VZCZCXRO8308
PP RUEHCN RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHVC
DE RUEHBJ #0346/01 0160635
ZNR UUUUU ZZH
P 160635Z JAN 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 3844
INFO RUEHZN/SCIENCE COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUCPDC/NOAA NMFS WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 08 BEIJING 000346 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR OES/WATSON, OES/EGC-DEROSA-JOYNT AND OES/PCI 
STATE FOR EAP/CM - WARD 
STATE PASS TO CEQ CONNAUGHTON AND BANKS 
NSC FOR HUNTER, SHRIER, TONG 
USDOE FOR INTERNATIONAL/HARBERT, PUMPHREY AND GEBERT 
EPA FOR INTERNATIONAL/MCASKILL AND AYRIS 
 
E.O.  12958: N/A 
TAGS: ENRG ECON TRGY PREL OVIP CH
SUBJECT:  ENERGY SECRETARY BODMAN'S MEETING WITH NDRC 
CHAIRMAN MA KAI AND MOST MINISTER XU GUANHUA; U.S. - CHINA 
ENERGY EFFICIENCY AND RENEWABLE ENERGY PROTOCOL SIGNED 
 
 
¶1. (SBU) Summary.  China views the sustainability of its 
economic growth to rest on its domestic economy, with trade 
only recently becoming a more significant factor.  Future 
cooperation on renewable energy, energy efficiency, and 
nuclear power will be the focus of post-Strategic Economic 
Dialogue (SED) I activities, with possible integration of 
SED action items with activities under the DOE ' National 
Development and Reform Commission (NDRC) Energy Policy 
Dialogue (EPD).  NDRC Chairman MA Kai wants both nations to 
focus on specific energy efficiency and alternative energy 
technologies.  He views technology transfer in those areas 
as having great potential toward reducing the trade 
imbalance between the two countries, thus not posing a 
threat to U.S. national security.  MA proposes to organize 
a meeting in 2007 to exchange views on specific mature 
energy technology transfers in the areas of environmental 
protection and energy savings, with a focus on producing 
tangible results. 
 
Ministry of Science and Technology (MOST) Minister Xu 
Guanhua sees a link between the action agenda developed 
during  the Joint Commission Meeting (JCM) and the post-SED 
agenda, noting the common interests of the United States 
and China on clean energy and environmental technology.  Xu 
would like to see expanded cooperation in those areas with 
a forum for technical discussions in a smaller setting. 
China currently has 9 million cars on the road.  By 2030, 
China will have 100 million vehicles, thus the pressure on 
the environment and the demand for fuel will be great Xu 
noted.  MOST is interested in knowing more about United 
States hydrogen policy. 
 
Secretary Bodman and MOST Minister Xu executed the newly 
 
SIPDIS 
negotiated 'Protocol between the Department of Energy of 
the United States of America and the Ministry of Science 
and Technology of the People's Republic of China for 
Cooperation in the Fields of Energy Efficiency and 
Renewable Energy Technology and Development and 
Utilization.'  End Summary. 
 
DOE, NDRC, and MOST Working Lunch 
------------------ 
 
¶2. (SBU) The lunch meeting among Secretary of Energy 
Bodman, NDRC Chairman Ma Kai, and Minister Xu Guanhua, 
Ministry of Science and Technology convened at the Great 
Hall of the People on Friday, December 15, 2006 immediately 
after the last formal session of the SED.  NDRC Chairman Ma 
began the lunch meeting by soliciting Secretary Bodman's 
views of the Dialogue.  The Secretary termed the SED 
effective and indicative of an increased level of 
communication and friendship between the two countries. 
 
Differences in U.S.-China SED Presentations 
------------------- 
 
¶3. (SBU) One noticeable difference was the conclusions 
reached from the statistics each country used during the 
SED presentations, Secretary Bodman stated.  The Secretary 
remarked that Chairman MA emphasized the importance of 
China's domestic economy to sustain economic growth, while 
giving less importance to China's export economy.  From the 
United States point of view, the Secretary observed, the 
focus of China's economy is on manufacturing for exports. 
However, he continued, the analytical focus in China's 
December 14 SED presentation seemed to reflect the reverse. 
The Secretary was therefore curious about the basis for the 
statistical analyses Chairman MA was using, as this was one 
of the few differences he noted during the SED.  The 
Secretary based his remarks on statistics from the Energy 
 
SIPDIS 
Information Agency, and he wondered about the origin of the 
Chairman's analysis. 
 
