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FM AMCONSUL SHANGHAI
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INFO RUEHBJ/AMEMBASSY BEIJING
RUEHCN/AMCONSUL CHENGDU 0298
RUEHGZ/AMCONSUL GUANGZHOU 0280
RUEHHK/AMCONSUL HONG KONG 0384
RUEHSH/AMCONSUL SHENYANG 0301
RUEHIN/AIT TAIPEI 0285
RUEHAST/USOFFICE ALMATY 0002
RUEHEK/AMEMBASSY BISHKEK 0002
RUEHDBU/AMEMBASSY DUSHANBE 0002
RUEHNT/AMEMBASSY TASHKENT 0002
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 5550

C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 007043 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM 
NSC FOR DENNIS WILDER 
 
E.O. 12958: DECL:  11/13/2016 
TAGS: PREL PGOV CH RS UZ TI KZ KG TX
SUBJECT: SHANGHAI SCHOLARS ON SCO AND RUSSIA 
 
REF: BEIJING 23353 
 
CLASSIFIED BY: Mary Tarnowka, Section Chief, Political/Economic 
Section, U.S. Consulate Shanghai. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (C) Summary:  In contrast to scholars in Beijing (Reftel), 
Shanghai SCO scholars told visiting EAP Poloffs in November 1-3 
meetings that is unlikely that the SCO will accept new members 
in 2007, especially Iran.  They expect China to continue to 
promote multilateral economic cooperation within the SCO and to 
favor economic cooperation as a means to promote regional 
stability in countries of concern, such as Afghanistan.  The 
scholars support more cooperation and dialogue between the 
United States and SCO, and one suggested that the United States 
and Japan become SCO partners.  They characterized the political 
relationship between Russia and China as "good", but "not as 
good as it should be."  End Summary. 
 
 
 
¶2.  (C) During their November 1-3 visit to Shanghai, EAP 
Political Officers Longenecker and Chernawsky, accompanied by 
Poloff, met with three of Shanghai's prominent Russia and SCO 
scholars: Shanghai Academy of Social Sciences (SASS) Institute 
of European and Asian Studies Director Pan Guang; Shanghai 
Institute of International Studies (SIIS) Russia-Central Asian 
Studies Director Lu Gang; and SIIS Research Management and 
International Exchanges Director Shao Yuqun. 
 
 
 
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No New SCO Members 
 
------------------ 
 
 
 
¶3.  (C)  In contrast to the views expressed by Beijing scholars 
reported reftel, the three Shanghai SCO scholars all believed it 
was unlikely that the SCO would accept any new members in 2007. 
Pan said that while the Secretariat General had been tasked with 
coming up with a mechanism for countries to become members, he 
thought that the mechanism would not be ready in time to allow 
new members in 2007.  He indicated that although it was clear 
Iran wanted good relations with Central Asia, Russia and China, 
several SCO members were uncomfortable with having Iran as a 
member.  Pan noted that Iran had joined the SCO as an observer 
before Ahmadinejad became President and before the nuclear 
crisis.  He said that several members of the SCO wanted neither 
for the SCO to become involved in the nuclear issue nor for it 
to provide Iran a platform.  He noted that there were also 
divisions within the SCO over membership for India and Pakistan. 
 Pan explained that there were currently no border disputes 
among SCO members, but many of the possible new partners had 
such issues. 
 
 
 
¶4.  (C) Lu and Shao noted that the SCO was a young organization 
that was still evolving.  Before it could accept any new 
members, existing members needed to decide what type of 
organization they wanted the SCO to be.  If the SCO accepted 
members outside of Central Asia, this could shift its regional 
focus.  Adding too many new members would dilute its 
effectiveness.  Shao said there were lots of regional 
organizations that did nothing more then hold meetings and talk. 
 He did not want to see that happen to the SCO. 
 
 
 
----------------------------------- 
 
SCO: Need More Economic Cooperation 
 
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SHANGHAI 00007043  002 OF 004 
 
 
 
 
 
¶5.  (C) Pan said that while the SCO has had successful 
cooperation on security, counterterrorism and border issues, so 
far, there had not been significant economic cooperation on the 
multilateral level.  If most economic cooperation remained on 
the bilateral level, then there was no need for the SCO.  He 
added that there was a possibility that Russia might join the 
Kazakh/China oil pipeline and that this could be the first joint 
economic project under  the SCO framework.  SIIS Lu Gang was 
more positive about economic cooperation.  He said that, from 
the Chinese Government's point of view, economic cooperation was 
the most important part of the SCO process and vital to 
maintaining security in the region.  China had initiated a USD 
900 million loan program to Central Asian entrepreneurs and 
provided economic training to 1,500 people from SCO Central 
Asian countries. 
 
 
 
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Continuing Concerns Over Regional Stability 
 
------------------------------------------- 
 
 
 
¶6.  (C)  The scholars were concerned about stability in the 
region, in particular in Afghanistan.  According to Pan, 
Afghanistan was not stable and China was concerned that this 
instability would negatively impact the situation in Xinjiang, 
which bordered Afghanistan.  Pan said he personally supported 
NATO's request that SCO members send peacekeeping troops to 
Afghanistan.  He noted that China had sent 1,000 peacekeepers to 
Lebanon at French President Chirac's request and commented that 
Afghanistan's stability was more directly in China's interest. 
Pan said that sending SCO peacekeepers would be "too 
complicated" and advocated a Chinese troop contribution as more 
realistic, but said that the Government was not seriously 
considering the idea.  Lu said China could not send troops to 
Afghanistan but could send resources.  He supported more 
cooperation between the United States and China on Afghanistan 
and suggested that both countries engage in a concrete area such 
as drug-trafficking. 
 
