AID ADMINISTRATOR FORE'S MEETING WITH CHINESE VM YI

UNCLAS SECTION 01 OF 02 TOKYO 001166 SIPDIS SIPDIS STATE FOR DFA FORE STATE FOR EAP/CM SECOR AND CARTIN STATE FOR EEB/IFD/ODF WEBSTER STATE PASS TO USAID FOR ODP/AA TURNER AND AFRICA/AA ALMQUIST NSC FOR SHRIER, TONG E.O. 12958: N/A TAGS: EAID ECON JA PREL CH OECD SUBJECT: AID ADMINISTRATOR FORE'S MEETING WITH CHINESE VM YI REF: A. BEIJING 1225 ¶B. TOKYO 841 ¶1. (SBU) Summary. While China is interested in learning more about U.S. official development assistance (ODA),Chinese Commerce Vice Minister YI Xiaozhun declined to commit to a bilateral dialogue on development issues during an April 7 meeting with USAID Administrator Henrietta Fore. Yi stated most Chinese aid is funneled through the Ministry of Commerce, but the Health, Agriculture and other Ministries also have aid budgets. China is concerned with the high price of agricultural products and Yi believes the G8 countries should act to stabilize prices. Yi's designation of an individual as point of contact for a possible development dialogue suggests China may agree to the idea sometime in the future. End Summary. ¶2. (SBU) The U.S. and China should launch a dialogue to discuss development issues of interest to both countries, Aid Administrator and Director of Foreign Assistance (DFA) Henrietta Fore proposed to Chinese Ministry of Commerce (MOFCOM) Vice Minister (VM) Yi Xiaozhun during an April 7 meeting on the fringes of the G8 Development Ministerial in Tokyo. In particular, the two sides could discuss how ODA is structured within the respective governments, successes and failures of ODA programs, and how each works with multilateral organizations, Fore said. She suggested the dialogue be kicked-off in May or June in Beijing with a follow-up meeting in Washington in September. Alternatively, the dialogue could be held in Japan on the fringes of the May 28-30 Tokyo International Conference on African Development (TICAD). ¶3. (SBU) While China would like to learn more about how the United States' aid program is structured, how the USG provides assistance, and particularly what is the primary focus of U.S. ODA, Yi declined to commit to a bilateral dialogue stating he would like to consult with colleagues. Yi suggested a working-level meeting would be most fruitful as these are the individuals most familiar with development programming. "I am more familiar with ODA as a recipient," Yi joked. Yi designated MOFCOM Department of Aid to Foreign Countries Director Liu Junfeng to be the point of contact going forward. (Note. Also accompanying Yi was MOFCOM Department of Aid to Foreign Countries Director General Wang Shichun. End Note.) DFA Fore selected USAID Office of Development Partners Director Karen Turner as the U.S. point of contact. ¶4. (SBU) DFA Fore stated U.S. ODA policy has benefited from input by scholars, non-profit organizations, journalists and the private sector. She suggested the proposed development dialogue could also include these groups. Yi demurred, stating while Chinese scholars are knowledgeable in micro and macro economics, development economics is not yet a popular subject among Chinese academics. ¶5. (SBU) Yi explained most Chinese assistance is channeled through MOFCOM, but noted the Health, Agriculture and other Ministries also have aid budgets. The Chinese government has not been very focused in providing development assistance and has funded projects related to agriculture, light industry, public health programs, schools, and even sports stadiums, Yi acknowledged. ¶6. (SBU) USAID Africa Bureau Assistant Administrator Katherine Almquist noted China's increasing importance on the continent and suggested the U.S. and China should share ODA strategies to determine if cooperation is possible. The U.S. is working with the European Union and Japan in several African countries and believes the combined effort leads to a greater impact, Almquist said. Yi stated China does not have any single person overseeing aid to Africa. ¶7. (SBU) Yi indicated China is concerned with current high TOKYO 00001166 002 OF 002 prices for agriculture products. Many Chinese have just risen out of poverty and cannot pay these high prices. The G8 countries should work together to stabilize prices to prevent poor people in developing countries from suffering, Yi observed. ¶8. (SBU) Comment. While VM Yi was hesitant to agree to a development dialogue at this time, he was open and friendly during the meeting. Yi spoke entirely in English, despite having an interpreter at his side. Yi's designating a point of contact for a possible bilateral may be a good sign the Chinese could be persuaded to enter into a dialogue, albeit with persistent coaxing from the U.S. End Comment. ¶9. DFA Fore has cleared this cable. SCHIEFFER