VZCZCXRO6021
RR RUEHPB
DE RUEHWL #0536/01 1930329
ZNY CCCCC ZZH
R 120329Z JUL 06
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 3020
INFO RUEHBJ/AMEMBASSY BEIJING 0311
RUEHBY/AMEMBASSY CANBERRA 4474
RUEHPB/AMEMBASSY PORT MORESBY 0586
RUEHSV/AMEMBASSY SUVA 0486
RUEHKO/AMEMBASSY TOKYO 0600
RHHMUNA/CDR USPACOM HONOLULU HI
RUEHIN/AIT TAIPEI 0066
RHHJJAA/JICPAC HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 03 WELLINGTON 000536 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EAP/FO, EAP/ANP AND EAP/CM 
PACOM FOR JO1E/J2/J233/J5/SJFHQ 
 
E.O. 12958: DECL: 07/11/2016 
TAGS: PREL NZ CH XV
SUBJECT: CHINESE/NEW ZEALAND TALKS ON PACIFIC ISLAND ISSUES 
 
REF: A. WELLINGTON 462 
     ¶B. WELLINGTON 451 
 
(U) Classified By: Acting Deputy Chief of Mission Katherine 
¶B. Hadda, for reasons 1.4 (b) and (d) 
 
Summary 
------- 
¶1. (C) As part of a first round of New Zealand-China Pacific 
Consultations, PRC's Assistant Minister of Foreign Affairs He 
Yafei visited New Zealand in June.  According to New 
Zealand's Ministry of Foreign Affairs (MFAT), He said China 
recognizes New Zealand's "very important" role in the Pacific 
region, wants to coordinate its efforts in the region with 
GNZ at the policy level, and supports the Pacific Plan. 
There was frank discussion "between friends" on the 
China-Taiwan rivalry in the region, which MFAT says will 
continue to complicate its future engagement with China in 
the South Pacific.  End summary. 
 
¶2. (C) As part of a five-country tour of the South Pacific 
(Australia, Cook Islands, Samoa, New Zealand, Fiji), He 
Yafei, one of three Assistant Ministers of Foreign Affairs of 
the People's Republic of China, visited New Zealand from June 
20 to 22.  The visit was a follow-up to the visit of Premier 
Wen Jiabao to the region in early April, and involved 
consultation on bilateral, Asian region and Pacific region 
issues.  MFAT says AFM He's meeting with Alan Williams, 
Deputy Secretary at MFAT, and other GNZ officials focused on 
China's Pacific Island foreign and aid policy objectives and 
included frank discussion about China's and Taiwan's role in 
the Pacific. 
 
China's Pacific Island foreign and aid policy 
--------------------------------------------- 
¶3. (C) AFM He characterized China's policy in the Pacific as 
promoting regional coherence and economically and 
socially-sustainable development.  As a developing country, 
China understands the difficulties that Pacific Island 
countries (PICs) face, which are similar to its own, He said. 
 MFAT says He took note of the Pacific Plan objectives, and 
recalled China's 2005 commitment to give USD 1.25 million in 
2006 and 2007 to Pacific Plan programs.  Chinese aid focuses 
on projects that positively affect peoples' daily lives, such 
as infrastructure and public facilities, he said.  In 
addition to a number of high-profile projects, there are many 
smaller ones, involving agriculture, hydroelectricity and 
solar energy.  Generally the recipient governments are 
responsible for identifying project proposals.  Chinese 
companies usually carry out the contract work. 
 
¶4. (C) He said China had announced its commitment to the five 
main areas of cooperation agreed to at the China-Pacific 
Islands Economic and Development Forum in April: trade and 
investment; agriculture, forestry and fish; tourism; 
transportation; and capacity building. The PRC also announced 
3 billion yuan (USD 375 million) in soft loans for PICs over 
the next three years and committed to train 2,000 people, 
including government officials and those involved in economic 
sectors such as energy, telecommunications, fisheries and 
health.  These programs will cover all Pacific Island Forum 
(PIF) members, whether or not they have diplomatic relations 
with China.  In November, China's Ministry of Foreign Affairs 
will hold a second training program for PIC diplomats 
(approximately 2-3 per country) and a training program in 
China for Pacific journalists.  China is willing to 
coordinate aid efforts on a policy level with New Zealand, 
said He, who added that cooperation at the project level 
would be too difficult. 
 
¶5. (C) The NZAID rep at the meeting told He that GNZ has 
increased its aid resources to the Pacific by 45% over the 
last three years (including tripling aid to Papua New Guinea, 
the Solomon Islands and Vanuatu).  GNZ allocates 55% of its 
overseas development assistance to the Pacific (Ref A). 
Deputy Secretary Williams told He that Pacific Plan 
objectives will only be reached if the partners in the region 
work together.  AFM He said China was open to coordinating 
with other donors and making programs more complementary. 
 
