mao and China's
commercial focus in Eastern India. Mao said that China has very

KOLKATA 00000202 002.2 OF 002


interested in exporting coal-fired power stations. He noted
that eastern India has much of the country's coal and that China
had many power companies that have fully exploited China's
domestic market and were seeking new markets abroad. India
represented a perfect opportunity as it had a great demand for
power and the coals resources at hand. Although, he recognized
India's coal was of poor quality and high ash content. He again
dismissed the civil nuclear agreement, commenting that nuclear
power would not meet India's energy needs. Mao said that in
December 2006 President Hu Jintao had signed an agreement with
Prime Minister Manmohan Singh to provide 16,000 MW out of 79,000
MW proposed in the 11th Five Year Plan, or 22 percent of India's
planned power generation. In August 2004, Dongfang Electricals
won two contracts in West Bengal valued at USD 520 million for
one 300 MW unit at Durgapur PQects Limited (DPL),Durgapur,
which was commissioned this past June, and two 300 MW units in
Sagardighi, also soon to be commissioned.


6. (SBU) Separately, on July 6 when Union Power Minister
Jayram Ramesh visited the under-construction 1,000 MW Damodar
Valley Corporation (DVC) plant site near Durgapur, Ramesh
complained that West Bengal and other states were allowing
Chinese companies like Dongfang Electricals and Shanghai
Electricals to construct power units in India in violation of
Central Electricity Authority (CEA) regulations. According to
Ramesh, the Chinese plants would not be able to use Indian coal
due to its high ash content of 40 to 45 percent, but would
import coal with 18 to 22 percent ash. Ramesh claimed that the
GOWB had tweaked the bidding process to favor the Chinese by
proposing 300 MW power stations and so CEA and Indian
manufacturers like Bharat Heavy Electricals Limited (BHEL) were
unable to bid, as they produce stations at other capacities from
210 to 800 MWs but not at 300 MWs.


7. (C) Congen questioned Mao as to whether, given the growing
concerns about global warming, it was helpful for China to be
developing coal power stations in India and asked if the
stations would use any technology to control emissions. Mao did
not respond to the environmental implications. He commented
that Chinese companies had experience with constructing coal
power stations but that China's domestic market was becoming
saturated. He added that if the Indians closed their country to
the Chinese power companies that they will look to markets in
Africa, and specifically mentioned South Africa.


8. (C) Bio Note: Mao Shwie has had extensive experience in
South Asia with previous assignments in Pakistan and in New
Delhi. Mao is in his early 50's speaks English well and is
present with his wife. He started his assignment and opened the
new Chinese Consulate in Kolkata in August 2007. He has been
very assertive in his meetings with local contacts in Kolkata.
According, to the Finnish Honorary Consul and local businessman
Satish Kapoor, Mao asked to funnel funds through Kapoor's
personal account to purchase second-hand Japanese cars for his
consulate's motorpool, claiming that the consulate had not yet
established a local bank account. According Bangladesh Deputy
High Commissioner Mohammad Imran, when Imran had invited Mao for
a small dinner at the Deputy High, Mao requested additional
invites for other members of his staff. When the Chinese
arrived at the Deputy High Commission, the other officers split
off and conducted a surveillance of the Deputy High Commission
compound and specifically searched for the communication
equipment


9. (C) Comment: Mao confirmed China's official position that
it would not block India's efforts to gain International Atomic
Energy Agency (IAEA) or the Nuclear Suppliers Group (NSG).
However, his "personal view" may be shared by other Chinese
officials and may portend longer-term implications of the
nuclear initiative. His belief that the USG used its power and
authority to create the existing non-proliferation system and
now seeks to make a unique exception is shared and expressed by
others, even in the United States. Mao was explicit in
conveying his belief that just as a powerful USG defines the
international context today, a strong China intends to do so in
the future, including possibly on nuclear issues. A reflection
of China's present commercial rise and international impact is
in the narrow context of its desire to export coal power plants
to India or Africa. Its aggressive efforts to export dirty
power technologies to emerging markets at a time when the global
community is starting to confront the problem of greenhouse
gasses will only undermine international efforts at combating
global warming.
JARDINE