 
 
¶7.  (C) Shao said China was also concerned about stability in 
the five Central Asian countries.  According to Shao, most 
problems in the region stemmed from the fact that most of the 
current leaders had held power since the break-up of the Soviet 
Union and were unwilling to implement changes.  It was unlikely 
that there would be any significant political reform until there 
was a new generation of leaders.  She said that the current 
period was a transitional period, during which the region was at 
its most vulnerable state.  She said Kazakhstan was the most 
stable country in the region and the only one that had 
implemented significant economic reforms and joined the global 
economy.  While there was some friction in the relationship over 
oil resources and the pipeline, China had a cooperative 
relationship with Kazakhstan.  Shao 
 
also said noted the improved economic situation in Uzbekistan 
and said that this would improve stability in the country.  She 
said China was most concerned about Tajikistan and Kyrgyzstan. 
Kyrgyzstan's president continued to have problems in controlling 
the country and Tajikistan would have elections in the near 
future. 
 
 
 
--------------------------------------------- -- 
 
SCO: Welcome Cooperation From the United States 
 
--------------------------------------------- -- 
 
 
SHANGHAI 00007043  003 OF 004 
 
 
 
 
¶8.  (C) Lu stressed that the SCO was not an anti-American 
organization and was not being used by Russia and China as a 
platform to oppose the United States.  Pan had a similar 
viewpoint and added that the SCO and United States had common 
interests, especially on non-security issues such as health, 
environment and drug trafficking.  He added that most SCO 
countries supported good relations with the United States, with 
Uzbekistan an exception.  He added that the United States and 
Japan, which had expressed an interest in becoming an observer, 
could become SCO partners.  This would be similar to NATO's 
Partnership for Peace program which allowed some countries to 
cooperate and have a dialogue with NATO.  An SCO partner could 
have a liaison office at the SCO Secretariat, join military 
exercises as an observer, and conduct joint projects in areas 
such as poverty alleviation and combating drug trafficking. 
 
 
 
¶9.  (C) Shao and Lu said there should be more discussions 
between U.S., Chinese and Russian scholars about Central Asia. 
Shao noted that, in meetings with Chinese scholars,  Central 
Asian scholars always complained about the United States.  In 
their meetings with the United States, they  always complained 
about China.  To prevent themselves from being manipulated by 
the smaller countries, Russia, China and the United States 
should increase their own coordination.  Shao acknowledged that 
China was concerned about the U.S. presence in Central Asia. 
China was not only concerned about the color revolutions, but 
also the U.S. military base in Kyrgyzstan which was near the 
Chinese border.  China needed a clearer understanding of USG 
intentions toward Central Asia.  Shao was particularly 
interested in the USG's new Greater Central Asia Initiative. 
 
 
 
--------------------------------------------- ------ 
 
China-Russia: Relations Not As Good As It Should Be 
 
--------------------------------------------- ------ 
 
 
 
¶10.  (C) According to Pan, good China-Russia relations were in 
the interests of both countries.  The border between the two 
countries was over 7,000 km long and both countries benefited 
from bilateral energy and economic cooperation.  While there 
might be differences, the countries were always able to reach a 
compromise because they had common interests.  He added that he 
had seen a report that said most Chinese believed that, within 
the next ten years, Russia would not be a threat to China. 
(Note: Pan did not specify as to why Chinese people did not view 
Russia as a threat. End Note.)  However, there continued to be 
tensions between Russian and Chinese people.  Pan attributed 
this to the influx of Chinese laborers in the Russian Far East. 
Many Russians feared that China would take over the area if this 
trend continued. 
 
 
 
¶11.  (C) Lu and Shao had similar views.  They said that the 
overall political relationship between Russia and China was 
"good", but had not reached a "partnership" level.  The 
China-Russia relationship was not at the same level as the 
U.S.-British or even the U.S.-Japanese relationship.  In 
addition, President Hu and President Putin did not have close 
personal relations like President Bush and British Prime 
Minister Blair.  Shao said that, unlike past Chinese leaders, Hu 
did not speak Russian or have a deep understanding of Russian 
issues.  She added that President Putin also did not have a deep 
understanding of China.  Like Pan, she thought that the 
relationship on the people-to-people level was not as good as it 
should be.  In addition to the tensions caused by Russian 
concerns about Chinese laborers in the Russian Far East, there 
were also concerns about the lack of energy cooperation.  She 
noted that Russia, to some extent, saw a rising China as a 
threat.  She added that the relationship was also affected by 
 
SHANGHAI 00007043  004 OF 004 
 
 
each country's relationship with the United States.  The 
deterioration of U.S.-Russian relations had allowed China to 
establish a closer relationship with Russia.  Shao was not 
certain the two countries would have such a close relationship 
if U.S.-Russia relations improved. 
 
 
 
¶12.  (C) According to the scholars, both PRC and Russian leaders 
were actively engaged in efforts to promote better relations 
between the peoples of their two countries.  For example, China 
had designated 2006 as "the year of Russia" and Russia had 
designated 2007 as "the year of China."  The scholars hoped that 
such programs would increase trust between the two countries and 
lead to greater cooperation on Central Asia and other issues. 
They noted that Shanghai was contributing to this effort by 
investing USD 1.3 billion in a luxury real estate project in St. 
Petersburg.  All three scholars noted that the project was very 
controversial, but that it was supported by the mayor of St. 
Petersburg who was a close friend of President Putin. 
 
 
 
¶13.  (C) EAP Political Officer Sam Chernawsky cleared this 
report. 
JARRETT