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C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 001531 
 
SIPDIS 
 
STATE FOR EAP/CM - THOMAS, FLATT, THORNTON, SHEAR 
STATE FOR S/P - CHOLLET, GREEN 
STATE FOR E -- YON 
STATE FOR D -- PARK 
STATE PASS USTR FOR STRATFORD 
NSC FOR LOI 
TREASURY FOR EUGENE HUANG, CHRIS WINSHIP 
PARIS PASS OECD 
 
E.O. 12598:  DECL: 06/07/29 
TAGS: PREL PARM UNSC ECON EFIN EAID MNUC PTER JP AF PK KS
KN, RS, CH 
SUBJECT: S/P Slaughter's Talks with MFA, MOFCOM, NDRC, and Academics 
on Strategic Opportunities and Challenges 
 
Classified by Economic Minister-Counselor Robert Luke.  Reasons 1.4 
(b) and (d). 
 
SUMMARY 
------- 
 
¶1. (C) In a June 1 meeting with Ministry of Foreign Affairs (MFA) VM 
He Yafei, State Department Policy Planning Director Anne-Marie 
Slaughter discussed the U.S. proposed agenda for the late July first 
meeting of the U.S.-China Strategic and Economic Dialogue (SnED), 
noting differences between the two sides on the agenda had narrowed 
significantly.  MFA Policy Planning DG Le Yucheng, in a separate 
discussion, called the planned U.S.-China-Japan trilateral meeting a 
"mature" idea but highlighted the need to mitigate potential concern 
by the Republic of Korea (ROK) and others.  Le welcomed renewed U.S. 
engagement on Afghanistan and Pakistan (AfPak), and called for a 
greater regional and multilateral role on Pakistan, possibly in a 
form modeled on the Six-Party Talks.  Ministry of Commerce (MOFCOM) 
VM Fu Ziying told Slaughter China is willing to work together with 
the United States on specific foreign assistance projects, but wants 
to keep it "low-key for now."  National Development and Reform 
Commission (NDRC) Vice Chairman Zhang Xiaoqiang said China wants to 
move forward on climate cooperation and seeks clarity on counterpart 
officials and responsibilities now that State has taken over lead 
from Treasury.  Former Party School Executive VP Zheng Bijian said 
China's peaceful development requires good U.S. relations and invited 
senior U.S. participation at an energy forum he is organizing.  Three 
premier Chinese international relations scholars advised Slaughter 
that the "responsible stakeholder" term rubbed many Chinese people 
the wrong way and suggested reframing the relationship as a focused 
"partnership."  End Summary. 
 
Discussion with MFA VM on SnED Agenda 
-------------------------------------- 
 
¶2. (SBU) Director Slaughter delivered a demarche on Pakistan 
Displaced Persons (septel) and discussed the plenary session and 
strategic track of the SnED in a 90-minute June 1 meeting with VFM 
He. 
 
¶3. (C) VFM He urged the U.S. to arrange for President Obama to kick 
off the SnED meeting, promising that PRC President Hu Jintao would 
reciprocate in China in 2010.  He expressed China's expectation that 
China's delegation would also call on the President at the White 
House at the SnED's conclusion.  VFM He agreed with the U.S. proposed 
plenary format with the first hour devoted to remarks by the 
President, if that is arranged, followed by the four co-chairs. 
 
¶4. (C) In a break with the previous Chinese position, VFM He also 
agreed to the U.S. proposal that the third hour of the opening 
session be a private meeting of the four co-chairs to discuss 
President Obama's visit to China in November, the purpose and 
direction of the SnED, and other sensitive topics. 
 
¶5. (C) For the strategic track, VFM He proposed discussing issues in 
three "baskets."  The first basket would deal with bilateral 
relations, including:  defining what we mean by a positive, 
cooperative and comprehensive relationship; elucidating core issues 
of concern (Tibet, Taiwan and Xinjiang for the PRC); and reviewing 
our respective strategic security issues, such as energy security, 
military strategy and intentions in the Pacific, and broad economic 
development strategies.  Basket Two would focus on global issues like 
energy, environment, climate change, arms control, food security, and 
infectious diseases.  He added that specific details of cooperation 
under the Ten-Year Framework should take place in the economic track. 
 Basket Three would include international and regional hot spots like 
North Korea, South Asia, Iran, Sudan, Africa, and development issues. 
 
