VZCZCXRO9171
PP RUEHCN RUEHGH
DE RUEHBJ #6652/01 2880033
ZNR UUUUU ZZH
P 150033Z OCT 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 2767
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEHCN/AMCONSUL CHENGDU 8717
RUEHGZ/AMCONSUL GUANGZHOU 3533
RUEHHK/AMCONSUL HONG KONG 9751
RUEHGH/AMCONSUL SHANGHAI 8527
RUEHSH/AMCONSUL SHENYANG 8370
RUEHIN/AIT TAIPEI 6681

UNCLAS SECTION 01 OF 02 BEIJING 006652 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR ITA/MAC/AP/MCQUEEN, Kasoff, Karnak, Melcher 
 
STATE PASS USTR STRATFORD, WINTER, ALTBACH, GENEVA PASS 
USTR 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PREL CH
SUBJECT: MEETING WITH MFA VICE MINISTER ZHANG YESUI 
 
 
¶1. (U) Summary.  On October 9, Deputy USTR Karan Bhatia and 
Department of Commerce Acting Under Secretary Christopher 
Padilla told MFA Vice Minister Zhang Yesui that the JCCT 
preparatory meeting with VM Ma were constructive and much 
work remains for the JCCT and SED.  China should send an 
unequivocal signal that it remains open to foreign 
investment and trade and evince tangible progress on 
product safety.  Zhang said that China is very concerned 
about Congressional bills directed against China. End 
Summary. 
 
Much JCCT and SED Work Lies Ahead 
--------------------------------- 
 
¶2. (U) Bhatia and Padilla noted that that morning's JCCT 
discussions with Ministry of Commerce Vice Minister Ma 
Xiuhong had been good (septel).  In order to counteract 
pressure from the United States Congress that could 
restrict trade, the United States and Chinese sides have 
much work before them to demonstrate progress in areas such 
as market access and transparency at both the JCCT and SED. 
In discussions with Vice Minister Ma, the United States 
side made three key points: (1) a clear, unequivocal 
statement is needed from the Chinese side affirming China's 
commitment to remain open to foreign investment and trade; 
(2) both sides must evince concrete action in the area of 
product safety; and (3) the JCCT is focused for short-term, 
tangible results, while the SED is designed for more long- 
term, macroeconomic issues.  Bhatia and Padilla also 
appealed for assistance from MFA to enlist China's support 
to combat the illegal harvesting of trees from Asia. 
 
¶3. (U) Not being briefed on the JCCT discussions, Zhang 
would not comment on details.  He stated, however, that 
China's policy to attract foreign investment had not 
changed.  China has taken tough measures to assure product 
safety, and 99 percent of Chinese products meet standards. 
An MOU on product safety could be signed during SED III, he 
said.  He agreed that the JCCT and SED should not overlap. 
He noted that China has consistently opposed illegal 
logging.  He looked forward to the visit of Assistant 
Secretary McMurray and hoped that a consensus could be 
 
SIPDIS 
reached soon so that both sides could sign an agreement on 
illegal logging at SED III. 
 
China Concerned by Congressional Bills 
--------------------------------------------- ----- 
 
¶4. (U) Noting that bilaeral economic and trade ties are 
strengthening year by year, with United exports expanding 
more than 16.4 percent between January and August and 
China's remaining The United States' fastest growing export 
market for the fifth straight year, Vice Minister Zhang 
said that some friction in such a large relationship is 
unavoidable.  China believes in dialog, opposes 
politicizing such issues, and does not support 
protectionism.  In this regard, China is "most concerned" 
by the 40 plus China specific bills before Congress, 
specifically the Baucus/Grassley Currency Bill and the 
Dole/Shelby Bill.  Since such bills, if enacted, would 
damage bilateral relations, China hopes that the United 
States Government will work hard to dissuade Congress. 
 
¶5. (U) Zhang also appealed to the USDOC to relax export 
controls.  China recognized USDOC's recent efforts in this 
regard, but these efforts do not suffice.  As for visas, 
Zhang asked that application procedures are still too 
complicated, although he appreciated the simplification of 
procedures for ministerial-level visitors following SED II. 
China believes that the 20 percent refusal rate is too high. 
A higher visa issuance rate would boost trade and 
investment. 
 
¶6. (U) Bhatia said that the administration had expressed 
its opposition to the Baucus/Grassley and Dole/Shelby Bills 
in a joint letter from Secretaries Gutierrez and Paulson 
and Ambassador Schwab to Congress. These senior leaders 
called for more engagement, not legislation.  Bhatia noted, 
however, such Congressional pressures could increase as the 
elections approach and encouraged China to produce tangible 
 
BEIJING 00006652  002 OF 002 
 
 
results in resolving trade frictions, deliver a clear 
message about the country's future economic direction, and 
engage in multilateral institutions like DOHA.  As for 
visas, Padilla noted that visa issuance had grown 20 
percent in the past year.  He also urged China to continue 
working with the U.S. on the Tourism MOU, especially the 
repatriation issue, with the hope of it being signed in 
time for the JCCT. 
 
¶7. (U) China opposes illegal immigration and will accept 
any documented illegal Chinese immigrant who does not have 
a criminal record.  There is no political barrier to 
signing a repatriation agreement.  In this regard, he noted 
that the United Kingdom and China, following two years of 
discussions, had recently concluded a repatriation 
agreement. 
 
¶8. (U) Meeting Participants 
--------------------------- 
 
Chinese side: 
 
Mr. Zhang Yesui, Vice Minister, MFA 
Mr. Xie Feng, Deputy Director General, North American 
Oceania Affairs, MFA 
Mr. An Gang, Director, North American Oceania Affairs, MFA 
Mr. Jing Quan, Deputy Director, North American Oceania 
Affairs, MFA 
 
United States side: 
 
Mr. Karan Bhatia, Deputy USTR 
Mr. Christopher Padilla, DOC Acting Under Secretary 
Mr. Daniel Piccuta, Charge d'Affaires 
Mr. Tim Stratford Assiatant USTR 
Mr. Chris Adams, USTR Senior Trade Representative 
Mr. Eric Madison, Deputy Econ Chief (note taker) 
Ms. Caroline Katzin, Special Counsel FCS 
Ms. Lisa Rigoli, Trade Facilitation Office 
Ms. Rebecca Karnak, DOC 
Ms. Sarah Ellerman, FCS 
 
¶9. (U) The Bhatia/Padilla delegation has cleared this cable. 
 
Piccuta