VZCZCXRO6282
OO RUEHCHI RUEHCN RUEHDT RUEHFK RUEHHM RUEHKSO RUEHPB
DE RUEHWL #0140/01 1142347
ZNY CCCCC ZZH
O 232347Z APR 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5196
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION PRIORITY
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 05 WELLINGTON 000140 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/ANP; EEB PLEASE PASS TO USTR 
 
E.O. 12958: DECL: 04/14/2018 
TAGS: ETRD PHUM PREL NZ
SUBJECT: DAS CHRISTENSEN'S MEETINGS WITH GNZ ON THE 
NZ-CHINA FTA, TIBET 
 
REF: WELLINGTON 121 
 
Classified By: Pol/Econ Counselor Margaret B. McKean; Reason 1.4 (b) an 
d (d) 
 
¶1. (C)  Summary.  During EAP DAS Christensen's April 7 visit 
to New Zealand, MFAT officials explained that the China-NZ 
free trade agreement (FTA) derived from New Zealand's concern 
over becoming marginalized in emerging East Asian trade 
relationships, coupled with China's willingness to enter into 
serious negotiations with New Zealand that could lead to the 
first Chinese FTA with an OECD country.  GNZ officials agreed 
with DAS Christensen's observation on the continued utility 
in coordinating private messages to Beijing as a means of 
maintaining positive engagement with China on issues of 
shared interest in East Asia and the Pacific region.  MOD 
officials downplayed growing military-to-military ties with 
China, noting that the exchanges and visits offer limited 
substance and insight.  End Summary. 
 
 
MFAT CEO Murdoch on NZ-China FTA:  "A Strategic Decision" 
--------------------------------------------- ------------ 
 
¶2.  (C)  MFAT CEO Simon Murdoch, accompanied by MFAT Deputy 
Secretary John McArthur, Asia Division China Unit head Graeme 
 
SIPDIS 
Waters, and Americas Division Director Carl Worker, welcomed 
DAS Tom Christensen on April 7 by outlining their perspective 
on the China FTA.  Murdoch placed the agreement in historic 
perspective, pointing out that New Zealand has been examining 
its regional trade relations since the mid-1990s in the 
context of trade liberalization talks within APEC.  Three 
years ago, the troubled Doha Round discussions worried New 
Zealand, said Murdoch, and there were signs that an 
APEC-based trade agreement would not work.  An ASEAN Plus 3 
trade partnership appeared to be more promising, continued 
Murdoch, and that troubled New Zealand, which has a fear of 
being marginalized.  At the same time, New Zealand has 
pursued bilateral FTAs with its major trading partners.  New 
Zealand's efforts with other more developed nations in East 
Asia, he continued, have met with mixed success; New Zealand 
has concluded bilateral agreements with Australia, Thailand, 
and Singapore in the context of the P-4, but Japan and South 
Korea remain closed.  New Zealand continues to discuss an FTA 
with ASEAN and Malaysia, noted Murdoch.  However, when New 
Zealand pulsed the Chinese three years ago, emphasized 
Murdoch, there was more receptivity than New Zealand had 
anticipated.  Given that China is one of New Zealand's most 
important trading partners, Murdoch said that if the Chinese 
were interested, New Zealand needed to be interested and the 
negotiations got underway. 
 
¶3.  (C)  DAS Christensen congratulated Murdoch on New 
Zealand's achieving the FTA with China, asking New Zealand's 
thoughts on the ASEAN Plus formulations.  Murdoch responded 
that ASEAN Plus China, ASEAN Plus Japan, and ASEAN Plus Korea 
talks are making progress.  A New Zealand Plus Australia Plus 
ASEAN formula is one that appeals to New Zealand, he noted. 
However, given China's interest in an ASEAN Plus agreement, 
New Zealand decided that it would be strategic to get in now. 
 John McArthur explained that the recently signed FTA with 
China was the fourth in a series of "firsts" for New Zealand; 
the first to sign a bilateral agreement on China's WTO 
admission, the first to recognize China's market economy 
status, and the first to launch free trade talks with China. 
Murdoch added that New Zealand's views on China mesh well 
with former Deputy Secretary Zoellick's notion of encouraging 
China to be a responsible stakeholder in the international 
community. 
 
