SERBIA AND CHINA FIND ECONOMIC AND POLITICAL

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 002536 SIPDIS E.O. 12958: DECL: 09/03/2029 TAGS: PREL PGOV EAID EINV ICG YI KV CH SUBJECT: SERBIA AND CHINA FIND ECONOMIC AND POLITICAL OPPORTUNITIES DURING PRESIDENTIAL VISIT Classified By: Political Minister Counselor Aubrey Carlson for reasons 1.4 (B/D) ¶1. (C) Summary: Affirmation of mutual support on respective Serbian and PRC sovereignty issues highlighted the political agenda of Serbian President Boris Tadic's August 19-25 visit to China, according to Serbian diplomats and Chinese government and academic contacts. Despite MFA insistence that its April 2009 submission to the ICJ did not explicitly support either Serbia or Kosovo over the question of Kosovo's independence, a Serbian diplomat reported that China had voiced support for Serbia's views on Kosovo during the visit. An MFA official confirmed that the visit had included broad economic agreements, particularly in areas of investment, trade, infrastructure and tourism, but said that the PRC had offered no promises of funding. End Summary. Formalizing an "Already Strong" Relationship -------------- ¶2. (C) Serbian Embassy Political Counselor Alexander Jankovic on August 28 provided PolOff details of the first high-level visit to China by a Serbian president since Serbia was established as an independent state in 2006. President Tadic, accompanied by Minister of Economy and Regional Development Dinkic and Foreign Minister Jerimic, met with PRC President Hu Jintao, Premier Wen Jiabao, and National People's Congress Standing Committee Chairman Wu Bangguo. In addition to Beijing, the delegation visited Shanghai and Xian and participated in investment and trade fora in Beijing and Shanghai. The end result was the signing of a "Joint Statement on Establishing a Strategic Partnership," as well as three economic documents. ¶3. (C) Jankovic highlighted several key areas in the Serbia-PRC Joint Statement, including a formal reiteration of each nation's position regarding important political issues and an agreement to strengthen dialogue at all levels through increased exchanges and cooperation. The two sides agreed to greater economic investment and trade and expanding cooperation in culture, education, sports, science and technology, and military and police fields. In addition, the Joint Statement expressed commitment to live and work within the framework of the United Nations, respect for the UN's role and principles, and the need to address the global financial crisis through international coordination. China also affirmed its support for Serbia's efforts to integrate into the European Union. Tadic invited Hu to a cultural event in Belgrade in 2010 to celebrate China and Serbia's 55th anniversary of the establishment of diplomatic relations. Mutual Support on Sovereignty Issues -------------- ¶4. (C) MFA-affiliated China Institute of International Studies (CIIS) Department of European Union Studies Deputy Director Li Weiwei on August 31 told PolOff that common positions on political issues such as sovereignty concerns made each country attractive to the other in pursuing its political objectives. President Tadic repeatedly mentioned Serbia's respect for China's sovereignty, including strong opposition to "Taiwan independence," by throughout the trip. Though Xinjiang was not mentioned in the Joint Statement, President Tadic made a point to affirm Serbia's support for China's action in suppressing the early July unrest in Xinjiang, a different position than that taken by the EU, which had called for a peaceful resolution while stressing the need for freedom of expression and the right to peaceful assembly. ¶5. (C) On the issue of Kosovo's independence, China reaffirmed its respect for Serbia's sovereignty and territorial integrity, according to Serbian Political Counselor Jankovic. China expressed hope for a diplomatic resolution between Kosovo and Serbia in accordance with the principles of the United Nations and international law. Jankovic noted that China had in April submitted an advisory opinion to the International Court of Justice in The Hague on the legality of Kosovo's declaration of independence and said that PRC officials reiterated their support for Serbia's position during the visit. However, MFA Treaty and Law Department Public and International Law Division Deputy Director Hu Bin told PolOff September 2 that the PRC brief itself did not support either Serbia or Kosovo. (Note: A BEIJING 00002536 002 OF 002 review of China's April 2009 ICJ submission provided by the MFA reveals that while the submission does not specifically mention either Serbia or Kosovo, it supports territorial sovereignty and notes that secession from a sovereign state is not recognized by international law unless under colonial domination or foreign occupation.) Three Economic Documents Signed -------------- ¶6. (C) Serbian diplomat Jankovic noted that three economic agreements had been signed during the visit. The first was an Agreement on Economic and Technical Cooperation that encouraged Chinese participation in building and financing a bridge over the Danube, a port on the Danube (which would will allow for more direct imports from China, as presently over half of the imports from China to Serbia are routed through third countries),and a free economic zone for Chinese companies. Tadic invited Chinese companies to invest in Serbia, emphasizing the benefits as compared to the EU in such areas as tax allowances, low-cost and available labor, and other incentives. The two sides also initiated agreements to facilitate Chinese tour visits to Serbia and promising Chinese financial assistance to Serbia in the amount of 10M RMB ($1.5M) for an as-yet undetermined purpose. Economic Projects Mooted with No Funding -------------- ¶7. (C) In a meeting August 31 with PolOff, MFA European Affairs Department Deputy Division Chief Tian Yishu highlighted PRC and Serbian intentions to expand bilateral trade, investment, infrastructure and high-priority enterprises in such fields as communication, petrochemical industry, energy, high and new technology, industrial production, and food processing. Though he also noted projects mentioned in the Joint Statement, such as bridge construction and tourism initiatives to increase Chinese tourist flow to Serbia, Tian insisted that no specific plans were yet in place, nor had China provided funding to Serbia for any specific projects. China Extends Its Reach into Europe through Serbia -------------- -------------- ¶8. (C) CIIS scholar Li Weiwei suggested that in economic terms, Serbia found in China an excellent partner for pursuing economic growth initiatives in infrastructure, tourism and trade. Conversely, China saw opportunity in Serbia. Not only did it see Serbia as outspoken in its political support for China on controversial issues within the European Union, but by continuing to extend its reach into Europe through Serbia, China's economic and political influence would be strengthened, Li asserted. HUNTSMAN