VZCZCXRO0621
OO RUEHCN
DE RUEHBJ #0683/01 0130456
ZNR UUUUU ZZH
O 130456Z JAN 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5483
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHGV/USMISSION GENEVA 0696
RUEANAT/NASA WASHDC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 03 BEIJING 000683 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL TSPA KIPR KN IR TW CH
SUBJECT: U.S.-CHINA WORKING GROUP MEETS VFM QIAO ZONGHUAI 
 
SUMMARY 
------- 
 
¶1. (SBU) Maintaining close relations with the DPRK and Iran 
gives Beijing the ability to play a constructive role in 
resolving their nuclear issues, VFM Qiao Zonghuai told 
Congressmen Mark Kirk, Rick Larsen and Tom Feeney on January 
¶10.  China remains dedicated to fulfilling commitments it 
made to IPR protection when it acceded to the WTO and has 
strengthened legislation, enforcement and public education 
efforts.  Though China's energy imports are increasing, they 
have not reached a level that could have a major impact on 
the surge of oil prices in the international market.  China's 
foreign policy is aimed at creating a peaceful international 
environment that is favorable to China's economic 
development.  Appropriate handling of the Taiwan question is 
key to the growth of U.S.-China relations.  While China hopes 
the U.S.-China Working Group will block pro-Taiwan or 
anti-China bills in Congress, Congressman Kirk insisted that 
the Working Group represents all opinions in the House of 
Representatives.  Qiao supports recommendations by 
Congressman Kirk that the United States and China establish a 
Pentagon-Ministry of Defense direct telephone link and 
cooperate on allowing Chinese Shenzhou space vehicles to 
carry out emergency docking with the International Space 
Station.  End Summary. 
 
¶2. (SBU) Thanks to efforts by both sides, U.S.-China 
relations maintained stable development in 2005, VFM Qiao 
Zonghuai told Congressmen Mark Kirk, Rick Larsen and Tom 
Feeney January 10.  Frequent and close contact between 
President Bush and President Hu last year helped enhance 
mutual understanding and advance relations.  Beijing hopes 
that President Hu's visit to the United States in April 2006 
will give a strong boost to these ties.  The United States 
and China have cooperated for many years in the fields of 
education, science and technology, culture, public health and 
defense.  The two governments have worked closely on 
counterterrorism, nonproliferation, combating avian influence 
and nuclear issues.  Cooperation is broadening in scope and 
deepening in content.  Due to differences in history, culture 
and national circumstances, however, the United States and 
China do have some differences.  The timing of the founding 
of the U.S.-China Working Group is good for China, Qiao 
summarized, as it is often in election years in Congress that 
U.S.-China relations experience disruptions. 
 
¶3. (SBU) The U.S.-China Working Group was founded seven 
months ago, Congressman Larsen told VFM Qiao, based on the 
idea of creating in Congress a bipartisan space for good 
conversation and good debate on how to move forward U.S. 
relations with China.  The purpose of the group is not to 
take bloc positions on issues but to let members educate 
themselves on the many issues in the bilateral relationship, 
including both areas of agreement and disagreement, Larsen 
explained. 
 
Relations with North Korea and Iran 
----------------------------------- 
 
¶4. (SBU) A question faced by the U.S.-China Working Group, 
Congressman Feeney said, is why China maintains relations 
with countries like North Korea and Iran which seek to 
destabilize their respective regions.  China and the DPRK 
share a 1300-kilometer common border, VFM Qiao responded, so 
the question of denuclearization of the Korean Peninsula is 
of great importance to China.  In recent years, China has 
worked with other parties to make the Six-Party Talks 
possible and to encourage progress at the Talks.  China 
believes that solving the North Korean nuclear issue through 
peaceful talks that maintain peace and stability on the 
Korean Peninsula serves the interests of China, the United 
States and other countries.  Though the problem is 
complicated and there are difficulties in finding a solution, 
China will continue to work with the other parties, 
particularly the United States, to find a proper and 
appropriate solution. 
 
