VZCZCXYZ0001
OO RUEHWEB

DE RUEHBJA #8542 2441012
ZNY CCCCC ZZH ZUI RUEWCSE2349 2441319
O 011012Z SEP 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 0000
INFO ZEN/RUCNASE/ASEAN MEMBER COLLECTIVE
CHINA POSTS COLLECTIVE
RUEKJCS/SECDEF WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEHBS/USEU BRUSSELS
RUCNDT/USMISSION USUN NEW YORK

C O N F I D E N T I A L BEIJING 018542 
 
SIPDIS 
 
SIPDIS 
 
 
 
STATE FOR EAP, EAP/RPM, EAP/CM 
 
E.O. 12958: DECL: 08/31/2016 
TAGS: PREL ECIN ETRD XE JA CH
SUBJECT: CHINA CAUTIOUS ON ASEAN+6 TRADE PROPOSALS 
 
REF: BEIJING 9501 
 
CLASSIFIED BY: POLITICAL MINISTER COUNSELOR DANIEL 
SHIELDS.  REASONS 1.4 (B/D). 
 
¶1.  (C) SUMMARY: CHINA IS REACTING CAUTIOUSLY TO 
JAPAN'S PROPOSALS FOR AN ASEAN 6 FREE TRADE AGREEMENT 
AND OTHER EFFORTS TO INCREASE REGIONAL INTEGRATION. 
FURTHER DECISIONS ON SUCH STEPS COULD COME AT 
DECEMBER'S EAST ASIAN SUMMIT, BUT CHINA WILL CONTINUE 
TO LET ASEAN TAKE THE LEAD, FOREIGN MINISTRY OFFICIALS 
TOLD US.  OUR CONTACTS PREDICT THAT CHINA WILL NOT 
REACT PUBLICLY BUT MAY RESIST WHAT THEY SEE AS JAPAN'S 
EFFORTS TO FORMALIZE AN ASEAN 6, WHICH WOULD BE THE 
EAST ASIAN GROUPING MOST FAVORABLE TO JAPAN'S 
INTERESTS.  END SUMMARY. 
 
¶2. (C) CHINA IS CAUTIOUSLY STUDYING PROPOSALS PUT 
FORWARD BY JAPAN AT LAST WEEK'S ASEAN ECONOMIC 
MINISTERS MEETING FOR AN ASEAN 6 FREE TRADE AGREEMENT 
AND A NEW OECD-LIKE REGIONAL GROUPING.  CHINA IS 
STUDYING HOW JAPAN'S NEW PROPOSALS INTERACT WITH AND 
OVERLAP WITH PREEXISTING REGIONAL ARCHITECTURE, MFA 
 
ASIAN DEPARTMENT ASEAN DIVISION DEPUTY DIRECTOR ZHU 
JUN TOLD POLOFF AUGUST 28.  A FURTHER STATEMENT OF 
CHINA'S POSITION WILL LIKELY AWAIT STATEMENTS BY 
LEADERS AT DECEMBER'S EAST ASIA SUMMIT (EAS) BECAUSE 
THE EAS "LEADERS-LED FORUM" IS THE PREEXISTING ASEAN 6 
STRUCTURE, SHE SAID. 
 
"WHAT'S UNIQUE ABOUT ASEAN 6"? 
------------------------------ 
 
¶3. (C) WHILE MAINTAINING AN OPEN MIND, CHINAS 
PRELIMINARY VIEW IS THAT ASEAN 6 SHOULD NOT DUPLICATE 
PRE-EXISTING GROUPINGS, SUCH AS APEC, ASEAN, ASEAN 3 
OR THE ASIA-EUROPE MEETING (ASEM), ZHU SAID.  JAPAN 
CLEARLY ATTACHES IMPORTANCE TO THE EAS AND THE NEW 
PROPOSALS ARE PART OF AN EFFORT TO EXPAND THE 
IMPORTANCE OF ASEAN 6, SHE SAID.  CHINA HAS NO 
INTENTION TO CRITICIZE JAPAN FOR EMPHASIZING A 
REGIONAL GROUPING THAT BENEFITS ITS INTERESTS, SHE 
SAID, BUT NEEDS TO RESEARCH THE PROPOSALS TO SEE HOW 
FEASIBLE THEY ARE. 
 
