VZCZCXRO2995
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2837/01 2040830
ZNR UUUUU ZZH
P 220830Z JUL 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 8703
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHOO/CHINA POSTS COLLECTIVE

UNCLAS SECTION 01 OF 02 BEIJING 002837 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM SECOR/YAMAMOTO 
STATE PASS USTR STRATFORD/MARUYAMA/KATZ 
USDOC FOR ITA/PADILLA 
USDOC FOR OGC/CLAFFEE/BLANK 
USDOC FOR ITA/MAC/KASOFF/MELCHER/KARNAK 
 
E.O. 12958: N/A 
TAGS: ETRD EINV EFIN CH
SUBJECT: U/S PADILLA PUSHES FOR LEGISLATIVE TRANSPARENCY 
 
THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED.  PLEASE HANDLE 
ACCORDINGLY.  NOT FOR DISTRIBUTION OUTSIDE USG CHANNELS. 
 
¶1. (SBU) Summary.  United States Department of Commerce 
(DOC) Under Secretary (U/S) Christopher Padilla and USTR 
General Counsel (GC) Warren Maruyama met with State Council 
Legislative Affairs Office (SCLAO) Vice Minister Zhang 
Qiong on July 16 to discuss SED 4 transparency initiatives 
and raise concerns over issues pertaining to China's 
release of draft postal, patent and telecom laws. VM Zhang 
agreed to a proposal by U/S Padilla and GC Maruyama that 
experts from the two sides hold technical discussions over 
the United States's concerns with each of the draft laws. 
VM Zhang also welcomed a United States proposal to 
reconvene the Intellectual Property Rights (IPR) Working 
Group under the Joint Commission on Commerce and Trade 
(JCCT) prior to the next JCCT in mid-September.  Noting the 
complexity of issues with China's draft telecom law, VM 
Zhang said it would be difficult to move the law forward to 
the National People's Congress (NPC) anytime soon.  VM 
Zhang also inquired about dates for the next United States- 
China Legal Exchange to discuss transparency issues and 
thanked the United States side for adding valuable input 
into drafting China's Antimonopoly Law (AML).  End Summary. 
 
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Implementing SED 4 Transparency Initiatives 
------------------------------------------- 
 
¶2. (SBU) VM Zhang opened by stating SCLAO plans to hold 
several meetings on transparency in preparation for the 
next United States-China Joint Legal Exchange and would 
follow through on commitments made at SED 4, but did not 
specifically mention which commitments.  Since returning 
from SED 4, Zhang said SCLAO sent a circular to Chinese 
ministries instructing them to submit draft ministerial 
rules for publication on the SCLAO website which would 
contain a direct link to the respective ministries legal 
departments in an effort to improve regulatory transparency. 
VM Zhang stated much work remains in implementing 
transparency initiatives, however, and welcomed further 
exchanges on effective methods for responding to the 
various public comments on recently released draft 
regulations.  U/S Padilla and GC Maruyama thanked VM Zhang 
for his efforts to improve regulatory transparency and 
stated China should expect more comments on draft 
regulations from the United States side as more regulations 
are publicized on Chinese government websites. 
 
----------------------------------------- 
The Draft Postal, Patent and Telecom Laws 
----------------------------------------- 
 
¶3. (SBU) U/S Padilla requested further clarification 
regarding China's draft Postal Law, particularly potential 
provisions that might exclude foreign freight forwarders 
from delivering documents within China.  U/S Padilla and GC 
Maruyama both emphasized that, should such a provision be 
included in the Postal Law, it could raise serious 
questions over China's commitment to national treatment in 
its WTO accession agreement.  In addition, such a provision 
would seem to be inconsistent with former Vice-Premier Wu 
Yi's previous JCCT commitments on express delivery. VM 
Zhang insisted that China's draft Postal Law is consistent 
with China's WTO commitments, stressing that express 
delivery would remain open to foreign firms, but that mail 
delivery would be subject to a monopoly, as it is in the 
United States and most other countries.  When pressed by 
U/S Padilla and GC Maruyama on the details and on 
distinctions between letter and document delivery, Zhang 
said that such questions would need to be addressed by 
experts.  He agreed to a suggestion that a discussion 
between United States and Chinese experts on these issues 
be arranged soon.  Stressing the importance of having such 
an exchange before the SCLAO forwards the draft law to the 
NPC, U/S Padilla said the United States side would provide 
a letter to Zhang as soon as possible outlining the United 
States's specific concerns so that China's experts would be 
prepared for a discussion. 
 
¶4. (SBU) VM Zhang welcomed both the idea of reconvening the 
JCCT IPR Working Group prior to the next JCCT meeting in 
mid-September and incorporating discussions on China's 
draft Patent Law within that IPR Working Group.  U/S 
 
BEIJING 00002837  002 OF 002 
 
 
Padilla thanked Zhang for responding to Under Secretary of 
Commerce and Director of the United States Patent and 
Trademark Office Jon Dudas' letter on the draft Patent Law 
and emphasized the need for further exchanges on the Patent 
Law prior to the draft Patent Law being passed to the NPC. 
U/S Padilla also conveyed Ambassador Randt's regards and 
expressed hope that VM Zhang would participate in the 
Ambassador's annual IPR Roundtable scheduled for later this 
fall. 
 
¶5. (SBU) In response to U/S Padilla's question about how 
the draft Telecom Law would lower capitalization 
requirements for establishing telecommunication companies, 
VM Zhang noted that the Telecom Law was extraordinarily 
complicated, involving everything from Internet, broadcast 
and television, to publishing.  Even though it had already 
been in the works for several years, much more interagency 
coordination and consultation would be needed before it 
would be ready to be forwarded to the NPC.  Zhang noted 
that the United States has over 100 years experience in the 
area of telecommunicaton, compared with China's several 
years exeriene, hence China would need more time to 
ormulate a telecom law acceptable to all parties 
 
---------------------------------- 
United States-China Legal Exchange 
---------------------------------- 
 
¶6. (SBU) Zhang praised previous United States-China legal 
exchanges and inquired as to when the Department of 
Commerce-led United States-China Joint Legal Exchange would 
next be held.  U/S Padilla said the dates for such an 
exchange were not yet confirmed.  He also suggested that 
when the next round is held, he would be happy to 
facilitate meetings between VM Zhang and other relevant 
United States authorities within the Department of Commerce, 
United States Trade Representative, and the Office of 
Management and Budget to explain how the United States 
ensures legislative and regulatory transparency and discuss 
ways China can implement transparency initiatives.  Zhang 
praised the Joint Legal Exchange as an effective means to 
further cooperation and welcomed the opportunity to 
participate.  He also thanked the United States side for 
adding valuable input into drafting China's Antimonopoly 
Law. 
 
¶7. (U) U/S Padilla and GC Maruyama were accompanied by 
AUSTR for China Tim Stratford and DOC Deputy Assistant 
Secretary Ira Kasoff.  VM Zhang was accompanied by SCLAO 
Director-General of Foreign Affairs Wu Hao, Deputy 
Director-General of Industry, Communication, and Commerce 
(ICC) Guo Qiwen, Division Director of ICC Zhang Yaobo, and 
Division Director of the General Office Hu Zhenjin. 
 
¶8. This cable has not yet been cleared by U/S Padilla or GC 
Maruyama. 
 
#Randt