¶4.  (C)  Christensen said that USG policy on China is 
tracking well, although China as a responsible stakeholder 
remains an aspirational target rather than a reality.  There 
have been positive shifts in China's position, he said, 
noting that there are long-term consequences when China makes 
statements on other countries' internal affairs and 
reconsiders its relationships with friendly governments.  The 
Chinese have been very helpful on North Korea.  On a range of 
issues, the US often would like more from China and believes 
that China is generally too patient with problem regimes.  On 
Sudan, Christensen opined that China does not get the credit 
it deserves.  China has gone from defending Khartoum to 
putting pressure on the Sudanese government.  China now 
 
WELLINGTON 00000140  002 OF 005 
 
 
supports the three-phase UN plan, has pushed Sudan to move to 
the second phase and deployed 135 peacekeepers (of 315 
promised) to Darfur -- the first non-African peacekeepers in 
Darfur.  This constitutes real progress from China's position 
on Sudan in the summer of 2006, underscored Christensen.  On 
Burma, China is not where the US would like it to be, he 
said, although Christensen acknowledged that UN special envoy 
Ibrahim Gambari likely would not have been granted access to 
Burma had it not been for the Chinese.  The USG was 
disappointed in Gambari's December visit, which China tends 
to label all such engagement as progress and call for more 
patience in Washington.  Christensen said Iran is an outlier 
in Chinese foreign policy; although China has signed three 
UNSCRs, China still pursues large economic deals and sells 
conventional arms to Iran.  Iran is exporting instability in 
a part of the world of strategic value to the Chinese, summed 
up Christensen.  We are trying to convince Beijing that its 
actions toward Tehran are not helpful to China nor to the 
international community. 
 
¶5.  (C)  The MFAT CEO asked if the North Koreans may be 
stalling in the Six-Party Talks until there is a new US 
administration.  DAS Christensen emphasized that if true, 
this would be a mistake.  President Bush is fully supportive 
of the Six-Party Talks process and has an excellent and 
experienced team in place.  If North Korea is serious about 
negotiating on this issue, the best time to do so is this 
year.  Murdoch offered that the New Zealand Ambassador to 
South Korea makes periodic visits to North Korea and he would 
ensure a similar message is passed at the next opportunity. 
He noted that FM Peters went to Pyongyang late last year and 
would be willing offer ODA as a sign that countries like New 
Zealand would be willing to normalize relations with New 
Zealand if there were sufficient progress in the Six-Party 
Talks.  Christensen responded that New Zealand's voice was 
important because there is an advantage to being a democracy 
outside the Talks that can provide an independent analysis. 
John McArthur said that New Zealand could also offer 
scholarship programs and exchanges for North Korean officials 
to learn English.  He reminded Christensen that many 
officials from the Vietnamese Foreign Ministry received 
English language training in New Zealand in the 1980s. 
 
MFAT Roundtable 
--------------- 
 
¶6.  (C)  MFAT Deputy Secretary John McArthur chaired a GNZ 
interagency roundtable with DAS Christensen, opening the 
meeting by characterizing the NZ-China FTA as the biggest 
step since the December 1972 establishment of diplomatic 
relations between the two countries.  New Zealand's profile 
in China will be raised as a result, continued McArthur, and 
small countries like New Zealand need to take advantage of 
such opportunities in today's global environment.  Following 
the signing of the deal the same day (April 7), said 
McArthur, the government will launch outreach events in New 
Zealand over the next several months to explain the 
agreement, address concerns, dispel rumors, and outline 
opportunities to New Zealand businesses.  The next procedural 
step will be to forward the agreement to Parliament; with the 
two main political parties (Labour and National) supportive 
of the deal, it will go through, he added.  New Zealand 
missions in key capitals have briefed counterparts in foreign 
trade offices in Washington, Canberra, Brussels, Seoul and 
Tokyo. 
 
