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RUEHAH/AMEMBASSY ASHGABAT 0711
RUEHTA/AMEMBASSY ASTANA 0018
RUEHEK/AMEMBASSY BISHKEK 1303
RUEHTA/AMEMBASSY DUSHANBE
RUEHIL/AMEMBASSY ISLAMABAD 6593
RUEHBUL/AMEMBASSY KABUL 0351
RUEHNE/AMEMBASSY NEW DELHI 4421
RUEHNT/AMEMBASSY TASHKNT 1125

C O N F I D E N T I A L SECTION 1 OF 02 BEIJING 005776 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 09/04/2017 
TAGS: PREL PTER ETRD ENRG MARR ZK XD CH RS
SUBJECT: CHINESE CENTAL ASIA WATCHERS UPBEAT ON RESULTS OF 
SCO SUMIT 
 
REF: A. (A) BISHKEK 1048 
     ¶B. (B) MOCOW 3996 
     ¶C. (C) BEIJING 5046 
     ¶D. () SHANGHAI 529 
     ¶E. (E) YEKATERINBURG 79 
 
Classified By: Classified by Political Miniser Counselor Aubrey Carlso 
n for reasons 1.4 (B/D). 
 
¶1. (C) Summary:  Three Chinese observers of Central Asian 
affairs lauded the mid-August Shanghai Cooperation 
Organization (SCO) summit, citing counter-terrorism 
cooperation, military exercises, trade and energy.  The 
scholars told us China is increasingly looking to its SCO 
partners for resources.  They said that an expansion of SCO 
membership, even to include Turkmenistan, is unlikely in the 
near term and expressed doubt that the SCO would be a vehicle 
to pressure Kyrgyzstan to close the U.S. military airbase 
Manas.  End Summary. 
 
The "Three Evils:" Terrorism, Extremism and Separatism 
--------------------------------------------- --------- 
 
¶2. (C) Chinese Academy of Social Sciences (CASS) Institute of 
Russian, East European and Central Asian Studies Director Wu 
Hongwei and Deputy Director Dong Xiaoyang asserted to Poloff 
August 22 that the United States and China share strong 
concerns over the "three evils" of terrorism, fundamentalism 
and separatism, which the SCO was founded to combat.  Wu said 
separatists invariably band together with extremists, and 
together they use terrorist tactics to pursue their goals. 
Wu criticized U.S. policy on terrorism for making 
distinctions among the "three evils" and insisting on a high 
standard of proof. 
 
Trade 
----- 
 
¶3. (C) Separately on August 22, Cheng Yurong, Director of the 
Center for SCO Studies and of the MFA-affiliated China 
Institute of International Studies (CIIS) European-Central 
Asian Studies Division, agreed with the CASS scholars on the 
increasing attention devoted to trade in the SCO.  She noted 
that Chinese trade with all of the Central Asian SCO member 
nations has risen sharply since the founding of the SCO in 
2001 (when the Shanghai Five accepted Uzbekistan's membership 
and became the SCO).  For example, trade with Kazakhstan in 
the first half of 2007 is up over 60 percent when compared 
with the same period in 2006.  Market demand, trade policies, 
including a new free trade zone on the border with 
Kazakhstan, and growing transportation links, including a 
planned rail link with Kyrgyzstan, are driving the increase. 
 
Energy Cooperation . . . 
------------------------ 
 
¶4. (C) The CASS and CIIS scholars all stressed the growing 
role of energy in SCO deliberations.  For example, at the 
recent summit China and Kazakhstan agreed to double the 
annual volume shipped through the China-Kazakhstan crude oil 
pipeline.  In addition, Kazakhstan and Uzbekistan (as well as 
non-SCO member Turkmenistan) within the last month all signed 
new oil pipeline agreements with China.  While these deals 
are not directly linked to the SCO, the scholars said they 
believe SCO cooperation played a role in developing them. 
 
. . . and Conflict 
------------------ 
 
¶5. (C) The three scholars agreed hydropower could be a 
stumbling block for SCO cooperation.  They noted Uzbek 
President Islam Karimov's remarks at the summit regarding use 
of the shared water resources of the Amu Daria and Syr Daria 
rivers, which have their headwaters in Tajikistan and 
Kyrgyzstan, respectively, and which have significant 
potential for hydroelectric electricity.  As it stands, 
Kyrgyzstan exploits only ten percent of its hydroelectric 
resources and aims to be a major electricity exporter.  China 
has been funding the expansion of hydroelectricity in 
Kyrgyzstan and Tajikistan.  Karimov, however, vocally opposed 
any reduction in the flow of the Amu Daria and Syr Daria 
rivers, which are a primary source of irrigation water for 
Uzbek cotton. 
 
BEIJING 00005776  002 OF 002 
 
 
 
New Members 
----------- 
 
¶6. (C) The CASS academics said new members are unlikely to 
join the SCO in the near term.  They repeated Chinese 
official statements, published in Xinhua and other open 
sources in advance of the summit, that the SCO is too young 
and not yet ready for new members, saying that the relatively 
new organization has yet to figure out the role for existing 
observers.  CASS Deputy Director Dong, describing the 
problems between India and Pakistan as "unsolvable," said 
China fears that those two nations would bring their 
bilateral problems with them to the SCO.  Iran, Wu and Dong 
said, is dabbling in "sensitive" issues like nuclear weapons. 
 Allowing Iran in the SCO could negatively influence other 
members' development.  Turkmenistan, they said firmly, will 
not join the SCO and will continue to maintain an 
isolationist policy. 
 
Manas Airbase 
------------- 
 
¶7. (C) The CIIS and CASS scholars all predicted the SCO will 
not be a vehicle for pressuring Bishkek to expel the U.S. 
military presence from Kyrgyzstan.  They said Kyrgyzstan 
would be foolish to ask America to leave Manas Airbase.  The 
SCO leaders recognize that the United States is using Manas 
as a forward operating base to attack the Taliban, the single 
largest threat to regional stability in Central Asia. 
 
War Games: Peace Mission 2007 
----------------------------- 
 
¶8. (C) CIIS' Cheng said military cooperation among SCO 
members is nothing new; this year's joint military exercise 
was the third time since the founding of the SCO that joint 
military exercises have taken place.  CASS' Wu and Dong said 
the exercise was designed purely to fight terrorism and was 
not directed at other nations.  They grumbled that they did 
not understand reports in the U.S. press suggesting that the 
United States had something to fear from the exercise.  The 
researchers conceded that the several-thousand-man-strong 
military maneuvers did not quite square with the exercise 
scenario of a small village being liberated from terrorists. 
However, quoting Russian President Putin's remarks that the 
fundamental goal of the SCO is counter-terrorism and not a 
military alliance, they disputed contentions that the 
exercises were a sign that the SCO aspires to be an "Eastern 
NATO." 
Randt