Identifier
Created
Classification
Origin
10BEIJING260
2010-02-01 11:30:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

PRC INITIAL RESPONSE TO TAIWAN ARMS SALE

Tags:  PREL PGOV MASS PARM CH TW 
pdf how-to read a cable
VZCZCXRO3464
OO RUEHCN RUEHGH
DE RUEHBJ #0260/01 0321130
ZNY CCCCC ZZH
O 011130Z FEB 10 ZDK
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7860
INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEKJCS/JOINT STAFF WASHINGTON DC IMMEDIATE
RHMFISS/CDR USPACOM HONOLULU HI IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000260 

SIPDIS

E.O. 12958: DECL: 02/01/2035
TAGS: PREL PGOV MASS PARM CH TW
SUBJECT: PRC INITIAL RESPONSE TO TAIWAN ARMS SALE

REF: BEIJING 248

Classified By: Deputy Political Minister Counselor Ben Moeling.
Reasons 1.4 (b),(d).

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000260

SIPDIS

E.O. 12958: DECL: 02/01/2035
TAGS: PREL PGOV MASS PARM CH TW
SUBJECT: PRC INITIAL RESPONSE TO TAIWAN ARMS SALE

REF: BEIJING 248

Classified By: Deputy Political Minister Counselor Ben Moeling.
Reasons 1.4 (b),(d).


1. (C) Summary: Two days after the announcement of new arms
sales to Taiwan, China's negative reaction to the
announcement dominated all discussions of U.S.-China
relations. Observers predict a continued series of responses
across various sectors that could be exacerbated if President
Obama meets with the Dalai Lama. Embassy officers were told
that the PRC reaction could also affect cooperation on
multilateral and regional issues, but would be unlikely to
have an impact on cross-Strait relations. PRC official media
reaction was uniformly negative, but bloggers so far
refrained from commenting on the arms sales. Proposals to
sanction U.S. companies participating in the sales, the one
aspect of the Chinese reaction that is qualitatively
different from China's response to the October, 2008 arms
sale announcement, were popular among commentators, but the
Chinese government has not released details on the nature or
scope of these measures. End summary.

Government Reaction
--------------


2. (C) In addition to the measures described in the official
PRC government response to the announcement of new arms sales
to Taiwan (reftel),on January 31 and February 1 various
Chinese government organizations canceled or postponed a
number of planned bilateral events. These included: the
cancellation of the Ambassador's meeting with Communist Youth
League First Secretary Lu Hao and indefinite postponement of
the Ambassador's proposed meeting with United Front Works
Department Minister Du Qinglin, the cancellations of the
visit to Washington of Vice Minister of Public Security Liu
Jing and bilateral Fissile Material Cutoff Treaty
consultations, which were to be held in Beijing. These
actions were not explicitly linked to the arms sale
announcement, but the timing and sudden nature of the
cancellations left little doubt about the reasoning.

Expert Opinions
--------------


3. (C) On February 1, Zhe Sun, Director of Tsinghua

University's Center for China-U.S. Relations, told PolOff
that the announcement of the arms sales was not a surprise,
but "people are very mad." Zhe said that while angry
nationalist comments on Internet chatrooms can be expected,
he had also seen strong reactions from mainstream
intellectuals. Zhe said that "there is consensus that China
should take action to defend our national pride," adding that
"we must be tough this time." He claimed that China had
"reason to be mad" and cited Secretary Clinton's recent
meeting in London with Foreign Minister Yang Jiechi, in which
there was no mention of the imminent announcement of arms
sales. Zhe said he expected the Chinese government would be
currently studying additional retaliatory measures. "Whether
they are implemented may depend on reaction to President
Obama's meeting with the Dalai Lama," Zhe opined.


4. (C) Tao Wenzhao, Senior Fellow at the China Academy of
Social Sciences (CASS),told PolOff that the arms sale had
been a surprise to many Chinese citizens since "last year's
relations were so good, it had raised expectations for this
year." During the celebrations of the 30th anniversary of
the establishment of relations between Beijing and Washington
in early 2009 people were discussing "a G2," Tao noted, and
lamented that "now it is clear that the basic structure of
our relations has not changed." Tao suggested that the PRC
would not issue some across-the-board retaliation against the
U.S. but it would consider actions on a case-by-case basis.
Looking to cross-Strait relations, Tao hypothesized the
Mainland would "remind" Taiwan of the issue in their
engagements, but that it would not seriously impact
relations.