¶7.  (C)  DAS Christensen explained that, to appreciate 
US-China relations, it is important to look at the 
improvements in the relationship over time, and not as a 
snapshot.  USG objectives are to shape China's choices -- 
both regionally and around the world.  The USG is not, he 
emphasized, trying to contain China.  Christensen rehearsed 
his earlier observations regarding specific countries (North 
Korea, Sudan, Burma, Iran), noting that China recently has 
shown a willingness on important occasions to move away from 
its policy of non-interference in the domestic affairs of 
friendly governments after seeing that such a policy does not 
always produce needed results for China's diplomacy. 
 
¶8.  (C)  McArthur observed that Chinese economic growth is 
fueling military expenditures of a non-transparent nature, 
and asked DAS Christensen to comment on China's emergence as 
a military power in the region and implications for Taiwan. 
 
WELLINGTON 00000140  003 OF 005 
 
 
Christensen confirmed that the USG views with seriousness 
China's military buildup.  China is developing forces that 
could pose challenges to other forward deployed forces, he 
said.  We would like to know much more than we do about these 
deployments.  Also unclear are the doctrinal shifts within 
the military that might be occurring as China acquires new 
equipment.  The USG response is to keep our own presence and 
alliances strong, continued Christensen, while increasing 
military-to-military contacts and dialogue with China. 
 
¶9.  (C)  Deputy Secretary McArthur said that China has been 
courting New Zealand in its military relations, offering 
language training for New Zealand defense attaches, contacts 
at the Ministerial level, and exchange of ship visits.  Such 
contacts date to the late 1980s, but New Zealand is 
approaching China in a "clear eyed" sort of way, explained 
McArthur, recognizing China's size but also the potential for 
Chinese behavior to "become ugly."  It makes sense for New 
Zealand to have contacts and remain plugged in, the Deputy 
Secretary continued, not that New Zealand necessarily sees a 
 
SIPDIS 
role for itself.  Christensen observed that New Zealand has 
had some genuine Chinese warfighters visit New Zealand and 
not just the respectable faces Beijing deploys to western 
countries.  McArthur responded that China uses Australia and 
New Zealand as a "testing ground" for such visits. 
 
¶10.  (C)  Moving to Taiwan, McArthur asked DAS Christensen to 
discuss next steps for Taiwan in its relations with Beijing. 
Christensen observed that the recent Taiwanese elections 
provide the potential for a return to positive momentum in 
areas such trade and tourism, and a degree of relaxation on 
the mainland could manifest itself.  The 
Taiwanese public rejected the referendum on applying to the 
UN under the name Taiwan, which should reduce the military 
threat to Taiwan, and could make it possible for the United 
States and like-minded states to push more effectively for 
greater space for Taiwan in international organizations.  In 
response to a question as to how well China understands 
the countervailing forces in Taiwan, Christensen said that 
there are some mainland officials who understand Taiwan much 
better than they used to.  John McArthur allowed that the 
Chinese Ambassador in Wellington came in on instructions 
following the March 22 election of Ma Ying-jeou.  Although 
the Ambassador gave a reasonably stolid representation, said 
McArthur, Beijing was clearly relieved at the results.  One 
of the key points centered on China's continuing concern 
about the outgoing regime.  Christensen said that the USG 
position to Beijing regarding the recent Taiwanese elections 
is that it is best for China to simply wait out President 
Chen Shui-ban's administration and to focus on the future 
administration in Taiwan.  The USG message is that Beijing's 
continued squeezing of Taiwan in the international arena only 
leads to a more confrontational response by Taiwan's public. 
 
¶11.  (C)  With respect to the Pacific Islands, MFAT's Stuart 
Horne noted that, with 8 countries recognizing Beijing and 6 
countries linked to Taiwan, the battle lines are pretty 
evenly drawn.  China's objective is to limit Taiwanese space 
in the Pacific and a few million dollars can make a huge 
difference in countries where the population may be in the 
several tens of thousands of people.  McArthur added that 
China wants to be seen as a credible player in the Pacific, 
and New Zealand tries to move Beijing to follow the Paris 
Principles with respect to aid and development.  The 
increased numbers of mainland Chinese and Taiwanese in the 
region have added to tensions, particularly in the Solomon 
Islands, he added, but at least China recognizes that is 
acceptable to have a conversation on their role in the 
Pacific.  In addition to China and Taiwan, however, Cuba and 
Venezuela have entered the picture, remarked McArthur. 
 