NDRC Chairman's Perspective 
--------------------------- 
 
 
BEIJING 00000346  002 OF 008 
 
 
¶4. (SBU) Chairman Ma stated that China's 1.3 billion 
population was too big a number for China to focus only on 
the world economy as a basis for sustainable economic 
growth.  During most of the years in which the exports 
resulted in a trade surplus, the resulting surplus ranged 
between 1 ' 2% of China's total economy, he explained.  It 
is only in the last few years that the export surplus has 
become a significant factor, he concluded.  He stated that 
he used statistics from the energy statistical data 
published by British Petroleum and the International Energy 
Agency, both well respected sources of energy statistics. 
While the use of statistical data to inform analysis is an 
issue worth exploring for further mutual understanding, the 
Secretary stressed that the past is less important, and it 
 
SIPDIS 
is more fruitful to focus on what we can do in the future. 
 
SED Follow-Up:  Energy, Environment and Sustainable 
Development 
---------------------- 
 
¶5. (SBU) As a follow-up to the additional SED 
presentations on December 15, Chairman MA asked the 
Secretary's views of the proposals made.  Secretary Bodman 
 
SIPDIS 
responded that the ideas for future cooperation were good, 
and that the first step was to have the technical people 
responsible for working on renewable energy, energy 
efficiency, and nuclear power meet and share views on the 
status of what each country is doing.  Noting that in some 
areas China is more advanced that the United States, the 
technical exchange would permit each country to benefit 
from the other.  DOE Assistant Secretary for Policy and 
International Affairs Karen Harbert opined that the Energy 
Policy Dialogue (EPD) is a good place for the initiatives 
to reside.  Harbert also stated that many of these areas 
were identified as priorities during the second EPD, which 
China recently hosted, i.e., energy efficiency, clean coal 
technologies, finding ways to assist China with energy 
conservation strategies and tools.  Secretary Bodman took 
the occasion to comment on his regard for the great 
technological expertise that resides in China, and his 
desire not to have the United States preach to China, but 
to listen and understand where the challenges for both 
countries are after the experts have had an opportunity to 
exchange views. 
 
Clean Energy and Energy Efficiency Cooperation - Bringing 
Balance to Bilateral Trade without Threatening U.S. 
National Security 
---------------------- 
 
¶6.  (SBU)  Chairman MA agreed with Secretary Bodman's 
approach, but stated his desire to focus on specific 
projects that the two countries can jointly develop.  He 
stated that, unlike China's one-time purchases of 
particular United States goods such as airplanes, United 
States clean, energy efficient, and alternative energy 
technologies have great potential toward reducing the trade 
imbalance between the two countries.  Cooperation in these 
areas, does not pose a threat to the national security of 
the United States.  Therefore, MA proposed to organize a 
meeting in 2007 to exchange views on specific mature energy 
technology transfers in the areas of environmental 
protection and energy savings.  The meeting would involve 
other agencies and sectors working in these reas, such as 
MOST, with whom DOE already has close cooperation and 
Chinese industry.  NDRC is working on ten major energy 
conservation initiatives, MA proposes that the United 
States and China select two or three projects every year as 
the subject of their cooperation, so that the cooperation 
does not stop when the policy dialogue ends, but will 
continue to achieve substantive results.  NDRC Vice 
Chairman ZHANG Xiaoqiang suggested that the energy 
conservation project involve the 1000 largest, energy- 
consuming enterprises in China and similar United States 
companies. 
 
 
BEIJING 00000346  003 OF 008 
 
 
MOST Minister XU links SED next steps to JCM next steps 
----------------------- 
 
¶7.  (SBU)  MOST Minister XU Guanhua began his session of 
the meeting by recalling the October, 2006 visit of Dr. 
John H. Marlburger III, Science Advisor to the President of 
the United States and Director of the Office of Science and 
Technology Policy, during the China-United States Joint 
Commission Meeting on Scientific and Technical Cooperation 
(JCM).  The JCM resulted in a resolution to expand 
cooperation in the areas of clean energy and environmental 
technology, XU stated.  Affirming the common interest 
between the two countries in these areas, Minister XU noted 
the great opportunities and challenges that exist for both 
sides.  He too would like to see the cooperation expanded; 
he thinks existing mechanisms for the cooperation are 
available; and he would like to see a forum for technical 
discussions in a smaller setting. 
 