¶5. (SBU) Both China and the United States are completely 
opposed to Iran's possession of nuclear weapons and to any 
nuclear proliferation, Qiao continued.  China's believes the 
Iran nuclear issue should be resolved within International 
Atomic Energy Agency (IAEA) parameters and supports efforts 
by the EU to find a long-term solution.  It is important to 
resume EU-Iran talks.  In their meetings January 9 with 
Iranian Deputy Foreign Minister Mehdi Safari, Foreign 
Minister Li Zhaoxing and VFM Zhang Yesui reiterated China's 
position that Iran should exercise restraint and resume 
negotiations.  Speaking more broadly to the question of 
 
BEIJING 00000683  002 OF 003 
 
 
China's relations with North Korea and Iran, Qiao said the 
United States should bear in mind that China's close 
relations with these countries give Beijing the ability to 
play a positive and constructive role. 
 
Protection of Intellectual Property Rights 
------------------------------------------ 
 
¶6. (SBU) Although Congress has recently focused on the China 
National Offshore Oil Corp (CNOOC)-Unocal issue and Senator 
Schumer's bill relating to valuation of China's currency, 
Congressman Kirk said, what U.S. exporters really care about 
with regard to China is protection of Intellectual Property 
Rights (IPR).  The United States and China should spend more 
time figuring out how to build an "invention culture" in 
China.  The Chinese Government attaches great importance to 
protection of IPR, Qiao responded, and remains unswervingly 
dedicated to fulfilling the commitments China made when it 
acceded to the WTO.  Noting that he previously served in 
Geneva, Qiao said he had close contact with the World 
Intellectual Property Organization (WIPO) in the past.  China 
has acceded to 15 of the 22 WIPO conventions.  In the past 27 
years since initiation of reform in China, the PRC has passed 
30 laws relating to IPR protection, including laws covering 
patents, trademarks and copyrights. 
 
¶7. (SBU) In addition to passing legislation, China has 
strengthened law enforcement efforts and has begun a campaign 
to educate Chinese citizens about IPR through specialized TV 
programs, Qiao continued.  Violations of IPR do occur and the 
government is taking actions to address these.  Noting a 2005 
agreement between the United States and China to exchange 
experts on IPR protection, Qiao praised U.S.-China 
cooperation on the issue. 
 
Energy Policy 
------------- 
 
¶8. (SBU) Last year's debate in Congress over CNOOC's bid to 
purchase Unocal was based in part on questions raised by 
China's rising energy consumption and attempts to lock-in 
energy supplies, Congressman Larsen said.  Energy security is 
an area where the United States and China need further 
discussion to better understand one another and find areas of 
agreement.  Areas where the two countries might cooperate 
include energy investment, research on energy efficiency, 
application of alternate sources of energy and China's 
participation with the International Energy Agency, which 
seeks to eliminate fluctuations in supply and price. 
 
¶9. (SBU) China's energy imports are not at a level that could 
cause a surge of oil prices in the international market, Qiao 
argued.  China still derives seventy percent of its energy 
from coal and just over twenty percent from oil.  In 2005, 
China produced 160 million tons of oil and imported an 
additional 130-140 million tons, maintaining a high rate of 
self-sufficiency.  China's oil imports are still only a small 
percentage of total oil imports worldwide.  The United States 
and China should enhance cooperation on energy and on the 
international supply and demand of oil to achieve a mutually 
beneficial, win-win result. 
 
Taiwan 
------ 
 
¶10. (SBU) VFM Qiao told the Congressmen that appropriate 
handling of the Taiwan question is key to the growth of 
U.S.-China relations.  China will never waiver in its 
adherence to the one-China policy, will never give up on 
peaceful reunification, will never compromise in the fight 
against secessionist forces and will never give up on the 
Taiwanese people.  The mainland took measures in 2005 
resulting in improvement of relations with Taiwan, but Chen 
Shuibian and the Taiwanese authorities continue to trumpet 
their ideas of Taiwan independence and "so-called 
constitutional re-engineering," Qiao claimed.  China hopes 
that the U.S.-China Working Group understands the sensitivity 
of these issues and that the United States will continue to 
uphold the one-China principle, adhere to the three 
communiques, oppose Taiwan independence and oppose rhetoric 
aimed at changing the status quo.  Congressman Larsen 
responded that the United States supports the one-China 
principle and abides by the three communiques and the Taiwan 
Relations Act, cautioning Qiao that the United States does 
not want to see any party take unilateral action. 
 