¶6. (C) VFM He said China envisioned the Secretary and State Councilor 
Dai talking in a "strategic fashion" and providing guidance to lower 
level officials responsible for the Latin America, Africa, and 
South/Central Asia sub-dialogues.  He made clear that China did not 
expect all the issues in each basket to be discussed at the first 
 
BEIJING 00001531  002.2 OF 004 
 
 
SnED, saying that the two sides could pick and choose in response to 
the circumstances. 
 
¶7. (C) VFM He showed some flexibility on the idea of issuing a joint 
statement for the overall SnED, especially after Slaughter indicated 
the importance the President and Secretary placed on demonstrating 
the SnED's role in driving the relationship forward.  VFM He said he 
was hesitant to have the principals get bogged down in negotiating a 
detailed joint document but was open to the possibility of a short, 
concise, and strategic statement. 
 
Policy Planning DG:  PRC Positive on U.S.-China-Japan Trilat 
--------------------------------------------- -------- 
 
¶8. (C) After outlining his department's work, MFA Policy Planning DG 
Le Yucheng told Director Slaughter that his office leads China's 
planning for the U.S.-China-Japan trilateral meeting.  He cautioned 
that such a trilateral could cause concern among other countries, 
especially the ROK and Russia, and suggested that we proceed 
cautiously, seek gradual progress, and accommodate the interests of 
these other parties.  China was nevertheless positive on the concept, 
he emphasized, noting that China proposed the idea in 2007 at the 
U.S.-China Senior Dialogue.  Calling the idea a "mature" one, he 
asserted that recent progress on bilateral relations among the three 
would provide a conducive backdrop to the talks.  Le said that 
developments such as the global financial crisis had put the 
spotlight on common challenges that could be addressed in a 
trilateral forum. 
 
¶9. (C) On agenda items, Le proposed the global financial crisis, 
global governance, energy security, climate change, and anti-pirate 
coordination.  He advised against media outreach in relation to the 
talks and against a joint statement.  He suggested a successful start 
to the talks could eventually lead to its escalation to the AFM or 
even ministerial level. 
 
Multi-lateralizing Af/Pak 
------------------------- 
 
¶10. (C) Turning to regional security, Le said China's neighboring 
countries had been negatively impacted by the global economic 
turbulence.  Pakistan had suffered from regional fragmentation and 
fragmentation of its political structure.  He expressed alarm at the 
current security situation in Pakistan, adding that Chinese workers 
there faced increased threats.  Le said China worried that a chaotic 
Pakistan could cause "Afghanistan-ization" of other countries in the 
region, and China welcomed and supported the increased U.S. 
engagement on Af/Pak. 
 
¶11. (C) Le suggested that more multilateral engagement on Af/Pak 
would be useful, possibly in the form of an international conference 
or mechanism modeled after the Six-Party Talks.  He pointed to the 
importance of regional engagement, including with India and Russia, 
to ensure the influence of regional powers is coordinated with U.S. 
efforts.  Le sought insight into whether there was truth to the 
"rumors" that the U.S was engaging with elements of the Taliban. 
 
Ready to Go on Limited Development Assistance Cooperation 
--------------------------------------------- --------- 
 
¶12. (SBU) VM Fu Ziying told Dr. Slaughter that MOFCOM is the 
appropriate agency to discuss development assistance, though he asked 
her to keep in mind that China is a poor country, and thus does not 
have the same financial resources available for overseas development 
assistance as the United States.  Nonetheless, he said China is 
willing to collaborate with the United States at the working level on 
identifying one or two projects for joint work, leveraging China's 
comparative advantage in human resources and America's in financial 
resources.  He warned against including this as an agenda item for 
the first SnED, saying it would be better to start off small and 
concrete rather than risk getting entangled in high-level talks on 
philosophical differences.  He said both China and the United States 
share a commitment to reducing poverty around the world, and that 
 
BEIJING 00001531  003.2 OF 004 
 
 
this forms a solid basis for cooperation. 
 
