MFA OFFICIALS EXPRESS CONCERN ABOUT U.S. POLICY ON

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 002021 SIPDIS E.O. 12958: DECL: 07/16/2034 TAGS: PREL PGOV EINV CH HK SUBJECT: MFA OFFICIALS EXPRESS CONCERN ABOUT U.S. POLICY ON HONG KONG Classified By: Acting Political Minister Counselor Ben Moeling. Reasons 1.4 (b),(d). Summary -------------- ¶1. (C) In June 16 meetings with visiting Hong Kong Consul General Joseph Donovan, MFA officials urged the U.S. to act cautiously toward the universal suffrage question in Hong Kong, but welcomed private advice from Washington on the issue. One official commented that the large June 4 vigil in Hong Kong this year showed that democracy is still strong in Hong Kong. The officials expressed opposition to the possible renewal of the U.S. Hong Kong Policy Act's requirement for a periodic report on Hong Kong, calling it "interference" in Hong Kong affairs. On economic matters, one official commented that Beijing is helping Hong Kong to deal with the global financial crisis and that the promotion of Shanghai as a regional financial center would not harm Hong Kong's status as an international financial center. In response to challenges faced by major U.S. investors in Macao, the MFA official asserted that dialogue channels are open for U.S. investors to discuss their concerns with the Central Government. End Summary. Progression toward Universal Suffrage -------------- ¶2. (C) On June 16, visiting U.S. Hong Kong Consul General Joe Donovan visited the Ministry of Foreign Affairs and met with Deng Zhonghua, Director General for Hong Kong, Macao and Taiwan Affairs and Ding Xiaowen, Acting Director General for North American and Oceanian Affairs, to discuss bilateral relations and issues related to Hong Kong and Macao. In both meetings, CG Donovan said that the United States government remains supportive of one country-two systems and wants the transition to universal suffrage to be successful. Washington is not only interested in the transition to universal suffrage for selection of the Chief Executive in 2017, but also in electoral reforms in 2012. The United States places great importance on Chief Executive Donald Tsang's statements that he will begin consultations on electoral reform later this year, no matter what the state of the global economy. The principle of universal suffrage is fundamental but the question of how candidates are nominated and selected is also critically important, CG Donovan stated. ¶3. (C) The MFA officials urged caution in the U.S. approach on universal suffrage. DG Deng agreed that "everyone is concerned" about the transition to universal suffrage in Hong Kong, but advised that such concerns be raised privately rather than publicly. Ding noted that universal suffrage in 2017 is possible because the Central Government has allowed it. He stressed, however, that since Hong Kong was a colony for so long, caution was necessary in order to avoid mistakes or setbacks. Ding said that China welcomed advice from friends, including the U.S. government, noting that we should all improve our systems. Ding stated that the Hong Kong people are more confident than they were ten years ago and cited the June 4 Tiananmen vigil as proof that democracy has remained strong. "The whole world has been watching Hong Kong," he said, so it is impossible for the Central Government to "say one thing about democracy and do another." Don't Renew Hong Kong Policy Act Report -------------- ¶4. (C) Unsolicited, both MFA officials expressed opposition to a portion of the FY 2010 Foreign Relations Authorization Act that would the renew the U.S. Hong Kong Policy Act Report requirement, which expired in 2007. Deng said that this act and the report represented "interference" in Hong Kong affairs. Sometimes it is better to "not say anything" he argued. Ding expressed particular concern over the provision in the Authorization Act that mandates that the State Department produce an BEIJING 00002021 002 OF 002 annual report on developments in Hong Kong through 2020, the earliest date that universal suffrage can be implemented for Legislative Council elections. Ding expressed hope that this portion of the bill would be deleted. Economic Assistance for Hong Kong -------------- ¶5. (C) DG Deng said that the Central Government is doing what it can to help Hong Kong deal with the global financial crisis. Steps taken to date have included helping to recapitalize Hong Kong banks, stimulating consumer demand in the Mainland for Hong Kong products, and including Hong Kong representatives in the G20 summits. In response to CG Donovan's question about the impact on Hong Kong of the Central Government's efforts to develop Shanghai as a regional financial center by 2020, Deng cited Premier Wen Jiabao's assurance that Hong Kong would retain its position as an international financial center. He argued that the promotion of Shanghai is not contradictory to the goal of helping Hong Kong maintain its prosperity and unique status as a shipping, trade, logistics and aviation center. U.S. Investments in Macao -------------- ¶6. (C) CG Donovan pointed out that U.S. investors are proud of their investments in Macao and want to be good corporate citizens. They do not just want to promote the gaming industry, but also want to help Macau succeed in its goal to become a regional and global tourism, gaming and exhibition center. U.S. companies have worked closely with the Macao SAR government on issues such law enforcement cooperation. They have had difficulty, however, in meeting with Mainland officials to discuss concerns related to their investments. Donovan suggested that Central Government officials engage in a dialogue with U.S. investors in Macau to explain their concerns and explore possible solutions. Deng asserted that channels are open for dialogue between U.S. investors and the MFA Commissioner and Central Government Liaison Office (CGLO) in Macao. CG Donovan noted that the CGLO officials in Hong Kong and Macao have been unwilling to meet with him and that his requested meeting with HKMAO officials in Beijing was turned down as "inconvenient." GOLDBERG