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TO RUEHC/SECSTATE WASHDC IMMEDIATE 4717
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RUEHBJ/AMEMBASSY BEIJING PRIORITY 0168
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RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 0743
RHMFISS/CDR USSOUTHCOM MIAMI FL

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 001578 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/24/2016 
TAGS: PREL ETRD ECON LA CH JA KS EC
SUBJECT: ECUADOR: ASIAN DIPLOMATS EAGER FOR DIALOGUE 
 
REF: STATE 70035 
 
Classified By: PolChief Erik Hall for reasons 1.4 (b&d) 
 
¶1.  (C) Summary:  Our recent outreach to diplomatic 
counterparts from China, Japan and Korea found them highly 
aware of USG coordination efforts (described RefTel), and 
eager to engage in dialogue about the political and economic 
situation in Ecuador and the region.  In deference to USG 
concerns about the recent confiscation of Occidental 
Petroleum's assets, Asian diplomats have urged caution to 
national companies interested in acquiring those assets. 
They also expressed concern about Venezuelan inroads in 
Ecuador, and regional trends toward populism.  We will 
continue to engage in dialogue to promote shared interests in 
Ecuador and the region.  End Summary. 
 
Chinese Laying Low on Oxy; Jealous on Taiwan 
-------------------------------------------- 
 
¶2.  (C) Political Counselor Li Dong told PolChief on June 15 
that Beijing had sent a detailed accounting of A/S Shannon's 
meeting with his Chinese counterpart, and the GOC is very 
open to dialogue with us on Ecuador and the region.  He was 
already in contact with various Embassy officers, and found 
it useful to exchange views, especially on the stability of 
Ecuador's notoriously unstable presidency.  He noted that he 
had differed with us in 2003, when we were predicting 
ex-president Lucio Gutierrez' downfall (which came in 2005). 
More generally, Dong said, Chinese policy here in Ecuador is 
one of absolute respect for non-intervention, "somewhat 
different from the U.S. approach."  Chinese interests are 
focused principally on energy sector cooperation and Taiwan. 
FM Carrion's recent visit to Beijing had been positive, and 
included an agreement for China to provide credits. 
 
¶3.  (C) On the Oxy case, Dong said the Chinese, who bought 
Encana's oil fields (sold by Oxy, fueling the controversial 
GOE decision to cancel Oxy's contract and confiscate its 
assets), are "keeping a low profile."  (Note: the Chinese 
bought shortly before the GOE enacted its controversial 
hydrocarbons law, effectively reducing the value of what 
China purchased.  Other sources have told us the Chinese feel 
burned by the experience and will refrain from further 
investments for the near term.  End Note.)  On Taiwan, 
despite instability, Dong claimed good relations with the 
GOE.  The exception was under FM Heinz Moeller (under 
president Gustavo Noboa, 2000-02), who he called 
"two-faced"--telling them what they wanted to hear, but 
entertaining separate deals with Taiwan.  Ex-president Lucio 
Gutierrez visited Taiwan as a candidate, and took money, but 
as president respected the one-China policy.  Gutierrez' 
brother Gilmar told Dong that Taiwan was offering $2 billion 
for full diplomatic recognition.  Dong said he did not make a 
counter-offer, warning Gutierrez to scrutinize the Taiwanese 
offer carefully.  In the end, no such deal was made.  Much of 
Chinese activity in Quito is focused on monitoring the 
Taiwanese interest section.  On the Gutierrez-era visa 
scandal and the furor over Chinese aid including arms, Dong 
claimed no proof was ever developed. 
 
¶4.  (C) Turning to regional issues, Dong denied any Chinese 
military assistance to Cuba, and refuted US NGO critics who 
claimed dynamite donated for road building was for military 
purposes.  In response to USG concern over the sale of radars 
to Venezuela, he said China's aid was purely logistical, and 
as long as the U.S. and Venezuela maintain commercial 
relations, there were no grounds to criticize China.  China 
views the Garcia and Uribe victories in Peru and Colombia as 
stabilizing factors in the region.  The recent meeting of the 
Community of Andean Nations in Quito seemed to smooth things 
over among the Andeans (absent Venezuela). 
 
