VZCZCXRO1624
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #7486 3480727
ZNR UUUUU ZZH
R 140727Z DEC 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 4012
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS BEIJING 007486 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB U/S JEFFERY 
STATE FOR EAP DAS CHRISTENSEN 
TREASURY FOR OASIA/CUSHMAN 
USDA/FAS/ITP FOR SHEPPARD 
 
E.O. 12958:  N/A 
TAGS: ECON EINV ENRG PGOV SOCI CH
SUBJECT: U/S JEFFERY DISCUSSES NEXT ROUND OF STATE-NDRC DIALOGUE 
WITH NDRC VICE CHAIRMAN ZHANG XIAOQIANG 
 
SUMMARY 
------- 
 
¶1. (SBU) Under Secretary of State for Economic, Energy, and 
Agricultural Affairs Reuben Jeffery and the Vice Chairman of China's 
National Development Reform Commission (NDRC), Zhang Xiaoqiang, met 
on the margins of the Strategic Economic Dialogue (SED) on December 
12 to discuss the upcoming 7th Round of the State-NDRC Dialogue.  On 
Dialogue topics, both sides agreed to focus on: (1) the bilateral 
investment environment, (2) macroeconomic issues of concern and (3) 
energy and the environment in the next round, which is tentatively 
scheduled for late February.  End Summary. 
 
STATE-NDRC DIALOGUE AN IMPORTANT MECHANISM 
------------------------------------------ 
 
¶2. (SBU) Vice Chairman Zhang stated that the State-NDRC Dialogue has 
been an important mechanism for discussing economic reform issues 
since 2003.  Dialogue toics have covered a wide range of issues, he 
sid, including economic reform, industrial structural reforms, 
energy policy, agricultural development, information technology, and 
economic development.  The NDRC is very interested in maintaining 
the dialogue mechanism, and Zhang said the NDRC is looking forward 
to the 7th Round of the State-NDRC Dialogue in the United States in 
early 2008.  U/S Jeffery agreed that the State-NDRC Dialogue has 
been very constructive and is especially useful because it is 
flexible and complements existing dialogues. 
 
FOCUSING ON THE INVESTMENT ENVIRONMENT 
-------------------------------------- 
 
¶3. (SBU) Zhang welcomed U/S Jeffery's proposal to discuss investment 
issues during the next round of the State-NDRC Dialogue.  The 
investment environment is very important for economic development 
right now, U/S Jeffery said, and the State-NDRC Dialogue presents a 
special opportunity to talk about investment rules in an open and 
direct way.  Both sides need to clearly outline the facts and 
realities of their respective investment environments and separate 
those facts from rhetoric that is protectionist and nationalistic, 
U/S Jeffery said.  Vice Chairman Zhang agreed that investment is an 
important issue of mutual interest, and the State-NDRC Dialogue 
would be a good venue for discussing in general terms how to move 
forward in several areas.  (Note:  On December 13, Vice Chairman 
Zhang shared some of his concerns about improving the bilateral 
investment environment during Session VI of the SED.  Septel to 
follow.  End Note.) 
 
UNDERSTANDING THE MACROECONOMIC SITUATION 
----------------------------------------- 
 
¶4. (SBU) Vice Chairman Zhang and U/S Jeffery also agreed that the 
7th Round of the State-NDRC Dialogue should continue to focus 
attention on macroeconomic concerns, particularly during a period 
when there are economic difficulties in both the United States in 
China.  The next round of the Dialogue could lead to a better 
understanding of NDRC's views on socioeconomic development in China 
following the 17th Party Congress as well as thoughts at the State 
Department and other government agencies on the economic situation 
in the United States (especially the impact of the sub-prime 
mortgage crisis and rising oil prices).  In addition, other issues 
of mutual concern such as energy and the environment possibly could 
be included in the Dialogue. 
 
WORKING OUT THE DETAILS 
----------------------- 
 
¶5. (SBU) U/S Jeffery and Vice Chairman Zhang agreed that the 7th 
Round of the State-NDRC Dialogue would be held in Washington in late 
February.  NDRC is likely to be represented by Vice Chairman Zhu 
Zhixin, who was traveling on December 12 but was the interlocutor 
for five of the previous six rounds.  (Note: In a separate 
conversation, contacts at NDRC said that Zhu is one of two potential 
successors to NDRC Chairman Ma Kai, who is slated to be elevated to 
the State Council.  End Note.)  Both sides will continue to share 
thoughts on a more detailed agenda for the next round but will have 
to finalize the agenda by late January due the Chinese Lunar New 
Year Holiday that begins on February 7. 
 
RANDT