NDRC Wants Clarity on Climate Counterparts 
------------------------------------------ 
 
¶13. (C) Vice Chairman Zhang Xiaoqiang said NDRC is eager to move 
forward on climate cooperation and hopes for clarity on counterpart 
officials and responsibilities now that State has taken over lead 
from Treasury.  Zhang noted Vice Chairman Xie Zhenhua had given U.S. 
Special Envoy for Climate Change Todd Stern a draft memorandum of 
understanding (MOU) during Xie's recent DC visit and that he hopes 
Stern will respond to it during Stern's early June visit to Beijing, 
adding that the MOU could be an important part of the first SnED. 
Zhang added NDRC would like to maintain the State-NDRC Dialogue. 
China's Peaceful Development Requires Good U.S. Relations 
--------------------------------------------- ---------- 
 
¶14. (SBU) Former Party School Executive Vice President Zheng Bijian 
told S/P Director Slaughter that China is focused on its peaceful 
rise on the world stage.  He noted, however, there are many 
challenges on China's development path including shortcomings in the 
areas of democracy, culture, and civil society.  China hopes to 
realize a moderately well-off society by 2020 and become a modern 
society by 2050, and China's leadership has a clear picture of what 
it will take to reach these goals, Zheng said.   China will pursue 
good relations with the United States to help realize the stable 
conditions required for development.  Although bilateral differences 
exist, U.S.-China relations can make progress if handled correctly. 
 
¶15. (SBU) Asked by Slaughter how China will balance being 
simultaneously a developing country and a world power, Zheng replied 
that it is only through cooperation with countries like the United 
States that China can realize its goal of peaceful development. 
Zheng noted that a successful bilateral relationship requires an 
emphasis on practical results and, as an example, emphasized his role 
in organizing a U.S.-China Energy Partnership Forum in early 
September which is co-sponsored by the Brookings Institution and the 
China Institute of Strategy and Management. 
 
Scholars Recommend Calling Relationship a "Partnership" 
--------------------------------------------- ---------- 
 
¶16. (C) In a roundtable discussion with international relations 
professors Chu Shulong (Tsinghua University), Zhu Feng (Peking 
University), and Jin Canrong (Renmin University) (strictly protect 
all), the three scholars unanimously suggested that any new 
description of U.S.-China relations use some form of the word 
"partner," even if conditioned by another word or phrase.  They 
thought the U.S. calling on China to be a "responsible partner" would 
be an improvement over the "responsible stake-holder" formulation, 
which they claimed had taken on negative connotations to Chinese 
observers.  Chu stressed that any formulation needed to be persuasive 
and Zhu Feng added that it should also be meaningful at an emotional 
level to ordinary Chinese citizens.  Jin suggested using 
issue-specific formulations instead of a single over-arching 
catch-phrase.  Chu and Zhu agreed that the issue was the wording and 
that China should indeed play a more responsible role in the global 
system. 
 
Avoid Marginalizing Japan, Give it a Greater Role 
--------------------------------------------- ---- 
 
¶17. (C) Chu Shulong argued that Japan needed to have a greater role 
in regional and global governance systems given its economic 
importance, and that constraining Japan too much diplomatically could 
be dangerous; he acknowledged, however, that his was a minority view 
in China.  He said that a U.S.-China-Japan trilateral meeting could 
play a helpful role in engaging the Japanese on regional issues.  He 
reported that Chinese and Japanese leaders had "agreed to discuss" UN 
Security Council reform, although no "formal" arrangements had 
emerged.  Zhu Feng noted that the Japanese were very nervous about 
the G-2 concept, and the U.S. and China should continue to distance 
themselves from the formulation. 
 
BEIJING 00001531  004.2 OF 004 
 
 
 
¶18. (U) The delegation has cleared this cable.