Identifier
Created
Classification
Origin
09BEIJING1844
2009-07-05 02:50:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

SCO SUMMIT: CHINA WEIGHS LEADERSHIP ROLE AS

Tags:  PREL PTER EAID ETRD ENRG ZK XD CH RS IR 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001844 

SIPDIS

E.O. 12958: DECL: 07/06/2034
TAGS: PREL PTER EAID ETRD ENRG ZK XD CH RS IR
SUBJECT: SCO SUMMIT: CHINA WEIGHS LEADERSHIP ROLE AS
ECONOMY TAKES CENTER STAGE

BEIJING 00001844 001.2 OF 003


Classified By: Acting Political Section Chief Ben Moeling. Reasons 1.4
(B/D).

Summary
-------

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001844

SIPDIS

E.O. 12958: DECL: 07/06/2034
TAGS: PREL PTER EAID ETRD ENRG ZK XD CH RS IR
SUBJECT: SCO SUMMIT: CHINA WEIGHS LEADERSHIP ROLE AS
ECONOMY TAKES CENTER STAGE

BEIJING 00001844 001.2 OF 003


Classified By: Acting Political Section Chief Ben Moeling. Reasons 1.4
(B/D).

Summary
--------------


1. (C) Chinese and other Shanghai Organization (SCO) member
countries' diplomats told us that the June 16 SCO summit in
Yekaterinburg had served primarily as a forum for SCO members
to demonstrate a sense of urgency in responding to the global
financial crisis, eclipsing discussion about increasing
security coordination. MFA confirmed that the USD 10 billion
assistance package announced at the summit was new funding,
though Central Asian recipient countries had not been
consulted beforehand and remained unclear about the details.
The new assistance to SCO members may be an attempt by China
to demonstrate leadership in the global economic crisis.
However, in the Chinese foreign policy community there was
debate about the wisdom of assuming such a leadership role in
addressing the crisis in the region. China had reservations
about expanding the role of the SCO and believes it was not
suited to addressing "sensitive issues" such as water-sharing
and nonproliferation. Beijing-based Central Asian EmbOffs,
who remain cautious about their relations with China, said
they shared this view. On the sidelines of the SCO summit,
Chinese President Hu Jintao held a meeting with Indian Prime
Minister Manmohan Singh, during which Hu emphasized the
positive nature of bilateral ties and did not discuss China's
border dispute with India. End Summary.

Global Financial Crisis on Center Stage at SCO Summit
-------------- --------------


2. (C) In a June 24 briefing on the June 16 Shanghai
Cooperation Organization (SCO) summit in Yekaterinburg, MFA
Eurasian Affairs Department SCO Division Director Wang Wenli
said that the summit had served as a platform for SCO members
to demonstrate a sense of urgency in responding to the global
financial crisis. Wang noted that China believed the most

notable outcome had been SCO members' emphasis on continuing
regional development efforts and intensifying economic
cooperation, and that leaders reached a consensus on the need
to accelerate joint efforts in economics, transportation and
communications. Wang reported that leaders also expressed a
desire to use their own currencies in bilateral trade but no
specific proposals were tabled. She indicated that the focus
on the economic situation in Central Asia eclipsed discussion
about increasing security coordination, although she claimed
that SCO member states agreed on an anti-terrorism convention
at the meeting.

China's New Assistance Announcement
--------------


3. (C) Wang stated that China's announcement at the SCO
summit of USD 10 billion in aid did not overlap with
previously announced assistance to SCO members and was in
addition to the bilateral assistance to Kazakhstan announced
in April 2009. Wang downplayed the significance of the new
assistance to SCO members, insisting that it was a relatively
small increase in China's overall bilateral aid to the
region. MFA Eurasian Affairs Department Central Asian
Division Deputy Director Guo Yu told PolOff June 25 that the
new assistance package was aimed at helping the Central Asian
countries deal with the economic downturn, and Beijing was
currently studying how this new funding could be best
implemented. He noted that the first step would be to work
with the recipient countries to seek their input on immediate
needs.