¶8. (SBU) Secretary Bodman once again noted the advantages 
of further technical discussions and the importance of 
engaging the people who are actually doing the work.  He 
stated that A/S Harbert would be in charge of organizing 
the United States side of the cooperation.  A/S Harbert 
noted the importance of involving the private sector, 
noting that record levels of venture capital is being 
invested in energy saving technology in the United States. 
She would like to explore private sector participation in 
the cooperation. 
 
Energy Solution for Transportation Needs Tops MOST's 
Technology Agenda 
-------------------- 
 
¶9. (SBU) MOST is engaged in many international automobile 
technology cooperation projects with a view to future 
commercialization.  Minister Xu stated that China currently 
has 9 million cars on the road.  By 2030, there will be 100 
million vehicles, thus the pressure on the environment and 
the demand for fuel will be great.  Secretary Bodman agreed 
that the energy demand for the transportation sector was a 
major concern for the United States.  XU mentioned hydrogen 
as a possible alternative fuel, and he would like to know 
more about the United States policy for hydrogen and how to 
encourage people to use it.  Bodman stated that the United 
States has not figured out what the best solution is, but 
it that it appeared as if biodiesel fuels are showing 
promise. 
 
Signing Ceremony for the U.S. - China Energy Efficiency and 
Renewable Energy Protocol 
------------------------- 
 
¶10. (SBU) Immediately following the lunch, Secretary 
Bodman and MOST Minister XU executed the newly negotiated 
'Protocol between the Department of Energy of the United 
States of America and the Ministry of Science and 
Technology of the People's Republic of China for 
Cooperation in the Fields of Energy Efficiency and 
Renewable Energy Technology and Development and 
Utilization': 
 
¶11. (U) The text of the Protocol follows: 
 
Begin Text: 
 
PROTOCOL BETWEEN THE DEPARTMENT OF ENERGY OF THE UNITED 
STATES OF AMERICA AND THE MINISTRY OF SCIENCE AND 
TECHNOLOGY OF THE PEOPLE'S REPUBLIC OF CHINA FOR 
COOPERATION IN THE FIELDS OF ENERGY EFFICIENCY AND 
RENEWABLE ENERGY TECHNOLOGY DEVELOPMENT AND UTILIZATION 
 
The Department of Energy of the United States of America 
and the Ministry of Science and Technology of the People's 
Republic of China ( 'the Parties'): 
 
 
BEIJING 00000346  004 OF 008 
 
 
Considering the cooperation between the countries in 
science and technological development pursuant to the 
Agreement between the Government of the United States of 
America and the Government of the People's Republic of 
China on Cooperation in Science and Technology signed on 
January 31, 1979, as amended and extended ( 'Umbrella 
Agreement'); 
 
Noting expiration of the Protocol between the Department of 
Energy of the United States of America and the State 
Science and Technology Commission of the People's Republic 
of China for Cooperation in the Fields of Energy Efficiency 
and Renewable Energy Technology Development and Utilization 
signed February 23, 1995, as extended and amended ( '1995 
Protocol'); 
 
Desiring to continue the cooperation undertaken under the 
now-expired 1995 Protocol in the fields of energy 
efficiency and renewable energy technology development and 
utilization for the mutual benefit of each Party; 
Recognizing that there is a mutual interest inpromoting 
the acceleration of scientific and technological research 
and development in the fields of energy efficiency and 
renewable energy technology, and the commercialization of 
technologies developed through such activities; and 
 
Believing that such research and development will 
accelerate the supplementation of fossil fuels with clean 
energy sources and promote economic and trade cooperation; 
 
HAVE AGREED AS FOLLOWS: 
 
ARTICLE 1 
SCOPE AND OBJECTIVE 
 
¶A. This Protocol is subject to the Umbrella Agreement. 
In the event of any conflict between the terms and 
conditions of the Umbrella Agreement and this Protocol, the 
terms and conditions of the Umbrella Agreement will govern. 
 
¶B. The objective of this Protocol is to promote 
technological cooperation between the Parties in the fields 
of energy efficiency and renewable energy technology 
development and utilization. 
 
 
ARTICLE 2 
AREAS OF COOPERATION 
 
¶A. Cooperation under this Protocol in the field of energy 
efficiency technology may take place in the following 
areas: 
 
¶1. Energy conservation technology in construction; 
¶2. Energy conservation technology in transportation and 
technology for alternative automobile fuel; 
¶3. Energy conservation technology in industries; and 
¶4. Such other areas in the field of energy efficiency 
technology as may be mutually agreed to, in advance, in 
writing, by the Parties. 
 