¶4. (C) MFA ASIAN DEPARTMENT SOUTHEAST ASIA DIVISION 
DIRECTOR CHEN DEHAI TOLD POLOFF THAT FORMATION OF AN 
ASEAN ECONOMIC COMMUNITY WILL BE CHALLENGING BECAUSE, 
UNLIKE IN THE EUROPEAN UNION, THE CULTURES, ECONOMIES 
AND INTERESTS OF ASEAN 3 MEMBER STATES DIFFER 
SIGNIFICANTLY.  ZHU AGREED, ADDING THAT WIDE VARIATION 
IN ECONOMIC DEVELOPMENT AMONG THE ASEAN 6 COUNTRIES 
COULD MAKE AN FTA "TECHNICALLY DIFFICULT."  MOREOVER, 
CHINA, JAPAN AND SOUTH KOREA ARE EACH PURSUING THEIR 
OWN ASEAN 1 AGENDAS, INCLUDING FREE TRADE AGREEMENTS, 
CHEN ADDED (REFTEL).  CHINA HOPES TO FURTHER ITS OWN 
SPECIAL RELATIONSHIP WITH ASEAN IN OCTOBER, WHEN ASEAN 
HEADS OF STATE VISIT SOUTHERN CHINA'S GUANGXI PROVINCE 
FOR A COMMEMORATION OF THE 15TH ANNIVERSARY OF CHINA- 
ASEAN RELATIONS, CHEN NOTED. 
 
CHINA LETTING ASEAN TAKE THE LEAD IN EAST ASIAN SUMMIT 
--------------------------------------------- --------- 
 
¶5. (C) CHINA'S ATTITUDE TOWARD THE COMING EAST ASIAN 
SUMMIT IS SUMMARIZED IN FOUR POINTS, ZHU ADDED. 
FIRST, CHINA WILL LET ASEAN PLAY A LEADING ROLE.  THIS 
IS IMPORTANT TO CONTRIBUTING TO A STABLE ENVIRONMENT 
WITHOUT CHINA'S DOMINATION OF THE PROCESS, WHICH WOULD 
PRODUCE RESISTANCE, SHE SAID. SECOND, CHINA WILL 
MAINTAIN A FLEXIBLE AND OPEN ATTITUDE AND URGE THE EAS 
TO LEARN FROM OTHERS' EXPERIENCES.  THIRD, THE SUMMIT 
SHOULD ADHERE TO THE TWO DECLARATIONS ADOPTED LAST 
YEAR AT THE FIRST EAS SUMMIT.  FINALLY, CHINA IS 
FLEXIBLE ABOUT PARTICIPATION BY OTHER NATIONS THAT 
HAVE SHOWN AN INTEREST.  CHINA DOES NOT OPPOSE THE 
UNITED STATES OR THE EUROPEAN UNION BECOMING OBSERVERS 
AT THE EAS AND JOINING IN MINISTERIAL MEETINGS AND IT 
SUPPORTS RUSSIA'S APPLICATION TO PARTICIPATE AT THE 
EAS, SHE SAID. 
 
SCHOLAR: ASEAN 6 IS JAPAN'S PREFERRED ARCHITECTURE 
--------------------------------------------- ----- 
 
¶6. (C) JAPAN'S PROPOSALS TO ESTABLISH AN EAST ASIA 
PARTNERSHIP AGREEMENT, INCLUDING A FREE TRADE ZONE, 
ARE PART OF A JAPANESE EFFORT TO FIND A REGIONAL 
ORGANIZATION IT CAN LEAD, CHINA ACADEMY OF SOCIAL 
SCIENCES SCHOLAR JIN XIDE TOLD POLOFF.  ASEAN 6 IS THE 
IDEAL GROUPING FOR JAPAN WITHIN EAST ASIA AND 
PROPOSALS THAT EMPHASIZE FREE TRADE ISSUES PLAY TO 
JAPAN'S STRENGTHS, HE SAID.  CHINA'S PEOPLE'S DAILY 
EDITORIALIZED AUGUST 26 THAT JAPAN IS EAGER TO 
ESTABLISH A FREE TRADE AGREEMENT TO MAINTAIN ITS 
DOMINANT POSITION IN EAST ASIA.  THE EDITORIAL SAID 
JAPAN WAS "SCRAMBLING" TO CONTAIN CHINA AND SOUTH 
KOREA AND TO RESTRICT ASEAN BY ADDING THREE NEW 
MEMBERS TO THE EAST ASIAN GROUPING TO ADVANCE ITS OWN 
INTERESTS. 
 
¶7. (C) JIN PREDICTED THAT CHINA WILL TAKE A "WAIT AND 
SEE" ATTITUDE TOWARD THE LATEST PROPOSALS BECAUSE IT 
DOES NOT THINK ASEAN MEMBERS WILL AGREE TO THEM. 
"WHATEVER CHINA SAYS, IT WILL LEAVE EITHER JAPAN OR 
ASEAN UNHAPPY," JIN CONCLUDED.  THE PEOPLE'S DAILY WAS 
MORE BLUNT, SAYING THAT CHINA AND ASEAN WOULD OPPOSE 
THE 10 6 MODEL AGAIN, AS THEY HAVE IN THE PAST, TO 
THWART WHAT IT CALLED A JAPANESE POLITICAL AGENDA THAT 
"INCREASES THE CONCERNS OF EAST ASIAN COUNTRIES." 
 
SEDNEY