PRC: POSITIVE RESPONSE TO SECRETARY'S SPEECH ON

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 BEIJING 00000168 002 OF 002 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