China and Taiwan in the South Pacific: It's All "Their" Fault 
--------------------------------------------- ---------------- 
 
WELLINGTON 00000536  002 OF 003 
 
 
¶6. (C) AFM He warned of the "dangers of Taiwan dollar 
diplomacy," saying that "Taiwan was very much into 
corruption" and alleging that Taiwanese bribery in the 
Solomon Islands was a major reason behind recent unrest.  He 
cited an example from Vanuatu, where Taiwan allegedly asked 
Prime Minister Vohor to forge signatures to bring about a 
vote of no confidence.  He claimed Taiwan officials had also 
invited Micronesia's Speaker to Taiwan to try to influence 
him.  AFM He also brought up the summit that Taiwan plans to 
hold with PICs in September 2006, to which he claimed New 
Zealand and Australia would be invited.  (FYI: MFAT tells us 
GNZ has not received an invitation.  End FYI.) 
 
¶7. (C) Williams reiterated that GNZ's One China policy is 
deeply embedded, but observed that the China-Taiwan issue 
could have negative connotations for the region.  Reinforcing 
the message delivered by NZ Foreign Minister Winston Peters 
the day prior, Williams added that New Zealand does not tell 
PICs what to do as they are sovereign nations that make their 
own decisions.  GNZ does tell the PICs to identify where 
their long-term interests lie, however.  Williams told He 
that at an informal retreat held at last year's meeting of 
the Forum Regional Security Committee in Auckland, senior PIC 
officials said some PIC ministers felt there was advantage to 
playing China and Taiwan off each other. 
 
¶8. (C) MFAT says He claimed this was "very unfortunate" and 
misguided, but said the Taiwan issue is a test China applies 
to its foreign relations that provides the political basis 
for long-term relations.  If PICs believed that they could 
gain more money by exploiting the sensitivity of the issue, 
they would be mistaken.  Everything would be off the table. 
One of He's delegation added that smaller countries were 
"easier to buy off" through putting money in leaders' 
pockets, and claimed Taiwan had used checkbook diplomacy to 
keep nations such as the Solomon Islands in the fold. 
 
¶9. (C) Williams told He there is an association between small 
states and weak governance.  Some PICs were even facing a 
question of whether they could remain viable as nation 
states.  Williams explained to the PRC side that New Zealand 
is starting to make more use of trust funds under the control 
of boards in New Zealand.  NZAID told He that the PICs which 
recognize Taiwan, with the exception of Palau, suffer from 
the poorest governance, least stability, and weakest economic 
outlook in the region. 
 
¶10. (C) According to MFAT, He told Williams that while China 
is patient on the Solomon Islands and the question of 
diplomatic relations, it hopes that New Zealand "would tell 
the (Solomon Islands), as you do others" that its was in 
their long-term interest to develop relations with the PRC 
rather than the province of Taiwan.  Williams responded that 
building quality governance is essential, but that NZ would 
continue to be guided by the principle that it is up to the 
PICs to make the sovereign choice about whether to recognize 
the PRC. 
 
Comment 
------- 
¶11. (C) MFAT believes that the Chinese are genuinely 
interested in increased interaction with New Zealand on 
Pacific policy.  They say a second round of consultations is 
planned for Beijing, either in conjunction with New 
Zealand-China Foreign Ministry Consultations in November 2006 
or separately in early 2007.  MFAT sees the Taiwan issue as 
the predominant force behind China's involvement in the 
region.  MFAT further believes that China is looking to New 
Zealand to play a more active role in reducing Taiwanese 
influence in the region.  In MFAT's view, this expectation is 
likely to complicate the bilateral relationship between New 
Zealand and China, and potentially GNZ ties to the PICs as 
well. 
 
¶12. (C) MFAT also says that GNZ will continue to deliver the 
message to China, PICs and others that development partners 
need to work in coherent tandem toward quality, long-term 
governance and development outcomes.  MFAT will also continue 
its dialogues with other large regional partners, such as its 
recent meetings with Emboffs and heads of mission from 
France's Pacific posts (Ref B).  MFAT is also speaking to 
Taiwan about the implication of the island's assistance to 
 
WELLINGTON 00000536  003 OF 003 
 
 
the Pacific.  NZAID's Pacific Group Director, Craig Hawke, 
went to Taipei two weeks ago to deliver "a stern message," 
according to MFAT.  End comment. 
McCormick