VZCZCXRO3541
OO RUEHAST RUEHCN RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
RUEHVC
DE RUEHBJ #4394/01 3370521
ZNR UUUUU ZZH
O 020521Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1157
RHEHNSC/NSC WASHDC IMMEDIATE
RUEAEPA/HQ EPA WASHDC IMMEDIATE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHBY/AMEMBASSY CANBERRA 9640
RUEHOT/AMEMBASSY OTTAWA 4070

UNCLAS SECTION 01 OF 02 BEIJING 004394 
 
STATE FOR OES, OES/EGC, OES/ENV, EAP/CM/HABJAN/FLATT, 
EEB/ESC/HENGEL, EEB/ESC/IEC/ENR/HENRY/SECOR 
TREASURY FOR OASIA/ISA/DOHNER/HOLMER/WRIGHT 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: SENV ECON ENRG EPET EMIN KCOR CH CA AS
 
SUBJECT: China reluctant to engage on EITI 
 
REF: STATE 115798 
 
Summary 
------- 
¶1. (SBU) Begin Summary. Post delivered background paper in 
reftel demarche by fax to the Ministry of Foreign Affairs 
(MFA) International Affairs Division, the National Energy 
Administration (NEA) International Cooperation Division, 
and the Ministry of Land and Resources (MOLAR) 
International Cooperation Division following several weeks 
of attempting to meet in person with the above agencies. 
Each of the agencies we have attempted to engage has been 
reluctant to discuss the Extractive Industries Transparency 
Initiative (EITI) with econoffs.  Chinese officials have 
informed us that EITI is a sensitive issue for China, as it 
addresses not only overseas oil and gas exploration, but 
also mining activities.  Although MFA has been designated 
as our primary point of contact on this issue, multiple 
government agencies and state-owned enterprises have 
interests in EITI.  Given the number of stakeholders and 
sensitivities toward EITI, it appears that future 
discussions with China on EITI are likely to move ahead at 
a slow pace.  End Summary. 
 
 
MFA to be point of contact on EITI 
---------------------------------- 
 
¶2. (SBU) Post delivered background paper in reftel demarche 
by fax to the Ministry of Foreign Affairs (MFA) 
International Affairs Division, the National Energy 
Administration (NEA) International Cooperation Division, 
and the Ministry of Land and Resources (MOLAR) 
International Cooperation Division following several weeks 
of attempting to meet in person with the above agencies. 
Through our efforts to deliver reftel points and to discuss 
a reference to the Extractive Industries Transparency 
Initiative (EITI) in the Strategic Economic Dialogue (SED) 
outcomes document, post learned that the Chinese government 
has now assigned MFA as the primary point of contact for 
future EITI discussions. 
 
EITI considered a sensitive issue 
--------------------------------- 
 
¶3. (SBU) All three organizations declined to meet with 
econoff to discuss reftel points.  MFA noted that this is a 
sensitive issue and that MFA is only able to discuss EITI 
in the multilateral context.  An econ contact at the 
National Development and Reform Commission (NDRC) told us 
that EITI is a particularly complicated issue for China 
because it not only addresses oil and gas exploration, but 
also overseas mining activities.  MOLAR echoed this view, 
telling us that they welcome engagement with the U.S. on 
other topics, but they are not able to discuss with us 
Chinese views on this issue. 
 
¶4. (SBU) Econoffs met with Australian and Canadian Embassy 
counterparts in mid-November to discuss their perceptions 
of China's willingness to engage on the EITI.  AusAID 
Development and Cooperation Counselor told econoff that 
Australia's Department of Foreign Affairs and Trade (DFAT) 
has not been engaged with China on the EITI, but noted that 
Australia supports the EITI and shares U.S. concerns about 
promoting transparency in resource rich developing 
countries.  Australia is particularly concerned about 
Chinese extractive industries' overseas activities in the 
East Asian and Pacific region, especially in Papua New 
Guinea. She pointed out that China has welcomed a variety 
of training programs supported by AusAID and other foreign 
assistance providers, and suggested that it might be 
worthwhile to consider using the EITI trust fund to support 
training opportunities that would promote Chinese 
understanding of the EITI. 
 
¶5. (SBU) Canadian Embassy trade officer told econoffs that 
China is unlikely to take any actions that could limit its 
ability to access mineral and energy resources overseas. 
 
BEIJING 00004394  002 OF 002 
 
 
In his view, multilateral engagement with China on EITI 
will have to be undertaken through a long-term, progressive 
approach in order to be effective.  Canada has built 
relationships with government officials involved in the 
extractive sector at the central and local level by 
supporting programs to improve enhance extractive 
industries' corporate responsibility. 
 
Comment 
------- 
 
¶6. (SBU) Comment:  Although MFA has been designated as our 
primary point of contact on this issue, many powerful 
government entities have dogs in this fight.  NEA and 
MOLAR play major roles in energy and mining policy making, 
and play a role in developing China's official position on 
EITI.  Large, important state-owned enterprises active 
abroad, including oil/gas and mining companies, also 
provide significant input on this issue.  The Chinese 
government has to consider and coordinate all of these 
viewpoints when engaging with us on EITI.  It appears that 
future discussions are likely to move ahead at a slow pace. 
Cooperation with like-minded countries and the EITI 
Secretariat may be useful in bringing EITI to the 
attention of the appropriate Chinese leaders and 
encouraging China's support for the EITI in countries 
where Chinese extractive industries are active. End 
Comment. 
 
RANDT