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UNCLAS STATE 001522 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CH EAID JA KS PGOV PREL
SUBJECT: U.S.-JAPAN-KOREA POLICY PLANNING TALKS - WORKING 
LUNCH AND AFTERNOON SESSION 
 
REF: STATE 1514 
 
¶1. (SBU) SUMMARY.  This cable reports on the working lunch 
and afternoon session of the U.S.-Japan-Korea policy planning 
trilateral held on December 17 (see reftel for reporting on 
the welcome dinner and morning session).  At the lunch, S/P 
Director David Gordon, Japanese Deputy Vice Minister for 
Foreign Policy Chikao Kawai, and ROK Deputy Foreign Minister 
Park In-kook exchanged views on the future of China, 
including military modernization.  During the final afternoon 
session, the officials and their delegation members discussed 
regional cooperation in Asia, multilateral security regimes 
in Northeast Asia, and aid cooperation.  END SUMMARY. 
 
--------------------------------- 
WORKING LUNCH:  THE RISE OF CHINA 
--------------------------------- 
 
¶2. (SBU) Japanese Deputy Vice Foreign Minister Kawai noted 
that dealing with China was one of Tokyo's greatest foreign 
policy challenges.  The PRC was now Japan's top trade partner 
and the number one destination for Japanese capital.  The two 
nations' economies were increasingly interdependent, Kawai 
observed.  Yet despite the robust growth in commercial ties, 
Japan had serious concerns about China's internal stability 
and its growing military capabilities focused, it seemed, on 
Taiwan.  China should hear the same message from Tokyo, 
Seoul, and Washington:  don't gamble on a military solution 
to the Taiwan problem.  Kawai added that China's growing need 
for energy supplies underpinned Chinese support for 
"problematic" countries throughout Africa, foremost among 
them Sudan.  According to Kawai, Japanese analysts feared the 
Chinese economy was in worse shape than Beijing admitted 
publicly; the PRC was working closely with Japan to draw on 
Japanese experience in managing non-performing loans and 
limiting the imp 
act of the sub-prime loan crisis.  Chinese leaders were very 
worried about the economy, Kawai asserted, adding "so are we." 
 
¶3. (SBU) South Korean Deputy Foreign Minister Park In-kook 
said China posed a big challenge for the ROK, noting that the 
PRC was South Korea's top trade partner as well.  Echoing 
many of Kawai's themes, Park added that the PRC leadership at 
times used xenophobia to help placate a Chinese public 
increasingly angry about corruption and the country's 
economic problems.  The PRC was also a major emitter of 
greenhouse gases, Park added. 
 
¶4. (SBU) S/P Director David Gordon noted that there has been 
a shift in the PRC's approach to dealing with the United 
States.  The longtime view was zero sum:  the United States, 
as the dominant world power, sought to prevent China from 
rising to its full potential and playing its rightful 
international role.  Now, Gordon said, there seemed to be a 
less zero sum view of ties with Washington.  Evidence of the 
shift was visible in Darfur, where the Chinese were now part 
of the solution.  Still, China's lack of transparency in its 
military modernization program was troubling, Gordon said, 
adding that it was difficult to engage with the Chinese 
military.  Kawai seconded that view, explaining that Japan 
had tried to expand its contacts with the PLA but was 
similarly finding it hard to get the military to engage. 
Park noted that the PLA Navy was now fielding ballistic 
missile submarines, which the ROK found troubling. 
 
--------------------------------------------- --- 
AFTERNOON SESSION:  REGIONAL COOPERATION IN ASIA 
--------------------------------------------- --- 
 
¶5. (SBU) DVM Kawai opened this discussion by providing an 
update on the East Asia Summit held in Singapore on November 
21 and 22.  Main topics on the agenda there included 
environmental issues, climate change, and energy security. 
Kawai praised ASEAN's role in fostering regional cooperation, 
and suggested that the U.S., Korea, and Japan support the 
organization.  Pointing to the disappointment many in Asia 
felt after President Bush canceled his trip to Singapore at 
the last minute, Kawai said it would be helpful for the U.S. 
to send a clear signal about its support for regional 
cooperation in Asia.  Secretary Rice's presence at the ASEAN 
Regional Forum (ARF) was one possible signal the U.S. could 
send, said Kawai. 
 