¶B. Cooperation under this Protocol in the field of 
renewable energy may include the following areas: 
 
¶1. Solar energy; 
¶2. Wind energy; 
¶3. Biomass energy; 
¶4. Geothermal energy; 
¶5. Ocean energy; 
¶6. Hydrogen energy; and 
¶7. Such other areas in the field of renewable energy as 
may be mutually agreed, in advance, in writing, by the 
Parties. 
 
ARTICLE 3 
 
BEIJING 00000346  005 OF 008 
 
 
FORMS OF COOPERATION 
 
Cooperative activities undertaken pursuant to this Protocol 
may include the following: 
 
¶A. Exchange of technical information and data on science 
and technical activities and methods and results of 
research and development; 
 
¶B. Exchange visits concerning the design and 
implementation of national renewable energy technologies 
and energy efficiency technology, including operational 
procedures, management and oversight, policy analysis, 
technology transfer and commercialization; 
 
¶C. Organization of, and participation in, technological 
demonstrations and seminars and other meetings on specific 
mutually agreed topics; 
 
¶D. Exchanges of information concerning commercialization 
and market potentials; 
 
¶E. Joint projects in which the Parties agree to share the 
work and costs; and 
 
¶F. Such other cooperation as may be agreed by the 
Parties, in advance, in writing. 
 
ARTICLE 4 
PROJECT ANNEX 
 
The Parties shall execute a Project Annex for each joint 
project undertaken under Article 3.E. of this Protocol. 
Each Project Annex, which shall be subject to this 
Protocol, shall contain provisions covering technical 
scope, exchange of proprietary information, management, 
total costs, cost sharing and schedule, as appropriate. 
 
ARTICLE 5 
MANAGEMENT 
 
¶A. Each Party shall name one Principal Coordinator to 
supervise activities under this Protocol.  The Principal 
Coordinators shall, by correspondence, consult with each 
other at least annually to evaluate the status of 
cooperation under this Protocol.  This evaluation will 
include review of the achievements, problems, and 
effectiveness of activities under this Protocol.  The 
Principal Coordinators also will consider future program 
opportunities with a view to maximizing the mutual benefits 
of cooperation.  When necessary, the Principal Coordinators 
shall meet to consider matters related to the 
implementation of this Protocol.  Such meetings shall be 
held alternately in the United States of America and the 
People's Republic of China. 
 
¶B. Subject to the prior approval of the Parties, the 
Principal Coordinators shall appoint Project Coordinators 
to manage specific cooperative activities initiated under 
this Protocol and to establish and maintain working 
contacts at the staff level. 
 
ARTICLE 6 
ADDITIONAL ORGANIZATIONS 
 
The Parties may invite additional organizations within 
their own countries to participate, at those organizations' 
own expense, and subject to such terms and conditions as 
the Parties may specify, in cooperative activities under 
this Protocol.  Such organizations may become signatories 
to annexes to this Protocol upon agreement of both Parties 
in writing. 
 
ARTICLE 7 
ASSIGNMENT OF STAFF 
 
 
BEIJING 00000346  006 OF 008 
 
 
The following provisions shall apply to assignment of 
staff: 
 
¶A. Each Party shall ensure that qualified staff is 
selected for assignment to the other Party.  Each 
assignment of staff shall be the subject of an exchange of 
letters between the participating institutions. 
 
¶B. Each Party shall be responsible for its staff's 
salaries, insurance, and allowances, and for the travel and 
living expenses of its staff while on assignment to the 
receiving Party unless otherwise agreed, in advance, in 
writing, by the Parties. 
 
¶C. The receiving Party shall provide all necessary 
assistance to the visiting staff and their families as 
regards administrative formalities, such as making travel 
arrangements. 
 
¶D. The sending Party shall ensure that its staff conforms 
to the general and special rules of work and safety 
regulations in force at the establishment of the receiving 
Party, unless otherwise agreed in a separate assignment 
agreement. 
 
ARTICLE 8 
INTELLECTUAL PROPERTY AND INFORMATION 
 
¶A. Dissemination, use and protection of information used 
or generated in the activities conducted pursuant to this 
Protocol and its annexes, and the allocation of rights in 
intellectual property arising in the course of such 
activities shall be governed by the provisions set forth in 
Annex I to the Umbrella Agreement. 
 
