ZARDARI VISIT HIGHLIGHTS CLOSE CHINA-PAKISTAN TIES

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000519

SIPDIS

E.O. 12958: DECL: 02/27/2034
TAGS: PREL PGOV CH PK AF IN
SUBJECT: ZARDARI VISIT HIGHLIGHTS CLOSE CHINA-PAKISTAN TIES

Classified By: Political Minister-Counselor Aubrey Carlson,
reasons 1.4 (b/d).

Summary
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1. (C) Pakistani President Asif Zardari's February 20-24
visit to Hubei Province and Shanghai was aimed at expanding
bilateral economic cooperation and promoting investment,
especially in the financial, agricultural, hydroelectric, and
water conservation sectors. The two sides inked a
Pakistan-China Free Trade Agreement in services. Zardari's
highest-level meeting was with State Councilor Dai Bingguo,
during which the two sides discussed bilateral and regional
issues, as well as counterterrorism. China's policy toward
Pakistan is "unswerving," Zardari was told, and China is
willing to work with Pakistan to "push strategic cooperation
to a new high." Regarding counterterrorism, a senior
Pakistani diplomat said the Chinese told President Zardari,
"we are in this with you" and China is willing to share
intelligence and help with military aid and other resources.
End Summary.

Background
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2. (SBU) Pakistani President Asif Zardari visited China
February 20-24 at the invitation of the Chinese government,
according to the MFA and the Pakistan Embassy. Zardari's
visit, his second to China since taking office in late 2008,
included stops in Wuhan in central China, the Three Gorges
region between Wuhan and Chongqing, and Shanghai. Zardari
met State Councilor Dai Bingguo in Wuhan and met with
provincial and municipal officials at each stop.

Main Focus: Economic Cooperation
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3. (SBU) Zardari's visit was aimed at expanding bilateral
economic cooperation and promoting investment, especially in
the financial, agricultural, hydroelectric, and water
conservation sectors, Pakistani Embassy Counselor Shafqat Ali
Khan told POLOFF on February 21. The two sides inked a
Pakistan-China Free Trade Agreement in services, "completing"
the bilateral Free Trade Agreement, our contact said. MFA
Asian Affairs Department South Asia Division Deputy Director
Cao Jing February 27 told us that Zardari held talks with
officials from the agricultural and water conservation
sectors and signed memoranda of understanding on agriculture,
water conservation and local government cooperation.
Pakistani diplomat Khan said that Pakistan hoped to attract
Chinese investment in the Pakistani banking sector and
jumpstart the dormant China-Pakistan Joint Investment Company.

Bilateral Issues
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4. (C) President Zardari's highest-level meeting was a dinner
February 21 in Wuhan hosted by State Councilor Dai Bingguo.
According to MFA's Cao, the sides discussed bilateral and
regional issues, as well as counterterrorism. Zardari
expressed support for the Sino-Pakistani traditional
friendship and urged expanded cooperation. The Pakistani
side reportedly expressed gratitude for China's support and
assistance. The Chinese side told Zardari that Pakistan was
a good "neighbor, friend, partner, and brother." China seeks
to expand cooperation with Pakistan in politics, economics,
security, and culture. China's policy toward Pakistan is
"unswerving," and China is willing to work with Pakistan to
"push strategic cooperation to a new high," the Chinese told
Zardari.

Pakistani-Indian Ties, Counterterrorism
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5. (C) President Zardari's meeting with State Councilor Dai
touched on the Pakistani-Indian relationship and
counterterrorism, said our contacts. The Pakistani side
briefed PRC officials on their desire to have positive and
active ties with India, Cao said. The Deputy Director said
the Chinese expressed their view that peace and stability in
the region were of "vital importance," and the PRC supported
Pakistani-Indian efforts. The meeting did not include a
discussion on the Mumbai bombing, but China encouraged
continued cooperation on counterterrorism. Cao noted that
she personally did not think the Pakistani-Indian
relationship was as tense as it had been in past months, and
suggested both sides should get back on a "normal track."
Calling terrorism a challenge for "all mankind," Cao said
China had noted its appreciation for Pakistan's efforts,

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while Pakistan said it would not allow its territory to be
used against another country. Pakistani diplomat Khan said
the Chinese had told President Zardari, "we are in this with
you" and that China is willing to share intelligence and
provide military aid and other resources. Khan stated there
was no discussion of the recent ceasefire agreement in Swat.

Reaction
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6. (C) Both Pakistani and MFA contacts said the visit was
"successful." Deputy Director Cao stated that Zardari's trip
"enhanced mutual understanding and expanded consensus" and
that it was "conducive" to the Sino-Pakistani "all-weather
friendship." She noted that President Hu Jintao had called
Zardari when he reached Shanghai to "congratulate him on a
successful visit." Pakistani diplomat Khan said that beyond
the services agreement, Pakistan did not seek specific
take-aways from the Chinese side, but the Embassy viewed the
visit as a success because it exposed President Zardari to
different parts of China, which Pakistan views as a model for
development. Offering a different perspective, Ye Hailin,
scholar at the MFA-affiliated Chinese Academy of Social
Sciences (CASS),said February 25 that Zardari's visit was
mainly motivated by the March parliamentary elections in
Pakistan. Nawaz Sharif and Pakistani Senate opponents were
"powerful," said Ye. Zardari was not in a very "stable"
position, and he "needs a diplomatic success."
PICCUTA