¶6. (SBU) DFM Park mentioned ASEAN's success in creating 
consultative bodies and reiterated the importance of dialogue 
in the region.  However, Park said, the overlapping of 
institutions can be confusing and the imbalance between real 
capacity and nominal leadership must be addressed. 
 
¶7. (SBU) EAP Political Advisor Kathy Stephens stated that the 
perception that the U.S. is not as engaged in regional 
cooperation and institution-building in East Asia -- whether 
that is true or not -- must be addressed.  She continued that 
ASEAN's relevance was being tested on the Burma issue, and 
asked participants to consider the following questions:  1) 
what is the ultimate objective of the EAS?; 2) with climate 
change and environmental issues on the EAS agenda, how is the 
EAS the same as and different from APEC?; 3) has there been 
an evolution in China's attitude towards the EAS, ARF, and 
APEC?; and 4) why is the bulk of the political and economic 
capital in northeast Asia, yet institution-building taking 
place in southeast Asia?  Deputy Assistant Secretary of 
Defense David Sedney pointed out that the annual Shangri-la 
conference in Singapore is an important and effective 
mechanism for Asian engagement for the U.S. military. 
 
¶8. (SBU) Wrapping up the session, Kawai recognized that the 
number of institutions in Asia was at times frustrating but 
urged countries to be patient, as such a multilateral 
framework was a reflection of the reality in Asia and was 
logical for Asia.  Kawai argued that the region needed 
multiple institutions, but must coordinate so they move in 
the same direction.  He also remarked that Chinese attitudes 
towards regional institution-building had changed 
significantly in the last five to ten years--from 
non-participation to enthusiasm. 
 
--------------------------------------------- --------- 
AFTERNOON SESSION:  SECURITY REGIMES IN NORTHEAST ASIA 
--------------------------------------------- --------- 
 
¶9. (SBU) Moving to Northeast Asia specifically, DFM Park 
named five principal, ongoing security issues in the region: 
1) North Korean denuclearization; 2) Taiwan; 3) historical 
animosities; 4) nationalism; and 5) territorial disputes.  He 
also listed several non-traditional security concerns, 
including terrorism, illegal migration, pollution, 
transnational crime, and pandemics.  Finally, Park pointed 
out challenges to regional security that had an economic 
dimension, as well as the rise of China. 
 
¶10. (SBU) Park recommended taking a three-track approach when 
dealing with northeast Asian security:  1) the 
denuclearization of North Korea, 2) the establishment of a 
peace regime on the Korean peninsula, and 3) the 
establishment of a Northeast Asian Peace and Security 
Mechanism (NEAPSM).  According to Park, the DPRK did not have 
an objection to moving forward on discussions on the NEAPSM, 
but preferred to revisit the idea after it normalized ties 
with Japan and the U.S.  Park said that the ideal outcome 
after North Korean denuclearization would be a nuclear free 
zone, but that other options included:  1) a system similar 
to the OSCE based on confidence building measures; 2) one 
resembling NATO; and 3) another resembling the ASEAN Regional 
Forum.  Park did not express a preference among these three 
options, but did emphasize the need for some kind of 
institution as well as U.S. involvement as a guarantor or 
facilitator. 
 
¶11. (SBU) Political Advisor Stephens pointed to the absence 
of a security mechanism in Northeast Asia, and praised 
efforts through the Six-Party Talks to create a NEAPSM as 
novel and good.  She emphasized, however, that there was no 
zero sum between any future regional mechanism and U.S. 
bilateral alliances in the region.  Stephens remarked that in 
Europe, bilateral alliances actually strengthened as regional 
groupings developed around them. 
 
¶12. (SBU) DVM Kawai echoed the importance of the Six-Party 
Talks for northeast Asian security and the potential that it 
will develop into a framework for discussions on security, 
but reminded the group that the first priority was to address 
the denuclearization of the DPRK. 
 
