Cablegate: U/S Hormats Meets Vice Foreign Minister

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UNCLAS SECTION 01 OF 03 BEIJING 003090

SENSITIVE
SIPDIS

STATE PASS USTR

E.O. 12958: N/A
TAGS: SENV OVIP ETRD ECON PREL APEC CH
SUBJECT: U/S HORMATS MEETS VICE FOREIGN MINISTER
WANG GUANGYA

(U) This cable is Sensitive but Unclassified (SBU)
and for official use only. Not for transmission
outside USG channels.

1. (SBU) SUMMARY. Executive Vice Foreign Minister
Wang Guangya told Under Secretary Hormats during
their November 9 meeting that the United States and
China could make climate change a "highlight" of the
bilateral relationship, beginning with the
President's visit to Beijing early next week. He
said China never has and never will have the
intention to exclude the United States from any
Asia-Pacific grouping. Wang and Hormats also
discussed bilateral and multilateral trade issues,
S&ED II preparation and G20 commitments. END
SUMMARY

CLIMATE CHANGE: HIGHLIGHT OF BILATERAL RELATIONSHIP?

2. (SBU) U/S Hormats began with an explanation of
the importance the President placed on the issue of
climate change. China's efforts to reduce emissions
and dependence on oil imports would benefit the
world, and real progress on technical cooperation
between the United States and China was possible.
Wang responded that because both the United States
and China are major energy producers and consumers,
they both must take seriously efforts to increase
energy efficiency and reduce use. He noted
increased cooperation would serve both countries,
particularly with Copenhagen looming, and that good
communication and joint efforts on energy technology
could become a highlight of the U.S.-China
relationship.

3. (SBU) U/S Hormats emphasized the need to
internationalize these commitments and make
countries accountable for their Copenhagen
commitments. Monitoring would help ensure greater
transparency and encourage individual countries to
adhere to their agreed-upon actions. He recognized
the need for credibility on the part of the United
States, China, and other major players to ensure
that all nations abide by their commitments.

4. (SBU) U/S Hormats stated that China should take a
more proactive role in energy transparency. He
mentioned reports that China had ceased reporting
crude oil and refined products monthly inventory
data, which is counterproductive to efficiency and
China's own interests. He urged Wang to resume
publishing that information and to begin work on
reducing energy subsidies, which could in turn
reduce hydrocarbon emissions. Wang noted that he
would pass on the message.

POTUS VISIT LOOMING

5. (SBU) Wang said China attached great importance
to the President's first visit to China, and
outlined three priorities going into the last week
before the visit:

--The joint statement should send a positive message
to the world that the United States and China are
working together to meet global challenges.

-- Outstanding issues to be negotiated included
China's core concerns. China understood and
sympathized with Washington's concern about
terrorism and weapons proliferation. China's
sovereignty and territorial integrity concerns
(Xinjiang, Taiwan, Tibet) affect the feelings of the
Chinese population. He hoped the United States
would understand and respect these concerns.

--Visit details including protocol, security, and
media coverage still needed to be resolved.

REGIONAL ARCHITECTURE: UNITED STATES WILL BE
INCLUDED

7. (SBU) On regional architecture and U.S.
involvement in the region, Wang said he believed the
Asia-Pacific region could not develop without the
United States, and that China never has and never
will have the intention to exclude the United States

BEIJING 00003090 002 OF 003

from any Asia-Pacific forum. He noted that China
attaches great importance to APEC, and that APEC
still has a major role to play in trade
liberalization despite the many changes in the
global economic situation since its founding. He
said that although China, Japan, and South Korea are
tightening relations with ASEAN, China considers the
United States to be a country with worldwide
political, military, and economic influence.

TRADE REMEDIES ARE PROTECTIONIST

8. (SBU) Wang urged the State Department to firmly
oppose "protectionist" measures. The United States
must cooperate closely with China to exit from the
financial crisis. The two countries needed to send
strong positive signals to boost international
confidence despite slowing bilateral trade.
Although the United States has taken limited
measures, Beijing believes these have been
discriminatory, and tell the world that it is
becoming more protectionist during the financial
crisis. Chinese companies have been damaged in the
process, and Beijing is feeling increased pressure
to retaliate, despite reluctance to do so.

9. (SBU) U/S Hormats noted that U.S.-China
cooperation on our respective stimulus plans has
benefited the global economy, and said the United
States is committed to continuing the stimulus as
long as is necessary. He reassured Wang that the
White House is committed to cutting the budget
deficit when the economy has begun to recover but
was not going to rush to remove the fiscal stimulus.
He pointed out that the United States is still the
most open major economy in the world, and that it is
still very open to foreign trade and Chinese
investment despite recent measures. He urged China
to work collaboratively with the United States and
other economies through the WTO and the Doha Round
of WTO negotiations. Our two countries would always
have some trade issues, and limited issues between
the United States and China should not be viewed as
unusual. Wang replied that although some
disagreements were inevitable, they should be solved
via negotiations rather than punitive actions, which
would only serve to escalate friction. U/S Hormats
also agreed that we would prefer negotiation, but
would exercise our rights if needed.

10. (SBU) Wang said that if the United States
reduced restrictions on high-tech trade, economic
relations with China could move toward a more
balanced relationship. U/S Hormats replied that
there may be areas where we could loosen
restrictions because the products in question were
readily available, and it might be worthwhile to
review these opportunities, but there may be other
areas where we should tighten up. He urged Chinese
cooperation within APEC to reduce barriers on green
technology.

S&ED AND G20

11. (SBU) U/S Hormats urged Wang to consider a
plenary session at the S&ED II meetings in mid-2010,
noting that former Secretary of State Kissinger and
Zhou Enlai used similar methods 30 years ago to
ensure all negotiating points were put in the
appropriate context of the overarching bilateral
relationship. The United States wants to work
collaboratively with China within the G20 framework
to ensure the group's success. He proposed that the
United States and China incorporate regional
economic topics of mutual concern into the S&ED's
regional sub-dialogues.

12. (SBU) Wang did not respond to the S&ED II
plenary suggestion. He said that China takes very
seriously its leading role in the G20 and that China
and the United States should increase cooperation
given G20's importance in international economic
affairs. He also acknowledged the U.S. request to
add an economic component to the regional sub-
dialogue framework. He told U/S Hormats that the
MFA would be happy to brief their U.S. counterparts
on Premier Wen's recent Africa trip, noting they

BEIJING 00003090 003 OF 003

"had nothing to hide."

13. (U) U/S Hormats cleared this message.

HUNTSMAN

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