¶11. (SBU) VFM Qiao told the Congressmen that China hopes the 
U.S.-China Working Group will use its influence in Congress 
to oppose or block any pro-Taiwan or anti-China bills in 
 
BEIJING 00000683  003 OF 003 
 
 
Congress.  Congressman Kirk rejected this notion, saying that 
the Working Group represents all opinions in the House of 
Representatives, ranging from support for Taiwan independence 
at one extreme and complete support for the mainland at the 
other. 
 
Intentions Behind PRC Foreign Policy 
------------------------------------ 
 
¶12. (SBU) Calling attention to statements by Secretary Rice 
and Deputy Secretary Zoellick that the United States welcomes 
a confident, peaceful and prosperous China, Congressman 
Larsen asked Qiao to explain how China's foreign policy fits 
into its stated goals of seeking balanced development and a 
harmonious society, both of which seem to focus on China's 
domestic situation.  China's foreign policy, Qiao responded, 
is aimed at creating a peaceful international environment 
that is favorable to China's economic development.  Although 
China's GDP is now ranked number six in the world, per capita 
income is only ranked number 107.  The Chinese Government's 
most pressing task is to develop China's economy to meet the 
increasing material and cultural demands of the Chinese 
people, with a goal to achieve a moderately prosperous 
country by mid-century. 
 
Pentagon-MOD Direct Communications Link 
--------------------------------------- 
 
¶13. (SBU) Noting that the Pentagon currently maintains direct 
communications links with Ministries of Defense in 26 
countries and that there are direct communications links 
between President Bush and President Hu as well as the 
Department of State and the MFA, Congressman Kirk said that 
due to "China's rise" it is time for the Pentagon and China's 
Ministry of Defense to upgrade their communications and 
establish a Defense Telephone Link.  Qiao said he is not 
aware of details on efforts to establish such a link, but 
thinks taking this action would help build trust and promised 
to convey the recommendation to PRC military authorities. 
 
U.S.-China Cooperation in Space 
------------------------------- 
 
¶14. (SBU) Russian Soyuz rockets already have the capability 
to dock at the International Space Station (ISS), Congressman 
Kirk said, noting that Congressman Feeney's dstrict includes 
the U.S. space launch facilities at Cape Canaveral.  China 
should have a similar docking ring for its Shenzhou space 
vehicles.  While it would require some engineering, adding 
this capability to the ISS would allow astronauts in 
emergency situations to be rescued and could be beneficial to 
U.S.-China relations.  Noting that he had been a researcher 
in space science 20 years ago, VFM Qiao agreed that 
harmonizing technical standards of space vehicles would 
contribute to the ISS and enhance mutual trust. 
 
¶15. (U) Participants: 
 
U.S. Delegation 
--------------- 
Congressman Mark Kirk 
Congressman Rick Larsen 
Congressman Thomas Feeney 
The Ambassador 
Stephan Orlins, President, National Committee on U.S.-China 
Relations 
Richard Goldberg, U.S.-China Working Group Co-Staff Director 
Dr. Yang Hong, Bryant University 
Embassy Officers 
Interpreter 
 
Chinese Delegation 
------------------ 
VFM Qiao Zonghuai 
Wang Xiaolong, MFA Deputy Director General for International 
Organizations 
Deng Hongbo, Counsellor, Office of U.S. Affairs, MFA North 
American and Oceanic Division 
MFA Officers 
 
¶16. (U) The delegation has cleared this cable. 
Randt