----------------------------------- 
AFTERNOON SESSION:  AID COOPERATION 
----------------------------------- 
 
¶13. (SBU) S/P staff members James Green and Nazanin Ash 
explained the structure and goals of USG offices working on 
foreign assistance, recently consolidated under the office of 
the Director of U.S. Foreign Assistance (referred to as "F"). 
 As the largest donor of official development assistance 
(ODA), the U.S. has provided USD 23 to USD 28 billion over 
the last few years, to 155 of 190 sovereign nations as well 
as to tackle problems that transcend borders.  Seeing the 
need to focus on the administration and allocation of aid, 
U.S. aid administrators have been working to improve: 1) the 
alignment of foreign assistance with U.S. foreign policy 
goals; 2) coordination and efficiency between the 80 agencies 
and accounts that deal with foreign aid; 3) transparency; and 
4) accountability and evaluation of performance and results. 
American aid efforts can be separated into five major 
categories: 1) peace and security; 2) economic growth; 3) 
effective governance; 4) investment in human capacity; and 5) 
humanitarian 
assistance. 
 
¶14. (SBU) DFM Park informed the group that the ROK currently 
provided USD 700 million in foreign assistance but hoped to 
increase the figure to USD 1 billion by 2009 and USD 3.2 
billion by 2015.  Although he said there could be strong 
resistance from domestic groups who opposed increased foreign 
aid, Park explained that the ROKG had set goals for increased 
spending.  Because of the interest many recipient nations 
have shown in South Korea's rapid transformation from 
receiving aid to providing it, Park said that the ROK had 
started to focus on training programs.  He also stated that 
South Korean aid initiatives were traditionally aimed at 
Asian countries but were increasingly targeted towards other 
regions such as Africa and at global initiatives such as the 
Partnership for Democratic Governance.  Before ending his 
remarks, Park proposed that the U.S., Japan, and the ROK 
organize policy consultation groups to discuss development 
policies with the aim of coordinating aid policy in Asia and 
beyond. 
 
¶15. (SBU) The top provider of foreign aid until 2000, Japan 
was now number three behind the U.S. and UK, said DVM Kawai. 
He explained that the drop was due to budgetary reasons and 
increasing public criticism during a time when the country 
faced serious problems with its pension fund and health care. 
 The government of Japan, continued Kawai, must turn the 
trend around and increase the level of its ODA.  With the 
Japanese economy recovering, Kawai felt the public would 
support a renewed emphasis on foreign aid.  Because many 
Asian countries (including Thailand and Malaysia) had 
"graduated" from recipient status, Japan was now looking to 
the Middle East, Africa, and Central Asia for its aid 
efforts.  Kawai mentioned that Japan was also engaging in 
aid-related dialogue with China, which wanted to learn more 
about how to implement ODA. 
 
-------------------- 
LIST OF PARTICIPANTS 
-------------------- 
 
¶16. (SBU) 
UNITED STATES OF AMERICA 
S/P Director David Gordon 
S/P Principal Deputy Kori Schake 
S/P James Green 
S/P Nazanin Ash 
EAP DAS Alex Arvizu 
EAP Senior Advisor Kathleen Stephens 
EAP/K Jim Heller 
EAP/K Andrew Ou 
EAP/J Forest Yang 
Embassy Seoul Brian McFeeters 
OSD DASD David Sedney 
 
JAPAN 
Deputy Vice Minister Chikao Kawai 
Policy Planning Division Deputy Director Daisuke Hoshino 
Japanese Embassy First Secretary Taisuke Mibae 
 
REPUBLIC OF KOREA 
Deputy Foreign Minister Park In-kook 
Development and Cooperation Division Director Jeong Jin-kyu 
North America Division First Secretary Kang Dae-soo 
Policy Division First Secretary Jung Young-soo 
Policy Division First Secretary Hwang Jun-shik 
Staff to Director Jeong Lee Ah-jung 
ROK Embassy Political Counselor Lee Baek-soon 
ROK Embassy First Secretary Ryu Chang-soo 
RICE