VZCZCXRO9180
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4453/01 3400838
ZNR UUUUU ZZH
P 050838Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 1249
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHIN/AIT TAIPEI 7129
RUEHKO/AMEMBASSY TOKYO 2320
RUEHUL/AMEMBASSY SEOUL 1006
RUEHMO/AMEMBASSY MOSCOW 9150
RUEHGV/USMISSION GENEVA 2312
RUEAHLC/DHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMCSUU/FBI WASHINGTON DC

UNCLAS SECTION 01 OF 03 BEIJING 004453 
 
SENSITIVE 
SIPDIS 
 
State for EAP/CM - SFlatt, PPark 
State for EEB/CIP - SFlynn, FSaeed, DGross 
USTR for China Office - Awinter, JMcHale, AMain 
Commerce for National Coordinator for IPR Enforcement 
Commerce for MAC ESzymanski, JYoung 
LOC/Copyright Office - STepp 
USPTO for Int'l Affairs - LBoland, EWu 
DOJ for CCIPS - MDubose and SChembtob 
FBI for LBryant 
 
E.O. 12958: N/A 
TAGS: ETRD PGOV PHUM SOCI SCUL KIPR ECON CH
SUBJECT: U/S JEFFERY AND SCIO AGREE TO FUTURE 
DISCUSSIONS ON INTERNET FREEDOM 
 
This cable is sensitive but unclassified and is not 
for Internet distribution. 
 
Summary 
------- 
 
¶1. (SBU) Under Secretary of State Reuben Jeffery, III 
met with State Council Information Office Vice 
Minister Cai Mingzhao on December 3 to discuss China's 
Internet administration and information access 
policies.  The two hailed the success of industry 
cooperation in the U.S.-China Internet Summit, and 
agreed to explore adding a government-to-government 
component to the annual meetings to discuss topics of 
common interest as well as sensitive issues, including 
online security, copyright protection, and open access 
to the Internet.  While Cai deftly handled questions 
on China's Internet censorship, he did agree to 
further discussions on the topic.  Cai confirmed that 
his agency will take over responsibility for 
regulating foreign financial information providers. 
End Summary. 
 
Support for Continuation of SED Framework 
----------------------------------------- 
 
¶2. (SBU) State Council Information Office (SCIO) Vice 
Minister Cai Mingzhao and Under Secretary of State for 
Economic, Energy, and Agricultural Affairs Reuben 
Jeffery, III met in Beijing on December 3, the eve of 
the Fifth U.S.-China Strategic Economic Dialogue (SED). 
Both acknowledged that the profile and importance of 
the event were raised against the backdrop of the 
global financial crisis. 
 
Agreement on Continued Internet Cooperation 
------------------------------------------- 
 
¶3. (SBU) Cai and Jeffery agreed that broad 
complementarities exist between the Chinese and U.S. 
Internet industries that should be further explored 
and developed in cooperation between governments, 
between businesses, and in public-private forums.  Cai 
said that Chinese companies have learned a great deal 
from their U.S. counterparts.  Whereas the U.S. 
Internet industry leads the world in its capacity for 
research and development, Cai noted, China is the 
world's largest market for the application of Internet 
technologies, with nearly 300 million Internet users 
and growing at approximately 240,000 new users per day. 
He added that China welcomes foreign enterprises to 
enter the Chinese market to share this huge 
opportunity, and said he is pleased that so many U.S. 
businesses already claim China as their fastest 
growing market. 
 
¶4. (SBU) Cai thanked Jeffery for his participation as 
keynote speaker at the first U.S.-China Internet 
Summit (where Cai and Jeffery first met), hosted by 
the Internet Society of China and Microsoft in 
November 2007 in Seattle.  He said the summit has 
resulted in increased engagement between U.S. and 
Chinese Internet companies over the past year.  Cai 
noted that the second Internet Summit, held in 
Shanghai on November 7, was also a success.  Jeffery 
emphasized the importance of high-tech and telecom 
industries in improving lives, linking China and the 
United States, and generating robust economic growth. 
 
¶5. (SBU) Jeffery proposed and Cai agreed that both 
sides should identify areas of mutual interest for 
 
BEIJING 00004453  002 OF 003 
 
 
future collaboration.  Jeffery suggested that upcoming 
discussions could include online security and law 
enforcement, in particular efforts to combat viruses, 
online fraud, spam email, and also to protect 
copyrighted material on the Internet. 
 