¶12.  (C)  DAS Christensen offered that the USG does not get 
involved in the sovereign state debate but cares very much 
about its effect on undermining governance in the region; 
Undersecretary Henrietta Fore is planning to visit Beijing to 
engage with the Chinese on assistance issues.  The USG would 
like China to accept the Paris Principles and work 
cooperatively with multilateral institutions, added 
Christensen.  China is not well-organized internally on 
foreign assistance and has a multitude of actors; the MFA is 
not in the lead. 
 
¶13.  (C)  Deputy Secretary McArthur briefed DAS Christensen 
 
WELLINGTON 00000140  004 OF 005 
 
 
on recent discussions between New Zealand and China on Tibet. 
 He noted that had it not been for the deaths in Lhasa, the 
signing of the NZ-China FTA and associated bilateral dialogue 
might have gone reasonably smoothly.  There was strong 
pushback from the Chinese following the 
New Zealand Parliamentary statement in which the Chinese used 
very personal language against the PM.  The GNZ did not 
publicize it, but MFAT called in the Chinese Ambassador to 
underscore New Zealand's unhappiness.  Christensen offered 
that the problem will persist until the Olympics unless 
Beijing decides to take positive action by reaching 
out to the Dalai Lama and having discussions on religious 
freedom and greater Tibetan autonomy.  The Dalai Lama 
actually has met all of Beijing's conditions: he has 
consistently stated that he does not pursue independence, and 
he has rejected violence repeatedly, said Christensen. 
McArthur noted that the Chinese have demonized the Dalai Lama 
in a very public way, which makes it difficult to enter into 
a dialogue with him. 
 
Discussion with MOD Assistant Secretary John McKinnon 
--------------------------------------------- -------- 
 
¶14.  (C)  DAS Christensen and MOD CEO and Secretary John 
McKinnon (a former New Zealand ambassador to China) had a 
useful exchange on New Zealand's mil-to-mil relationship with 
China.  McKinnon said that there is a certain amount of 
"defense diplomacy" but he's not certain it amounts to much 
substance nor provides great insights.  Generally, the 
Chinese approach New Zealand in tandem with Australia, he 
said, and there are two types of mil-to-mil contacts: 
high-level visits by military leaders as well as conventional 
visits such as the Chinese ship visit of last year.  New 
Zealand and China participated in a search and rescue 
exercise in the Tasman Sea with Australia; it was not of 
profound importance, observed McKinnon, but the fact that it 
took place at all was significant.  Most of the senior GNZ 
defense officials have been to China but the Secretary 
characterized these as standard tours.  That said, GNZ 
contacts promote confidence building and provide an 
opportunity for New Zealand to press China on transparency 
issues, but McKinnon stressed that he would hesitate to say 
that there's more to the mil/mil relationship than that. 
China's ability to mix with other countries more readily 
suggests a growing confidence level.  He added that the 
People's Liberation Army has asked New Zealand to send "more 
operational" people on staff exchanges; China is sending 
staff-level officers so New Zealand is expected to 
reciprocate.  McKinnon added that due to personnel 
limitations, a GNZ response will be incremental. 
 
¶15.  (C)  The US faces the same issue, noted DAS Christensen, 
who added that the Chinese sent to the US often speak in the 
abstract; the conversation is too one-sided as the Chinese 
always want to quiz US operators on practicalities.  The USG 
is trying to establish better and more reciprocal mil-to-mil 
linkages, remarked DAS Christensen, who informed the MOD 
official that the US would start a nuclear dialogue with 
China focused on the historical lessons of crisis management 
involving nuclear powers; there would be no weapons-specific 
discussion in this dialogue.  The US also conducts exercises 
with the Chinese, and Christensen mentioned recent search and 
rescue operations in the South China Sea as well as off the 
western US coast. 
 
