VZCZCXRO9338
OO RUEHCN
DE RUEHBJ #5355/01 0821419
ZNY CCCCC ZZH
O 231419Z MAR 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0922
INFO RUEHKT/AMEMBASSY KATHMANDU PRIORITY 3716
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 4030
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHOO/CHINA POSTS COLLECTIVE
RHHMUNA/HQ USPACOM HONOLULU HI
RHHJJAA/JICPAC HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 005355 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/23/2031 
TAGS: PREL PGOV NP CE CH
SUBJECT: PRC/NEPAL: AFTER TANG'S VISIT, PRC READY TO WORK 
WITH U.S. TO ENCOURAGE RECONCILIATION IN NEPAL 
 
REF: KATHMANDU 000768 
 
Classified By: Deputy Political Chief Robert Griffiths. 
Reasons 1.4 (b/d) 
 
 Summary 
------- 
 
¶1. (C) China is interested in taking a more active role in 
working with the United States to encourage reconciliation 
talks between the King and Nepal's political parties, 
according to MFA Asia Department Deputy Director General 
Luo Zhaohui.  In a March 21 meeting with visiting U.S. 
Ambassador to Nepal James Moriarty, Luo suggested that the 
PRC and U.S. Ambassadors in Kathmandu take the lead in 
hosting talks between the three major political parties and 
the government.  Stressing that India would need to be 
included in any such process, the Ambassador expressed 
interest and noted that a coordinated approach by the U.S., 
Indian and PRC Ambassadors would send a very powerful 
signal.  Luo discussed State Councilor Tang Jiaxuan's March 
16-18 visit to Nepal, calling attention to Tang's meetings 
with the leaders of the three main opposition parties as 
being a first.  The Ambassador's assessment of India's 
influence in Nepal "surprised" Luo, who maintained that 
China is closer to the U.S position on Nepal than to 
India's and expressed concern about New Delhi's links to 
the Maoist rebels.  Luo informed Ambassador Moriarty that 
Nepal has requested an invitation for the King to visit 
China in May; Ambassador Moriarty warned that, under the 
current circumstances, the Nepali government would try to 
spin such an invitation into Chinese support for the King's 
policies. End Summary. 
 
PRC Policy of Noninterference. . . 
---------------------------------- 
 
¶2. (C) In a March 21 meeting, MFA Asia Department Deputy 
Director General Luo Zhaohui briefed Ambassador Moriarty on 
State Councilor Tang Jiaxuan's March 16-18 trip to Nepal. 
Luo took care to state the discussions covered bilateral 
relations and Nepal's domestic situation.  In terms of 
bilateral relations, Tang stressed the importance to China 
of Tibet and Taiwan.  Tang then reaffirmed China's Nepal 
policy of supporting an independent and stable Nepal, while 
pledging not to interfere in Nepal's internal affairs.  At 
the same time, Tang also stressed the importance of the 
international community helping to create a favorable 
environment for Nepal to resolve its political crisis. 
 
But Engages Opposition Parties 
------------------------------- 
 
¶3. (C) DDG Luo confirmed that State Councilor Tang Jiaxuan 
met with the leaders of the major political opposition 
parties during his visit.  While China has maintained 
contact with the political parties since the early 1990's, 
this was the first time a senior Chinese official has held 
talks with them in Nepal.  Luo said the Chinese delegation 
was surprised by the large spectrum of views held by the 
parties.  The Nepali Congress-Democratic (NC-D) appeared to 
be the most moderate of the three major political parties 
according to Luo, while the Communist Party of Nepal - 
United Marxist-Leninist (CPN-UML) held the strongest desire 
to see a mass movement to overthrow the Monarchy. 
 
And the King Complains of Meddling 
---------------------------------- 
 
¶4. (C) The King told Tang that he was willing to work with 
the political parties but viewed the Maoists as terrorists. 
The King complained that foreign countries engaging with 
the political parties are giving them greater legitimacy 
and interfering with Nepal's internal affairs.  At the same 
time, Luo reported that the King complained that India and 
China are not providing the Royal government with enough 
support.  Tang briefed the party leaders and the King on 
the importance of maintaining stability and suggested they 
learn from China's own years of turmoil, citing the 
Cultural Revolution and the Anti-Rightist campaign as 
examples of political instability that set back China's 
development. 
 
