C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000168

SIPDIS

E.O. 12958: DECL: 01/22/2035
TAGS: PREL ECIN ASEAN APECO ARF IN XC XE XU
SUBJECT: PRC: POSITIVE RESPONSE TO SECRETARY'S SPEECH ON
ASIA-PACIFIC MULTILATERALISM

REF: A. STATE 2965

B. STATE 4128

C. BEIJING 122

Classified By: Political Minister Counselor Aubrey Carlson for reasons
1.4 (B/D).


1. (C) SUMMARY: MFA officials responded positively to the
Secretary's January 12 speech in Honolulu on Asia-Pacific
multilateralism, claiming that the PRC and the U.S. shared
nearly identical principles for the development of regional
institutions in the Asia-Pacific. MFA officials welcomed
further U.S. engagement in the Asia-Pacific and expressed
interest in continued bilateral dialogue on the development
of regional architecture. A PRC scholar argued that PRC
self-interest dictated support for a strong U.S. presence in
the region. Our contacts voiced little enthusiasm, however,
for new regional architecture proposals such as Australia's
Asia-Pacific Community and Japan's East Asia Community. MFA
officials provided varying appraisals of the institutional
effectiveness of APEC, with one suggesting the organization
needed to be strengthened, while another touted it as the
"number one" forum for promoting region-wide economic
integration and trade. END SUMMARY.

PRC Response to Secretary's Speech
--------------


2. (C) Senior PRC officials had reviewed the Secretary's
speech on regional architecture in the Asia-Pacific region
and found it "good, balanced, deeply considered" and
containing "nothing unacceptable," MFA Director General for
Policy Planning Le Yucheng told the DCM January 19. The
Secretary's expressed concerns, the justifications and
reasons for the policy she set forth, and the principles for
U.S. engagement in Asia were all "in line with the reality of
the Asian situation," according to DG Le.

PRC Welcomes U.S. Role in East Asia
--------------


3. (C) China's strategic imperative in East Asia was a stable
environment conducive to economic integration, and the PRC
recognized

that U.S. involvement in East Asia underpinned
stability, according to MFA International Organizations
Department ASEM/APEC Division Director Huang Yiyang. Huang
explained to EmbOffs January 18 that the PRC did not wish to
challenge the United States in the region, but rather wished
to work alongside the United States to develop inclusive,
flexible, results-oriented regional institutions that had the
capacity to solve problems. The PRC acknowledged U.S.
strategic economic leadership in the region and agreed that
regional institutions should promote stability and provide
shared prosperity through economic integration. There was
"very little daylight" between the PRC and the U.S. on
principles for development of regional architecture,
according to Huang. DG Le separately reiterated the PRC
position that China had no intent or capacity to push the
United States out of Asia. "The United States has a
traditional role in Asia," DG Le said, "and we respect that."

Regional Integration Requires U.S. Involvement
-------------- -


4. (C) Regional stability anchored in East Asian economic
integration provided the basis for China to develop its
domestic economy and therefore was of paramount strategic
interest to China, China Foreign Affairs University (CFAU)
professor and media commentator Su Hao told EmbOffs January

20. Responding to the Secretary's remarks on U.S. leadership
in the Asia-Pacific, Su contended that China had to
acknowledge that the U.S. -- with its presence in Hawaii and
the Western Pacific -- was "a resident, not a visiting power"
in the region. Geography, economics and regional stability
dictated against efforts to exclude the United States.
Rather, the region required architecture to accommodate a
continued U.S. role, according to Su.


5. (C) Su asserted that PRC self-interest compelled it to
urge the U.S. to increase its involvement in the region,
because Southeast Asian states would be reluctant to move
forward on regional integration out of concern over PRC or
Japanese domination in the absence of the United States. Su
suggested that U.S. membership in the East Asia Summit would
allay Southeast Asian concerns about power asymmetry, foster

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greater regional integration, and accommodate a continued
U.S. role in the region. Commenting that that "East Asia is
not the EU," Su predicted that progress on regional
integration would be slow and incremental.

Differing Views on APEC
--------------


6. (C) MFA interlocutors provided differing assessments of
APEC. DG Le criticized APEC as "not so effective." While
conceding that APEC had played "some role" in solving
economic problems, he said the organization should be
strengthened or reorganized.


7. (C) MFA International Organizations Department ASEM/APEC
Division Director Huang separately stated that at present,
the PRC identified APEC as the "number one" forum for
promoting region-wide economic integration and trade, because
it was the only economic mechanism that involved China, Japan
and the United States. Huang said APEC had a record of
reducing trade barriers and advancing broad-based prosperity,
and suggested that the U.S. and the PRC should work closely
together to strengthen APEC's capacity to address
non-security regional challenges, further promote prosperity
and reduce trade barriers. APEC should avoid, however,
handling political-security issues such as nuclear
nonproliferation in order to retain focus and effectiveness,
according to Huang.

PRC Ambivalence about New Proposals
--------------


8. (C) The PRC supported any regional mechanism that was
results-driven and able to solve problems, according to MFA's
Huang, who cautioned that it would be unrealistic to expect
any single institution to have the capacity to address every
problem in the region. DG Le separately stated that China's
concern was that the structure of such organizations should
be "effective" and consider the interests of all players,
including the United States.


9. (C) Regarding new regional architecture concepts, MFA's
Huang explained that the PRC was open to but not positive
about Australian Prime Minister Rudd's proposal for an
Asia-Pacific Community (APC), which struck many in the region
as both poorly defined and overly ambitious. Huang observed
that the majority of ASEAN member states were reluctant to
move forward with the APC, and even Australian diplomats were
not enthusiastic about the proposal. Huang noted that
Japan's East Asia Community (EAC) proposal also required
further definition. Overall, the PRC sought further
cooperation with the U.S. and other partners such as Japan to
promote regional integration through existing institutions,
while maintaining openness to new ideas. Huang added that
China was paying close attention to U.S. progress on the
Trans-Pacific Partnership. DG Le separately stated that
China would like to see ASEAN plus Japan, the Republic of
Korea and the PRC (ASEAN plus three) enlarged to include more
countries and more issues.

PRC Impatience with Indonesia on Regional Architecture
-------------- --------------


10. (C) Ministry of State Security-affiliated China
Institutes of Contemporary International Relations (CICIR)
Indonesia scholar Luo Yongkun told PolOff January 19 that the
PRC was growing impatient with Indonesia's self-perceived
role as leader of ASEAN on regional architecture issues.
Indonesia "supported every proposal and objected to none,"
according to Luo, who recounted that Indonesian President
Yudhoyono had at various times supported the Australian APC
concept, the Japanese EAC proposal, and had also told Premier
Wen Jiabao privately that ASEAN plus three was the best
vehicle for regional integration.
HUNTSMAN