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O 140916Z NOV 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3430
INFO RUEHOO/CHINA POSTS COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 007098 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 11/14/2027 
TAGS: PREL PGOV CH JN IN
SUBJECT: CAUTIOUS OPTIMISM ON CHINA-JAPAN TIES DESPITE LACK 
OF EAST CHINA SEA PROGRESS 
 
 
Classified By: Political Minister Counselor Aubrey Carlson.  Reasons 1. 
4 (b/d). 
 
Summary 
------- 
 
¶1. (C) Chinese and Japanese contacts were cautiously 
optimistic about Japanese PM Fukuda's impact on China- 
Japan relations, highlighting his "balanced" approach, 
but they were hesitant to predict any significant 
developments in the near term.  The October round of 
talks on joint energy exploration in the East China 
Sea ended without progress, our interlocutors said.  A 
PRC official underscored the "big gap" between Chinese 
and Japanese positions, citing disagreement over 
exploration of the Chunxiao field near the Sea's 
midpoint.  There may be progress on the East China Sea 
issue before PM Fukuda's upcoming China visit, 
according to a Japanese diplomat.  Chinese contacts 
downplayed the "accidental" timing of the Japanese and 
Chinese lunar probes' launching in October, stressing 
there is no "competition" between their space 
programs.  A Japanese Embassy official noted Chinese 
displeasure at planned mid-November visits to Japan by 
the Dalai Lamaand Uighur activist Rebiya Kadeer.  End 
Summary. 
 
Assessment of PM Fukuda 
----------------------- 
 
¶2. (C) MFA Asian Affairs Department Japan Division 
Deputy Director Lu Guijun told Poloff on October 26 
that PM Fukuda's "steady" style is a "good thing" for 
Sino-Japanese ties.  Fukuda "understands China" and 
was close to China even before he became Prime 
Minister.  The fact that PM Fukuda has promised not to 
visit Yasukuni Shrine demonstrates his more "balanced" 
approach, compared with former PM Abe who did not 
specifically promise to avoid the shrine, Lu said. 
Peking University (Beida) Professor Liang Yunxiang was 
reluctant to declare that ties had already improved 
under Fukuda.  "There has not been a fundamental 
improvement yet," stated Professor Liang on October 
¶31.  "The atmosphere is better," but concrete issues 
have not yet been addressed.  At the very least, 
China's relations with Japan "will not be bad." 
 
¶3. (C) Japanese Embassy First Secretary Akira Yokochi 
was upbeat about the PRC's impression of PM Fukuda on 
October 25, citing the Prime Minister's father's role 
in negotiating a friendship treaty with China in the 
1970s.  Yokochi did not foresee a major change in 
Chinese policy toward a Fukuda-led Japan.  University 
of Shizuoka Professor Hajime Izumi (who was 
participating in a conference in Beijing and who 
claimed to know the Prime Minister well, having met 
with Fukuda once per month during his tenure as Chief 
Cabinet Secretary) told Poloff on October 29 that he 
is optimistic the bilateral relationship will continue 
to develop, though he was hesitant to predict any 
breakthroughs.  Professor Izumi underscored that PM 
Fukuda "likes China."  The only trip abroad Fukuda 
made while Chief Cabinet Secretary was to China, and 
any overseas trip in that position is unusual, he 
stated. 
 
¶4. (C) Professor Izumi said if it were up to Fukuda, 
Japan would be more flexible on the WWII history 
issue.  However, the PM has to consider the domestic 
Japanese constituency as well.  According to Izumi, 
Fukuda is not supportive of the controversial "Arc of 
Freedom and Prosperity," as it was a formulation of 
Aso's MOFA and not official Liberal Democratic Party 
(LDP) policy.  This idea will not be continued, he 
stressed.  Nonetheless, Izumi expected that Fukuda 
will push increased engagement with Southeast Asia and 
India and will "compete" with China internationally. 
Izumi stressed to Poloff that the PM Fukuda, unlike 
Koizumi and even Abe, is more interested in 
cooperating and handshaking "above the table," while 
"kicking" China under the table.  China, the Professor 
assessed, appreciates this face-saving approach. 
 