 
BEIJING 00005355  002 OF 004 
 
 
MFA Ready to Cooperate with U.S. on Getting Talks Started 
--------------------------------------------- ------------ 
 
¶5. (C) At the conclusion of his readout, Luo asked 
Ambassador Moriarty how the United States and China could 
work together to get the King and the political parties to 
start reconciliation talks.  (Comment:  Luo did not bother 
to try to square this request with China's long held 
position not to involve itself in the internal political 
debates of other countries.  End comment.)  The MFA was 
open to all suggestions, Luo said.  Ambassador Moriarty 
welcomed greater cooperation and said that U.S. relations 
with China and India will to a large extent determine U.S. 
foreign policy success in the 21st century.  Washington is 
concerned that instability in Nepal could hurt regional 
stability and damage relations between the United States, 
China and India.  The failure by the King and the political 
parties to start the reconciliation process has been 
frustrating, with the only real winners being the Maoists, 
who appear to be making progress towards their goal of 
achieving absolute power in Nepal.  Ambassador Moriarty 
stressed the U.S. view that the King and the political 
parties must work together to end the Maoist insurgency. 
 
A Possible Visit by Dr. Kissinger 
--------------------------------- 
 
¶6. (C) The high level of mistrust between the parties and 
the King has prevented a meeting between representatives 
from the parties and the Palace, according to Ambassador 
Moriarty. At the same time, Party leaders and the King are 
unwilling to meet directly unless both sides believe the 
talks will be a success.  Ambassador Moriarty suggested 
that perhaps a respected outsider could help the two sides 
save face and therefore facilitate contacts; Dr. Kissinger 
might have some interest in playing such a role.  Luo was 
enthusiastic about this possible approach and said that Dr. 
Kissinger was very respected in China. 
 
Party-by-Party Approach 
----------------------- 
 
¶7. (C) Commenting on the lack of consensus among the 
political parties on how to deal with the King and the 
Maoists, Luo asked the Ambassador whether one-on-one talks 
with each of the major parties and the King could help 
start a reconciliation dialogue.  The Ambassador pointed 
out that the King is trying to split the parties from one 
another, and is playing with the idea of isolating the UML, 
Nepal's second-largest party, entirely.  Since isolating 
the UML could drive it into the hands of the Maoists, there 
is a danger to holding one-on-one talks. 
 
China, U.S. and India Should Approach the Three Parties 
--------------------------------------------- ---------- 
 
¶8. () Luo then suggested that the U.S. and Chinese 
Ambassadors in Nepal invite the three political parties and 
Palace representatives to informal talks.  Ambassador 
Moriarty said this might be a useful idea, while stressing 
the importance of Indian participation in such a process. 
If India is not involved in the proposed talks, it would be 
able to prevent any joint U.S.- China efforts from going 
forward, he cautioned, noting that India has a large 
footprint in Nepal, 60 percent of Nepal's trade is with 
India and the Nepal government recognizes that it must work 
with India.  Luo professed surprise that India has that 
strong an influence over Nepal. 
 
India Likely First Victim of Maoist Victory 
------------------------------------------- 
 
¶9. (C) India would be the first victim of a Maoist victory 
in Nepal, Ambassador Moriarty stated.  Maoists in Nepal and 
India work together and have even signed an agreement to 
establish a revolutionary base stretching from Bhutan 
through Nepal to India.  A Maoist victory would destabilize 
India, cautioned Ambassador Moriarty, who pointed out that 
the number of Indian districts with a Maoist presence has 
grown rapidly.  He suggested that India would likely be 
forced to take strong actions in response to a Maoist 
takeover in Nepal. 
 