¶B. Any scientific and technical information provided by 
one Party to the other Party pursuant to this Protocol 
shall be accurate to the best knowledge and belief of the 
providing Party; however, neither Party warrants the 
suitability of the information for any particular use or 
application by the receiving Party or any third party. 
 
ARTICLE 9 
AVAILABLE INFORMATION 
 
Each Party shall make available to the other technical 
information that is: (1) relevant to or necessary for 
activities conducted under this Protocol; and (2) either in 
the Party's possession or available to it and which it has 
the right to disclose. 
 
ARTICLE 10 
SECURITY OBLIGATION 
 
Both Parties agree that no information or equipment 
requiring protection in the interest of national security, 
defense or foreign relations and classified in accordance 
with its applicable national laws, regulations or 
directives shall be provided under this Protocol.  In the 
event that information or equipment which is known or 
believed to require such protection is identified by a 
Party in the course of cooperative activities pursuant to 
this Protocol, it shall be brought immediately to the 
attention of the appropriate officials of the other Party. 
The Parties shall consult to identify and implement 
appropriate security measures for such information and 
equipment, to be agreed upon by the Parties in writing. 
The Parties shall, if appropriate, amend this Protocol to 
incorporate such security measures. 
 
ARTICLE 11 
COSTS 
 
Unless otherwise agreed in writing, costs resulting from 
activities under this Protocol shall be the responsibility 
of the Party that incurs them. 
 
BEIJING 00000346  007 OF 008 
 
 
 
ARTICLE 12 
APPLICABLE LAW AND AVAILABILITY OF RESOURCES 
 
Each Party shall conduct the activities provided for in 
this Protocol subject to the applicable laws and 
regulations of its respective country, and shall provide 
resources subject to the availability of its personnel and 
appropriated funds. 
 
ARTICLE 13 
DISPUTES 
 
Any dispute concerning the interpretation or application of 
this Protocol shall be settled by consultation of the 
Parties. 
 
ARTICLE 14 
GENERAL PROVISIONS 
 
¶A. This Protocol shall enter into force upon signature 
and, subject to paragraph D of this Article, shall remain 
in force for five (5) years. 
 
¶B. This Protocol may be amended or extended by written 
agreement of the Parties. 
 
¶C. The Parties may agree to continue until completion all 
activities initiated but not completed at the expiration of 
this Protocol. 
 
¶D. Either Party may terminate this Protocol at any time 
upon six (6) months advance written notice to the other 
Party. 
 
DONE at Beijing, this 15th day of December, 2006, in 
duplicate, in the English and Chinese languages, each text 
being equally authentic. 
 
FOR THE DEPARTMENT OF ENERGY  FOR THE MINISTRY OF OF 
THE UNITED STATES OF AMERICA:  SCIENCE AND TECHNOLOGY 
     OF THE PEOPLE'S REPUBLIC 
     OF CHINA: 
 
End of Protocol Text. 
 
PARTICIPANTS 
------------ 
 
¶12.  (U)  United States participants: 
 
Samuel W. Bodman - Secretary of Energy 
Karen Harbert - DOE Assistant Secretary for Policy and 
 International Affairs 
Jeffrey Kupfer - DOE Secretary's Chief of Staff 
Anne Womack Koulton - DOE Director of Public Affairs 
Molly Williamson - DOE Secretary's Senior Foreign Policy 
 Advisor 
Ben Getto - DOE Secretary's Senior Policy Advisor 
Dr. Marco Di Capua - Executive Director, DOE China Office 
Dr. Matthew Slaughter - Member, Council of Economic 
 Advisors 
 
People's Republic of China participants: 
 
National Development and Reform Commission - 
Ma Kai - Chairman 
Zhang Xiao Qiang - Vice Chairman 
Zhao Xiao Ping - Director General, Energy Bureau 
Madame Zhao Jia Rong - Director General, Department of 
 Energy Conservation and Environmental Protection 
 
      Ministry of Science and Technology - 
Xu Guanhua - Minister 
Jin Xiaoming - Director General, Department of 
 International Cooperation 
 
BEIJING 00000346  008 OF 008 
 
 
Xu Jing - Deputy Director General, Department of High and 
 New Technology Development and Industrialization 
Yan Jin - Deputy Director General, Department of Social 
      Development 
Li Xin - Programme Officer, Department of International 
Cooperation 
 
 
RANDT