Japanese Stay Out of Politics, While Blessing Roldos 
--------------------------------------------- ------- 
 
¶5.  (C) Japanese PolChief Ryu Murasawa was also well aware of 
the Shannon initiative, and had received recent reports from 
other capitals in the region reporting on recent outreach 
efforts by our colleagues.  Murasawa assured us that the 
Japanese Embassy here is very disposed to engage in dialogue 
with us on Ecuador and regional issues.  He noted that 
dialogue is already ongoing between our nation's ambassadors 
in Quito. 
 
¶6.  (C) Murasawa commiserated over the Oxy case and noted 
that Japanese firms also find the business and political 
 
QUITO 00001578  002 OF 002 
 
 
environment in Ecuador difficult.  For example, a Japanese 
oil firm (Teiko) is frustrated by GOE delays permitting 
access to Teiko's exploration fields--the Energy Ministry has 
not responded to the Japanese request for over a year.  Teiko 
is also interested in bidding for Oxy's former property 
(referred to as Block 15), but is not inclined to take 
another risk while its other operations are suspended.  The 
largest Japanese private investment in Ecuador, a forestry 
operation in tropical Esmeraldas, gave up and left Ecuador 
recently, after the Environment Ministry had delayed acting 
on a permit request. 
 
¶7.  (C) Murasawa expressed concern about regional trends 
toward populism, and satisfaction with the Garcia victory in 
Peru, where Japan has strong interests.  Asked whether Japan 
might consider supporting civil society efforts to promote a 
shared political agenda among presidential candidates, 
Murasawa said Japan shies away from political assistance or 
interference of any sort in its foreign assistance to 
Ecuador.  Nevertheless, presidential front-runner Leon Roldos 
recently visited Japan at GOJ invitation.  Murasawa said the 
visit was deliberately "low-key," and did not share details 
about who Roldos met with in Tokyo. 
 
Korea 
----- 
 
¶8.  (C) June Seo Park, Korean Pol/Econ officer expressed 
appreciation to PolChief for A/S Shannon's recent 
consultations in Asia.  Korea is a staunch ally of the U.S., 
he professed, and its highest foreign policy priority is to 
achieve an FTA with us.  One of only three Korean diplomats 
here, Park said there were approximately 800 Koreans resident 
in Ecuador, mostly engaged in sales of Korean manufactures. 
 
¶9.  (C) Park said Korean investors had come to him recently 
to express interest in winning Oxy's former contract to 
exploit the Block 15 oilfield.  Park warned the investors, 
(from ILDO Energy Resources) to stay away from the former Oxy 
fields, since the issue between the US and Ecuador remains 
open.  Park later informed the GOE that ILDO did not have the 
support of the Korean government.  (The Korean Ambassador 
later reiterated his government's position against the 
investment to the Ambassador.)  Bigger, more established 
Korean firms (Park mentioned Samsung) have no interest in 
entering the Ecuadorian market for lack of confidence in the 
government's commitment to rule of law. 
 
¶10. (C) Park served in Korea's consulate in San Francisco, 
California, and seemed eager to share his views, official and 
personal.  Park said Korea considered China to be a threat to 
Korea in all dimensions (economic, financial, military, 
etc.).  The GOK also finds the Venezuela/Cuba/Bolivia 
relationship troubling.  Dark horse presidential candidate 
Rafael Correa mystified Parks--"how could an academic 
economist be against open markets and the U.S.?"   Parks also 
implied some personal dissatisfaction with the current Korean 
president, whom he characterized as "too Leftist--less 
friendly to the U.S., too friendly to N. Korea, less 
supportive of open markets." 
 
Comment 
------- 
 
¶11.  (C) Our Asian counterparts were uniformly aware of and 
eager to build on A/S Shannon's outreach efforts to their 
capitals.  Each signaled respect for USG interests in Ecuador 
and more broadly in the region, and seemed reluctant to let 
energy sector competition compromise relations with us. 
Though reluctant to play a direct political role, the Asians 
disdained the growth of populist forces in the region, and 
share our interest in enhanced democratic stability based on 
rule of law.  We will maintain the dialogue to share 
perspectives and explore shared interests. 
JEWELL