¶16.  (C)  McKinnon offered that the high-level Chinese 
military visits are carefully calibrated, and Chinese 
officials say what they are permitted to stay within certain 
parameters -- there is not great insight as a result but 
occasional frankness, he added.  DAS Christensen observed 
that some of the Chinese military officials to visit New 
Zealand have been military leaders with operational 
portfolios and genuine military knowledge.  He added that 
recent visits to China by senior PACOM officers have resulted 
in entry to some new sites and submarines, as well as 
agreement to establish a defense hotline.  McKinnon asked 
about Chinese reaction to the Pentagon's annual white paper 
on Chinese military capability.  Christensen responded that 
the reaction is always vitriolic, but expected by Washington; 
the Chinese realize that it is a Congressionally mandated 
report and that we have no choice but to provide one on 
schedule. 
 
 
WELLINGTON 00000140  005 OF 005 
 
 
¶17.  (C)  McKinnon asked about the spectrum of views within 
Washington regarding China policy.  Christensen said that 
within the interagency, there is good consensus that the USG 
needs to remain prudent and cautious; accusations that the 
USG is trying to contain China are erroneous.  Maintaining 
USG military strength is one factor in shaping China's 
choices and is not at all at odds with the engagement 
strategy.  McKinnon said that New Zealand's mil-to-mil 
relations with Japan are also improving.  DAS Christensen 
noted that China is concerned about encirclement, so pursues 
more improved bilateral relations with Korea, India, and 
Japan.  Any perceived enhancement of GNZ-GOJ relations will 
likely spur the Chinese to respond in kind to the Japanese, 
offered Christensen, so New Zealand can play a positive role 
in encouraging better Sino-Japanese relations by improving 
its own relationship with Japan. 
 
¶18.  (C)  Responding to questions on Tibet, Christensen 
emphasized the importance of like-minded countries sending 
similar private messages to Beijing, although he estimated a 
20-30 percent chance of success in moving the Chinese 
government towards a constructive dialogue with the Dalai 
Lama.  Christensen characterized Beijing's vilification of 
the Dalai Lama as a public relations nightmare.  Some Chinese 
academics who are politically well connected with Chinese 
authorities understand the situation; others, however, are 
unaware of the Dalai Lama's position on Tibetan issues 
because they have only heard the Beijing propaganda, remarked 
Christensen.  DAS Christensen allowed that the Chinese had 
exercised some restraint in handling the riots in Lhasa, 
using water cannons and armored personnel carriers instead of 
sending in tanks.  Moving the Chinese to successfully address 
this issue in the lead up to the Olympics will be a 
challenge, both DAS Christensen and McKinnon agreed. 
 
Comment 
------- 
 
¶19.  (C)  Despite the absence of a number of GNZ officials 
who had traveled to Beijing for the NZ-China FTA signing, 
DAS Christensen nevertheless had a useful set of meetings, 
and addressed an audience hosted by the New Zealand Institute 
for International Affairs (NZIIA).  GNZ interlocutors greatly 
appreciated Christensen's overview of US policy towards 
China.  GNZ views track well with our own, and New Zealand 
officials agree that an engaged China is more likely to play 
a positive role in the Pacific region as well as in global 
affairs.  To that end, they will continue to be willing 
partners in coordinating messages to Beijing on a range of 
issues, and New Zealand's new trade status with China ensures 
their voice is heard.  GNZ officials are realistic, however, 
as to how much weight is accorded to their views, but see 
engagement as the best means of potentially influencing 
Chinese actions.  All DAS Christensen's interlocutors 
underscored a strong desire for the USG to play a role in the 
East Asia Summit (EAS), to which Christensen responded by 
noting that USG engagement remains strong in the region and 
that the USG will continue to look for practical ways to 
engage diplomatically with regional actors.  End Comment. 
 
¶20.  (U)  DAS Christensen has cleared this message. 
KEEGAN