Expand Industry Forums to Include Government 
-------------------------------------------- 
 
¶6. (SBU) Cai and Jeffery also agreed that the existing 
industry-led U.S.-China Internet Summit might be 
expanded to include a bilateral government component. 
Cai said that, while Chinese and U.S. Internet 
enterprises enjoy a mutually beneficial relationship, 
differences remain - not only in geography and time 
zones, but also cultural and historical differences. 
As a result, he said, it is natural for the two 
countries to have different views on the Internet and 
its regulation.  These differences, Cai continued, can 
be addressed in a "cool-minded way" by increasing 
engagement and dialogue.  Therefore, he concluded, it 
is very important to continue to support the Internet 
Summit on a regular basis, and to leverage the event 
as a platform for further government-to-government 
dialogue to increase mutual understanding.  As an 
example, he offered that U.S. Government officials 
should visit Chinese domestic Internet companies, 
which he said are "open and transparent, like the 
Internet itself." 
 
¶7. (SBU) Jeffery agreed, and raised open access to 
information as another mutually beneficial goal that 
might be discussed in such future bilateral meetings. 
He stressed the U.S. Government's interest in better 
understanding China's Internet access regulations and 
policies, and how such policies are made.  Jeffery 
said he recognized the two countries' differing views 
on the issue, but hoped they could work together 
toward greater mutual understanding and transparency. 
 
¶8. (SBU) Cai seized on Jeffery's comments and spoke at 
length without pausing for his interpreter.  He agreed 
on the importance of exchanging views in the area of 
Internet administration.  In recent years, Cai said, 
the Chinese government has focused on how to best 
adopt the experiences and practices of other countries, 
and has sent teams abroad to study relevant foreign 
laws and regulations.  They have found, he said, that 
all countries set Internet policies based on their own 
national conditions.  Nevertheless, he concluded, 
dialogue and discussion are always valuable, no matter 
how our two countries' individual views on this issue 
may differ. 
 
¶9. (SBU) Cai continued that the Chinese Government 
shares its industry's interest in achieving concrete 
results from future Internet Summits.  Cai expressed 
his preference to hold the next meeting in Washington, 
DC or New York.  He assured Jeffery that all relevant 
Chinese Government representatives will also attend, 
and will hope to use the opportunity to meet with 
their U.S. Government counterparts, perhaps in a 
closed-door session during the summit.  Jeffery agreed, 
and urged both sides to work to identify areas of 
common interest, including greater access to 
information, in the time before the next meeting.  Cai 
committed his Internet Affairs Bureau (SCIO's so- 
called Bureau Five) to work with Embassy officials on 
this issue. 
 
SCIO to Regulate Financial Information Providers 
 
BEIJING 00004453  003 OF 003 
 
 
--------------------------------------------- --- 
 
¶10. (SBU) In response to Jeffery's inquiry as to 
whether SCIO would in fact be named the new regulator 
of financial information providers, Cai confirmed that 
his organization will take over this role from China's 
Xinhua News Agency.  The change, he said, is based on 
the agreement reached between the United States, China, 
and the European Union at the World Trade Organization 
in Geneva.  However, Cai said that this change is 
still in the approval process, and explained that it 
will not be final until the State Council promulgates 
a new regulation to shift regulatory responsibility 
from Xinhua.  Following that, he added, the new 
positions will be set up within SCIO, and internal 
regulations will be amended as necessary to complete 
the change.  Jeffery hailed the result of the WTO 
process as a good example of multilateral cooperation 
and offered U.S. Government assistance as SCIO develops 
its new regulatory responsibilities in this area.  Cai 
said the Chinese Government places great importance on 
this issue. 
 
Meeting Participants 
-------------------- 
 
¶11. (SBU) United States Participants: Under Secretary 
of State for Economic, Energy, and Agricultural 
Affairs Reuben Jeffery, III; Special Assistant Hugo 
Yon; Embassy Economic Officer Geoffrey Siebengartner; 
interpreter.  Chinese Participants: State Council 
Information Office Vice Minister Cai Mingzhao; SCIO 
Internet Affairs Bureau Deputy Director General Liu 
Zhenrong; Internet Affairs Bureau Director Gao Jianyun; 
China Internet Media Research Center Director Zhao 
Jianguo; interpreter. 
 
¶12. (U) U/S Jeffery has cleared this cable.