Hazards Remain in the East China Sea 
------------------------------------ 
 
¶5. (C) The October round of China-Japan talks on joint 
exploration in the East China Sea ended without 
progress, contacts told us.  Beida Professor Liang 
said even if the two sides do not address the issue of 
sovereignty "on the surface," the discussion of a 
joint development area is essentially a sovereignty 
 
BEIJING 00007098  002 OF 003 
 
 
issue.  Japan wants to open up the whole of the East 
China Sea to joint exploration because it does not 
recognize Chinese claims.  Meanwhile, Liang said that 
China has already begun exploration of a sizable 
portion on "its side" and wants to move its own 
development "east of the middle line."  MFA Deputy 
Director Lu noted there is a "big gap" between Chinese 
and Japanese positions.  The Japanese side put forth 
unreasonable demands that it had not raised in 
previous rounds, he stated.  For example, the Chunxiao 
field is on China's side of the "unilateral" line 
Japan claims as the border demarcation.  Since the 
1970s, Lu said, China has been exploring the Chunxiao 
field.  Hydrocarbons were discovered there in 2004, 
and Japan has now requested that China cease its 
operations.  Previously, Japan tacitly approved 
Chinese development, said Lu.  Japanese Embassy's 
Yokochi confirmed that one of the main issues in the 
last round related to Chunxiao.  One strand of this 
field is connected to the Japanese side, Yokochi 
explained.  Japan asked China to present a paper on 
the Chunxiao "station," he said. 
 
¶6. (C) MFA's Lu expressed his frustration: while China 
has given concessions, Japan has "even higher 
demands."  Lu was not optimistic about an early 
breakthrough in the talks.  "These are difficult 
negotiations," he said, "and Japan's demands are too 
high."  Yokochi presented a similar viewpoint from the 
Japanese side.  Japan is not satisfied with China's 
attitude, he said.  The Chinese view the issue within 
the greater context of sovereignty and territory, 
which complicates negotiations.  However, the Sino- 
Japanese "strategic" relationship hinges on solving 
this issue, Yokochi stated.  Japan has already made 
concessions, and China has not changed its stance at 
all, he complained.  The Japanese Poloff said he was 
"irritated" and "sick and tired of negotiating with 
the Chinese side."  Yokochi stated that he supports 
using the International Court of Justice to "give 
advice" on resolution.  Lu said the Chinese have not 
considered asking an international body to weigh in. 
Both sides are willing to continue consultations, Lu 
stated, adding that China is prepared to "work hard," 
and Japan should do the same.  He stressed that both 
parties should make concessions: it should not be up 
to China to simply accept the unilateral demands of 
the Japanese side. 
 
¶7. (C) Japanese Poloff Yokochi was hopeful that there 
will be progress before PM Fukuda's visit to China, 
but he was not optimistic that there will be a 
breakthrough in the near term.  Now that the Chinese 
Communist Party Congress has adjourned, President Hu 
Jintao is in a "strong position" to adjust China's 
stance on this issue, Yokochi argued.  Concessions 
from the PRC were more difficult before Hu 
consolidated his power, he said.  Professor Izumi 
assessed the possibility of a breakthrough to be slim. 
China wants to "wait and see" on the East China Sea 
because they perceive Fukuda to be weak.  China does 
not have to resolve this issue soon, Izumi stressed. 
Yokochi mentioned that Chinese Premier Wen Jiabao and 
PM Fukuda may have an opportunity to discuss the East 
China Sea issue on the sidelines of the upcoming East 
Asia Summit in Singapore. 
 
The DJP and China Policy 
------------------------ 
 
¶8. (C) In response to questions about the LDP's 
staying power, Japanese Poloff Yokochi asserted that 
Japan's policy toward China will not change, no matter 
which party is in power.  Since Abe's 2006 visit, the 
Sino-Japanese relationship has increasingly been 
characterized by "strategic" ties, he said.  The 
Democratic Party of Japan (DJP) has no better option 
than to continue the current policy.  They do not 
support visits to Yasukuni Shrine, they do not support 
visits of high-level Taiwan leaders, nor do they 
support "denying historical facts."  The DJP has the 
same position as the LDP on these key issues, Yokochi 
stated.  Professor Liang told us that opposition DJP 
leader Ozawa "understands" China.  Liang predicted 
that lower house elections will take place in mid- 
2008, but a "strong" LDP showing would likely keep the 
DJP from power. 
 