Recipient Countries not Briefed in Advance
--------------


4. (C) In a separate meeting, Tajikistan EmbOff Najmiddin
Imomov noted that Tajikistan had only learned of this
proposal from China's public announcement at the summit and
said his government had no additional details of the
arrangement. Najmiddin noted that, based on previous
negotiations between China and Tajikistan, he expected it
would take considerable time before China delivered the
funds. Separately, Kazakhstan EmbOff Askar Kuttykadam
confirmed that there had been no internal discussions with

BEIJING 00001844 002.2 OF 003


recipient countries before the announcement of the new
assistance, adding that China had yet to make progress in
executing the $10 billion in bilateral aid to Kazakhstan
pledged in April.

China Contemplates Leadership Role on Economic Crisis
-------------- --------------


5. (C) Chen Xinming, director of the Russian Studies
Department at Renmin University, told PolOff June 25 that SCO
member countries used the summit as a forum to present PRC
officials with their concerns about the serious impact of the
global economic downturn, highlighting its potential to
damage social stability and security efforts. Chen said that
Central Asian countries were looking to China to take a
leading role during the downturn, and Beijing felt a need to
demonstrate leadership by taking measures to weather the
economic crisis. China's announcement of USD 10 billion in
aid was an attempt to demonstrate such leadership, Chen said,
but given China's traditional low-key foreign policy, Chinese
leaders were still debating whether China could or should
assume a higher-profile leadership role in addressing the
economic crisis in the region.

SCO Not for Sensitive Issues Like Water, Non-Pro
-------------- ---


6. (C) When asked about SCO efforts to address water-sharing
measures among Central Asian countries, MFA's Wang stressed
that consultation and consensus-building among members were
basic tenets of the organization, and suggested that
"complicated and sensitive" matters such as water-sharing
were more appropriately solved through bilateral
consultations. (Note: Tajik EmbOff Najmiddin acknowledged
the difficult nature of the water-sharing issue but said that
China had not sought to participate in efforts to seek a
resolution. End note.) Asked whether SCO members discussed
recent developments on the Korean peninsula, including the
North Korean nuclear and missile tests, Wang said that the
issue was not a focus of discussion among member countries
and that the SCO was not the proper forum for dealing with
security concerns such as the North Korean and Iranian
nuclear programs, adding that there was a lack of consensus
among members on nuclear non-proliferation.

Central Asians Still Cautious on Engagement with China
-------------- --------------


7. (C) Kazakh PolOff Askar Kuttykadam noted there was debate
in Kazakhstan over whether SCO membership was still in
Kazakhstan's interest. He said that Kazakhstan-Russian
relations remained strong, but relations with China lagged
behind, adding that his biggest worry was about illegal
Chinese migration into Kazakhstan, which he said some Kazakhs
estimate to be as high as 300,000. Kuttykadam also noted
that in 2007, Kazakhstan, citing Kazakh laws that prohibit
the movement of foreign troops through its territory, had
refused to allow Chinese troops to pass through Kazakhstan en
route to Russian military exercises, which forced China's
troops to travel a much less convenient route around
Kazakhstan. Tajik EmbOff Najmiddin Imomov suggested that
Tajikistan continued to place a higher priority on its
relations with Russia than with China, noting that
Tajikistan's largest embassy was in Moscow and that the
recent SCO summit provided Tajikistan with a useful forum for
pushing forward enhanced cooperation with fellow SCO members
on food safety, an issue of particular importance to
Tajikistan.

Central Asian Bilats Also Focus on the Economy
-------------- -


8. (C) MFA Central Asian Division Deputy Director Guo Yu
reported that President Hu's meetings with leaders of
Tajikistan, Kyrgyzstan and Uzbekistan on the margins of the
SCO summit similarly had focused on measures to deal with the
economic crisis. Hu stressed that economic crisis in Central
Asia was a shared challenge for China, and in response China
would deepen cooperation on mining, transportation,
agriculture, trade and other economic issues. While SCO
Division's Wang reiterated China's opposition to the Asian
Development Bank's inclusion of projects in Arunachal

BEIJING 00001844 003.2 OF 003


Pradesh, which China claims as its territory, in its 2010
India Country Strategy, she said that that the territorial
dispute was not raised in the China-India bilateral meeting
held at the summit.
GOLDBERG