DEMARCHE PRIOR TO POSSIBLE VISIT BY PAKISTAN

C O N F I D E N T I A L STATE 100914

SIPDIS

E.O. 12958: DECL: 09/17/2018
TAGS: CH EAID ECON EFIN PGOV PK PREL PTER
SUBJECT: DEMARCHE PRIOR TO POSSIBLE VISIT BY PAKISTAN
PRESIDENT ZARDARI TO BEIJING

Classified By: EAP Assistant Secretary Christopher R. Hill,
Reasons: 1.4(b) and 1.4(d)


1. (U) This is an action request for Embassy Beijing. See
requested action in Para 3.


2. (C) Background: China shares our concern about instability
in Pakistan and has requested closer coordination with
the United States on Pakistan. China has significant
interests in Pakistan and provided some financial support
to the Government of Pakistan in the past year to alleviate
short-term problems with Pakistan,s current account. The
Chinese
deposited $500 million in the State Bank of Pakistan to
boost reserves. However, the Chinese asserted the deposit was
only intended as a short-term loan and was not intended to
serve
s a permanent grant to Pakistan.


3. (U) Action Request: In the event of a visit of Pakistan,s
President Asif Zardari to Beijing, the Department requests
that Embassy Beijing convey the following points to the
Chinese
Foreign Ministry at the highest appropriate level.


4. (C/REL PRC) Talking points:
-
- The United States encourages the Chinese Government to
join with the international community in urging Pakistan,s
leadership to undertake strong measures to resolve
Pakistan,s security and economic crises. Stability in
Pakistan is a shared interest of the United States, China,
and the
international community.
-
- The United States requests that you urge President Zardari
to maintain
military pressure against both al Qaeda and the Taliban.
Recent efforts in Swat and other areas of the Northwest
Frontier Province and in the Federally Administered Tribal
Areas have disrupted extremist efforts both within Pakistan
and across the border in Afghanistan, but much remains to
be done.
-
- We believe Pakistan must act quickly to stabilize the
economy and restore confidence by taking immediate steps to:
a) further cut fuel subsidies and eliminate them by the
end of 2008 calendar year, b) cease borrowing from the central
bank and resume market borrowing to fund the budget deficit,
and c) resume and accelerate privatization. Accordingly, if
Pakistan takes credible steps to stabilize its economy, the
international community should work together to organize
external finance to support Pakistan.
-
- The United States would welcome continued consultation with
the
Chinese Government on developments in Pakistan.
-
Musharraf,s Future (if asked):
-
-President Zardari committed to providing his predecessor
Pervez Musharraf indemnity against prosecution for acts
Musharraf allegedly committed in office. We believe he
should keep that commitment.
-
End Talking Points.


5. (U) Department requests that Post deliver this demarche
when President Zardari,s visit is confirmed and report back.
RICE