¶9. (C) Professor Izumi said that he met with Japanese 
FM Komura earlier in October, during which they 
discussed China issues.  According to Izumi, the LDP 
leadership is aware of a "special relationship" 
 
BEIJING 00007098  003 OF 003 
 
 
between DJP leader Ozawa and recently-appointed 
Politburo Standing Committee Member Li Keqiang.  Ozawa 
apparently met Li during a youth exchange in the 
1980s.  The two have maintained contact over the 
years, and Li stayed at Ozawa's house in his hometown, 
Izumi said.  In addition, Li met with Ozawa during the 
Japanese opposition leader's recent trip to China. 
The LDP is "concerned" about this relationship, Izumi 
told us.  PM Fukuda has a "strong hope" and interest 
in inviting the new Politburo leadership to Japan 
after President Hu's planned visit in 2008. 
 
Chinese: No Space Race 
---------------------- 
 
¶10. (C) Both the MFA's Lu and Beida's Liang downplayed 
any competition between China and Japan on lunar 
probes.  China launched its first probe to the moon in 
October, a week after Japan.  The timing was purely 
"accidental," said Lu.  He told Poloff that China 
invited Japanese space officials to observe the 
launch.  There is no "competition," Lu stressed. 
Liang suggested that it was not China, but Japan that 
scheduled its launch date with China's in mind. 
China's moon shot was planned to coincide with the 
conclusion of the Party Congress, said the Professor. 
 
Building Long-Term Trust 
------------------------ 
 
¶11. (C) Deputy Director Lu was quick to cite recent 
"beneficial developments" in the Sino-Japanese 
relationship, especially in comparison to 2005.  The 
Japanese people feel a closer sense of friendship with 
China, and the two sides have reached an "important 
consensus," Lu stated.  However, Beida Professor Liang 
was pragmatic in his long-term assessment of the 
relationship.  It will take at least 20 years before 
there is a dramatic improvement in bilateral ties, 
said Liang.  His prediction rested on the precondition 
that relations are stable.  Economic issues and 
environmental protection are good starting points for 
Sino-Japanese cooperation, the Professor said. 
Shizuoka Professor Izumi also argued that economic 
issues are "good agenda items" for "future 
cooperation."  In the defense arena, Beida's Liang 
argued that the United States can play a constructive 
role between China and Japan.  When the United States 
and Japan hold military exercises, China could also 
participate, he suggested, adding that Chna's 
relationship to the U.S.-Japan alliance could mirror 
the "partnership" between Russia and NATO. 
 
Upcoming Events 
--------------- 
 
¶12. (C) MFA Deputy Director Lu, Professor Liang and 
Japanese First Secretary Yokochi all predicted that PM 
Fukuda will visit China in 2007 or early 2008.  A 
decision on specific timing has not yet been made, Lu 
and Yokochi concurred separately.  On November 9, an 
MFA Japan Division official told Poloff that no 
specific date had been set for the next round of the 
East China Sea dialogue, though she indicated the 
talks will likely take place in November.  The same 
contact revealed that the high-level economic dialogue 
with Japan will begin December 1. 
 
¶13. (C) Yokochi noted that the MFA called in the 
Japanese Ambassador because of the Dalai Lama's 
planned visit to Japan November 14.  It will be the 
22nd time the Tibetan religious leader has visited, 
and he will not meet Fukuda, according to Yokochi. 
The MFA also complained to Japan's Ambassador that the 
Dalai Lama will meet with Uighur activist Rebiya 
Kadeer while there, though Yokochi maintained that his 
government had no information regarding the meeting. 
 
¶14. (C) On December 13, there will be a ceremony in 
Nanjing to mark the reopening of the Rape of Nanking 
museum, Yokochi told Poloff.  The Japanese diplomat 
said the exhibits at the museum prior to the 
renovation were "terrible" and encouraged young people 
to dislike Japan.  Many Japanese officials have 
encouraged the PRC to make the museum's contents more 
"positive" toward the Japanese Government and the 
Japanese people, he said. 
PICCUTA