5. (C) Dr. Zhang Wensheng, Director of Xiamen University's
Taiwan Research Institute (TRI) Political Institute, told
ConGen Guangzhou Officer that Beijing's reaction has been
"normal." Zhang also speculated that the situation could
deteriorate further if Washington were to sell more advanced
weapons such as the F-16 C/D or submarines, or if President
Obama were to meet with the Dalai Lama in the near future.
Nonetheless, Zhang predicted the arms sales would have only a
short-term effect on the bilateral relationship; over the
long-term Beijing still needs to maintain good relations with
the United States.

BEIJING 00000260 002 OF 002



Sanctions against U.S. Companies
--------------


6. (C) The Chinese government has not released a clear
explanation of the mention of sanctions against U.S.
companies involved in the arms sales that was included in an
MFA press statement on January 30. The Taiwan Affairs Office
(TAO) referred Embassy officers to the Ministry of Foreign
Affairs (MFA) for comment; the MFA suggested we contact the
Ministry of Commerce (MOFCOM); MOFCOM in turn said the TAO
and MFA were handling the matter.


7. (C) Professor Tao of CASS described the proposed sanctions
as an experiment, and said it was the first time he could
recall that China had sanctioned foreign companies. He was
unaware of any details about the nature of the sanctions.
Professor Zhang of TRI separately called the sanctions
"appropriate."


8. (C) Beijing representatives of Boeing, parent company of
Boeing Defense Systems, which produces the Harpoon Block 2
system, told EconOffs that, as of February 1, they had not
heard anything from the Chinese government regarding the
implementation of sanctions. Boeing representatives noted
that in 2009 the company sold 50 aircraft to China, each
valued at USD 70-100 million, for a total revenue figure of
USD 3.5-5 billion. Boeing expected its 2010 China sales
figures to equal those last year if sanctions were not
imposed. Total U.S. aircraft sales to China in 2009 were
approximately USD 6 billion. (Note: in October, 2008,
Boeing's Beijing representative was called in to the MFA for
a formal demarche by the Director General of North American
and Oceanian Affairs and warned that if Boeing went through
with its portion of that sale, "there will be consequences."
Specific consequences did not materialize.)

Media Reaction
--------------


9. (SBU) Mainland papers January 30-February 1 carried news
stories and editorials criticizing the arms sale
announcement. Official party mouthpiece People's Daily (circ
2.3 million) called the sales "a pathetic and short sighted
strategy" indicative of a "Cold War mentality," adding that
"the U.S. government is ignoring the overall situation of
U.S. - China relations and giving in to military and
industrial enterprises." Official Guangming Daily (circ. 1
million) and Xinhua Daily Telegraph both said the U.S.
decision "has once again hurt the Chinese people's feelings
and will significantly damage U.S - China relations. The
United States should be responsible for any serious
consequences this may generate."


10. (SBU) Media reports focused on consequences for
U.S.-China relations as well as the need for retaliation.
Several papers also highlighted the introduction of sanctions
against U.S. firms supplying military hardware. Nationalist
tabloid Global Times (circ 1.5 million) opined "when
companies want to make profits by selling arms or harming
China's interests, their bad behavior will not be rewarded."
In a separate article, Global Times warned "China will soon
have many more countermeasures in the future to combat United
States (arms sales)." The business-oriented China Business
News (circ 600,000) quoted a MFA official saying "Sino-U.S.
cooperation on key international and regional issues will
inevitably be affected."


11. (SBU) China Daily (circ 200,000) claimed "Washington's
arrogance also reflects the stark reality of how a nation's
interests could be trampled on by another... China's
response, no matter how vehement, is justified... A message
has to be sent loud and clear: If the U.S. shows no respect
to China's core interests, it cannot expect cooperation from
China on a wide range of major regional and international
issues." However, despite this rhetoric, Global Times still
believed "that the generally steady development of diplomatic
relations between the two countries won't change."
HUNTSMAN