 
BEIJING 00005355  003 OF 004 
 
 
¶10. (C) The President raised the Nepal issue with Prime 
Minister Singh during his visit to India to ensure that 
India is on the right track, Ambassador Moriarty told Luo. 
The President and PM Singh publicly agreed that the Maoists 
must renounce violence and that the King must reconcile 
with the political parties.  This was a very careful 
formulation because of India's role in hosting talks 
between Nepal's political parties and the Maoists.  Under 
this formulation India cannot treat the Maoists as a normal 
political party if the Maoists continues to use violence 
and terrorism to achieve its political goals, pointed out 
Ambassador Moriarty. 
 
Beijing's Position Closer to Washington's 
----------------------------------------- 
 
¶11. (C) China is closer to the U.S. position on 
reconciliation talks than it is to India's, according to 
Luo.  China and the United States share a common goal and 
attitude toward the Maoists and the Royal family, he 
stated.  While Beijing and New Delhi discussed the Nepal 
situation during their second round of their strategic 
dialogue, the PRC still needs more time to work with the 
Indian side on Nepal, according to Luo.  Commenting that 
since New Delhi would likely be unhappy to see China play a 
larger role in Nepal, Luo suggested that perhaps the United 
States should try to host the first round of possible 
reconciliation talks.  The Ambassador responded that if 
India can be convinced to join in the talks, a very 
powerful message would be sent to the King and the 
political parties and offered to engage his Indian 
counterpart on the possibility of talks.  Luo said that 
China and the United States should "informally give it a 
try," saying that he would instruct the PRC Ambassador in 
Kathmandu to work with Ambassador Moriarty. 
 
U.S. Views on High-level Visits to Nepal 
---------------------------------------- 
 
¶12. (C) Luo asked whether the United States views Tang's 
recent trip to Nepal positively and how Washington would 
respond to the King's request to visit China in May. 
Ambassador Moriaty said that Tang's trip was important 
because it maintained pressure on the King to start 
reconciliation talks. He also cautioned Beijing to 
seriously consider the timing of the King's trip and 
suggested that the PRC put off the King's request until 
progress is made in starting reconciliation talks.  The 
King would use a visit to Beijing to demonstrate that he is 
still in control and does not need to reconcile with the 
political parties. Luo said that China has "taken note" of 
the King's request but has not accepted it yet.  Ambassador 
Moriarty suggested that China wait until it became clearer 
whether the King was genuinely interested in 
reconciliation, and stressed that it is important to keep 
pressure on the King.  He noted that April could be a very 
crucial month for the Nepal government. 
 
Nepal's Future 
-------------- 
 
¶13. (C) Responding to Luo's question on Nepal's future, 
Moriarty said that a compromise must be reached in the 
coming weeks or Nepal faces a very dark future.  If the 
brittle government falls, the Maoists will likely come out 
on top. Ambassador Moriarty pointed to January 14th as a 
key turning point for the Maoist insurgency. Before then, 
Nepal's government ministers were confident that Nepal 
would overcome the Maoist insurgency.  After the January 14 
Maoist attack on a Royal government police post in the 
Katmandu Valley, the Ministers began moving their assets 
out of Nepal and openly began sharing their concerns. 
After the attack, the Royal government realized that the 
Maoists could carry out military strikes any where in 
Nepal.  The political parties are weak and have no weapons, 
little money and are unable to generate popular protests 
without Maoist support, because of the population's fear of 
possible Maoist reprisals. 
 
Comment 
------- 
 
¶14. (C) Given China's important role in Nepal, it is worth 
 
BEIJING 00005355  004 OF 004 
 
 
exploring whether the GOI will veto out of hand any role by 
the Chinese in pushing the King and political parties 
towards reconciliation.  Luo was a member of State 
Councilor Tang Jiaxuan's delegation to Nepal March 16-18. 
During the late 1990's, Luo served at the PRC Embassy in 
Washington and worked on the India-Pakistan nuclear issue. 
 
¶15. (U) This cable was cleared by Ambassador Moriarty. 
RANDT