AMBASSADOR'S INTRODUCTORY CALL ON FM YANG JIECHI:

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 002526

SIPDIS

E.O. 12958: DECL: 09/02/2029
TAGS: PREL PGOV ECON ETRD EFIN MARR SENV CH KN IR
AF, PK
SUBJECT: AMBASSADOR'S INTRODUCTORY CALL ON FM YANG JIECHI:
421 TIRES, AF/PAK, IRAN, DPRK, MIL-MIL, CLIMATE

Classified By: Political Minister Counselor Aubrey Carlson.
Reasons 1.4 (b),(d).


1. (C) Summary: In his first meeting with Foreign Minister
Yang Jiechi, the Ambassador expressed his and President
Obama's hope to keep the U.S.-China relationship moving in a
positive direction and focused on major issues of mutual
concern. FM Yang noted the positive tone set by Presidents
Hu and Obama in their April 2 meeting in London as well as by
the July 27-28 Strategic and Economic Dialogue, and agreed on
the need to focus on common concerns. Yang urged the U.S.
side to be "highly sensitive" to China's "core interests."
He suggested that the U.S. and China handle bilateral
differences discreetly to avoid a public perception that
there was friction between the two countries. The Ambassador
stressed the importance of reaching a creative and flexible
negotiated solution to the Section 421 safeguards process on
PRC tire exports as quickly as possible. FM Yang warned that
the issue could have serious repercussions and urged the
United States to not go forward with application of Section
421 safeguards, arguing that the issue was politically
sensitive in China given public interest in the case. The
Ambassador urged Chinese cooperation on Afghanistan/Pakistan,
Iran and North Korea; Yang responded that China was doing its
best with Afghanistan and welcomed U.S.-China coordination on
such issues. The Ambassador also urged increased
military-to-military exchanges. End summary.


2. (C) The Ambassador met with Foreign Minister Yang Jiechi
September 2 for an introductory meeting and to discuss
bilateral issues. EconMinCouns, PolMinCouns, acting Defense
Attache, interpreter, POLOFF and ConOff (notetakers) also
attended.

Implementing the Presidents' Vision
--------------


3. (C) The Ambassador told FM Yang of his desire -- indeed,
the President's instructions to him -- to keep U.S.-China
relations moving in a positive direction and focused on the
major issues of mutual concern. He expressed President
Obama's interest in U.S.-China relations and highlighted the
importance of ensuring that the mechanics of the relationship
were well-tuned to operate in full support of the broader
goals laid out by the leadership. U.S. and PRC interests
were aligned on many aspects of the key issues of global
economic recovery, regional security and climate change.


4. (C) Foreign Minister Yang responded that President Obama
and President Hu Jintao had laid the groundwork for the
development of U.S.-China relations at their meeting in
London earlier this year by agreeing on the goal of building
a "positive, cooperative and comprehensive relationship for
the 21st century." The subsequent Strategic and Economic
Dialogue in July had also been successful. He noted that
China was preparing for the summit meetings to take place in
New York and Pittsburgh in September and that President Hu
Jintao would attend the September UNSC Nuclear
Nonproliferation and Disarmament Summit hosted by President
Obama. FM Yang urged both sides to increase coordination and
dialogue to deal with common challenges such as climate
change, energy, the global financial crisis, regional issues
and non-traditional security threats, such as terrorism and
trans-border crime, and stressed the importance of frank and
sincere discussion of issues on which the two sides
disagreed. FM Yang stressed the importance of upcoming
highest-level meetings in New York, Pittsburgh and Beijing,
dialogue mechanisms, frequent contact at various levels of
the two governments, and increasing social and educational
links to ensure a solid foundation for future development of
relations.

Call for Mutual Respect of Core Interests
--------------


5. (C) FM Yang urged the United States to be "highly
sensitive" to China's "core interests," noting that China
sought to understand and be sensitive to U.S. core interests.
He described China's core interests as: 1) maintaining the
"basic social system" and national security of China, 2)
safeguarding the territorial integrity of China, especially
as it relates to Taiwan, Tibet and Xinjiang, including the
"so-called East Turkestan" issue, and 3) ensuring domestic
social and economic stability. FM Yang pushed for mutual
sensitivity to such core interests through adherence to
"international law and codes of conduct" as well as
respecting the mutual understanding reached in the three
Joint Communiques, and said that respect for China's core

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interests was important for broader U.S.-China relations. FM
Yang offered the Ministry's full support to facilitate the
Ambassador's work in China and expressed hope the Ambassador
would call on his extensive contacts to improve the substance
of sister-state and sister-city relationships.

Tire Exports and Section 421 Safeguards
--------------


6. (C) The Ambassador stressed the importance of reaching a
negotiated solution to the ongoing Section 421 safeguards
process on tire exports. He noted that a Chinese negotiating
team was in Washington discussing the issue and urged FM Yang
to stress to the Chinese team the importance of being
flexible and reaching a creative solution as quickly as
possible. He recalled that several issues had challenged the
U.S. and China to reach solutions during China's accession to
the WTO, and the two sides had been able to work together to
overcome those challenges.


7. (C) FM Yang responded that the two sides were working at
various levels to seek a solution given the "possible serious
repercussions" of the issue, and urged the U.S. to not go
forward with the application of the Section 421 safeguards
process. He said that U.S.-China cooperation during the
global financial crisis demonstrated the will on both sides
to work together to overcome the economic downturn, reform
international financial institutions, guard against
protectionism and realize the Millennium Development Goals.
He argued that the 421 issue could undermine this
cooperation. Yang added that the public perception of the
issue was very important and that the two sides needed to be
careful in handling the issue, adding that the Chinese public
had become "very vocal" on the matter.

Shared Challenges Need to Be Handled Carefully
-------------- -


8. (C) The Ambassador highlighted specific building blocks
for U.S.-China cooperation ahead of President Obama's visit
to China in November. In addition to the swift resolution of
the tire exports case, the Ambassador pushed for U.S.-China
coordination on the stabilization of Afghanistan and urged
China to remind Pakistan that it should refuse to provide
sanctuary for extremists. He called for cooperation on
efforts within the P5-plus-1 to deal with the Iranian nuclear
program. The Ambassador also highlighted upcoming visits by
Ambassadors Bosworth and Holbrooke as opportunities to
coordinate policies on North Korea and Afghanistan/Pakistan.
The Ambassador called for increased exchanges between our two
militaries.


9. (C) FM Yang agreed that the U.S. and China shared many
common interests, including in peace, stability and
prosperity in the Asia-Pacific as well as in solutions to
regional hotspot issues such as North Korea and Afghanistan.
China wished for the U.S. to continue to play an important
role in the region. He welcomed visits by Ambassadors
Bosworth and Holbrooke. He stressed that the U.S. and China
should stay focused on the common goals related to these
challenges, try to narrow and resolve any differences, and be
careful to avoid "putting our differences in a conspicuous
position." On support for Afghanistan, Yang said that China
was "doing its best" and would continue to coordinate with
the U.S. on the issue. FM Yang argued that while differences
between the two sides on climate change existed, so did
common ground.
HUNTSMAN