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RUEKJCS/SECDEF WASHINGTON DC
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RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 020223 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 09/22/2026 
TAGS: PREL PINR XD AF NP IN PK CH
SUBJECT: DDG LUO ON CHINA-SOUTH ASIA DEVELOPMENTS 
 
REF: STATE 151705 
 
Classified By: Political Minister Counselor Daniel Shields.  Reasons 1. 
4 (b/d). 
 
¶1. (C) Summary: China remains concerned about 
instability in Nepal, MFA Asia Department Deputy 
Director General Luo Zhaohui told Polmincouns in a 
September 22 discussion of China-South Asia issues. 
China continues to avoid contact with the Maoists in 
Nepal and wonders what role the UN could play in 
Nepal.  President Hu Jintao will visit India and 
Pakistan in November.  China appreciates the efforts 
the USG has made, including A/S Boucher's viit to 
China for the South and Central Asia Sudialogue, to 
promote U.S.-China cooperationon South Asia.  Luo 
confirmed press reports that popular sentiment 
critical of the Government of Pakistan has turned 
into anti-Chinese sentiment in parts of Pakistan 
including Baluchistan.  Luo expects to be sent out as 
China's Ambassador to Pakistan soon.  End Summary. 
 
Continuing Instability in Nepal 
------------------------------- 
 
¶2. (C) China sees three potential sources of 
instability in Nepal, DDG Luo Zhaohui told 
Polmincouns on September 22: 1) uncertainty over the 
future of the monarchy, 2) the health of Prime 
Minister Koirala and 3) the role of the "so-called 
Maoists."  Prime Minister Koirala is calling for the 
monarchy to retain a ceremonial role in the country. 
Regarding PM Koirala's health, Luo expressed surprise 
over how healthy the PM has appeared since July, when 
VFM Wu Dawei visited Nepal.  Luo, stressing that this 
is a personal opinion, speculated that PM Koirala may 
have played up his genuine health problems early in 
his tenure as PM in order to lower political 
expectations and create room to maneuver. 
 
¶3. (C) Luo said the key question remains whether the 
Maoists will consent to arms management before there 
is a political deal.  China's policy towards the 
Maoists has not changed, with China avoiding 
contacts.  Chinese scholar Wang Hongwei, who met with 
Maoists earlier this year, did so in his capacity as 
adviser to a Chinese company, Luo said.  Wang is a 
retired professor and had not asked the Chinese 
Government for permission to hold the meeting, Luo 
stated.  Polmincouns stressed that all parties should 
avoid legitimizing the Maoists in any way while the 
Maoists refuse to consent to arms management. 
 
¶4. (C) China is reviewing its attitude about the role 
of the UN in Nepal, according to Division Director 
Huang Xilian, who accompanied Luo.  Huang asked about 
the USG view on the UN's role in Nepal and whether 
the UN can help deal with the Maoist issue. 
Polmincouns said the USG will focus on doing what is 
necessary to help ensure the success of the 
Government of Nepal.  He indicated he would report to 
Washington Luo's query regarding USG thinking on the 
appropriate role for the UN in Nepal. 
 
Noninterference Policy Tested in Nepal 
-------------------------------------- 
 
¶5. (C) Luo acknowledged the tension between China's 
longstanding policy of noninterference in the 
 
BEIJING 00020223  002 OF 003 
 
 
internal affairs of other countries and its interest 
in maintaining stability.  Such tensions affect 
Chinese policy in Nepal, he said, where China has a 
strong interest in maintaining stability because of 
the 1400 kilometer-long border, illegal migration 
across the border and issues involving Nepal and 
Tibet.  Polmincouns urged that China step up its 
efforts to act as a responsible stakeholder in its 
interactions with countries like Nepal that find 
themselves undergoing difficult political 
transitions. 
 
President Hu to South Asia in November 
-------------------------------------- 
 
¶6. (C) President Hu will travel to South Asia in 
November after he attends the APEC Leaders' Meeting 
in Hanoi, Luo said.  Hu will first visit India and 
then travel to Pakistan, where he expects to sign a 
joint statement addressing political issues, economic 
cooperation and border concerns.  Luo will travel to 
the region soon for consultations in preparation for 
the Hu visit.  China and India will hold a Directors 
General-level dialogue soon that will focus on 
counterterrorism issues.  Luo asked if President Bush 
plans to visit South Asia in connection with possible 
travel to the APEC Leaders Meeting in Hanoi in 
November.  Polmincouns said he would report the 
question to Washington.  Luo said China appreciates 
the efforts the USG has made, including A/S Boucher's 
visit to China for the South and Central Asia 
Subdialogue, to promote U.S.-China cooperation on 
South Asia.  Polmincouns said the USG also 
appreciates China's efforts in this area. 
 
India, Pakistan and Nuclear Cooperation 
-------------------------------------- 
 
¶7. (C) China has concerns about U.S.-India civil 
nuclear cooperation, Luo said.  Chinese scholars 
question whether the U.S. position on 
nonproliferation has changed, with some suggesting 
that civil nuclear cooperation with India is 
inconsistent with the U.S. position towards Iran and 
the DPRK.  Polmincouns emphasized India's good 
historical record on nonproliferation issues as a 
reason for treating India differently. 
 
¶8. (C) U.S.-India civil nuclear cooperation is of 
concern to Pakistan, Luo said, and this makes the 
already sensitive India-Pakistan relationship even 
more delicate.  He urged the United States to treat 
Pakistan and India more evenhandedly and not to 
follow India's lead.  The USG should take action to 
help calm the situation between India and Pakistan, 
he suggested.   Polmincouns said the United States 
respectfully considers India's views, but decides 
policy on the basis of U.S. interests and values. 
 
Anti-Chinese Sentiment in Pakistan? 
----------------------------------- 
 
¶9. (C) Luo confirmed press reports that popular 
sentiment critical of the Government of Pakistan has 
turned into anti-Chinese sentiment in parts of 
Pakistan including Baluchistan.  Local extremists who 
have a dispute with the Central Government of 
Pakistan about development of the local economy also 
harbor anti-Chinese views, given the close links 
 
BEIJING 00020223  003 OF 003 
 
 
between Beijing and Islamabad.  China wants to avoid 
having its citizens become victims of violence. 
China urges the Government of Pakistan to protect 
Chinese citizens, many of whom are working on 
infrastructure projects in difficult areas, and urges 
Chinese companies to be cautious.  China appreciated 
being invited to the September 18 meeting (reftel) in 
Singapore regarding development of Pakistan's 
Federally Administered Tribal Areas region. 
 
Chinese Assistance to Afghanistan 
--------------------------------- 
 
¶10. (C) China's assistance programs in Afghanistan 
are mostly proceeding well, Luo said.  A newly 
renovated Chinese-supported hospital in Kabul will 
open next month, he stated. 
 
Luo to be China's Next Ambassador to Pakistan 
--------------------------------------------- 
 
¶11. (C) Luo said he expects to be sent out soon as 
China's Ambassador to Pakistan.  Both Luo and his 
wife, who began serving as Political Counselor at the 
Chinese Embassy in Bangkok two months ago, were 
scholars of South Asian affairs before they jointed 
the MFA.  Luo has previously served in India and in 
the United States, but his posting to Islamabad will 
be his first in Pakistan.  He said he looks forward 
to good cooperation with Ambassador Crocker. 
RANDT