VZCZCXRO9406
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1120/01 1170622
ZNY CCCCC ZZH
O 270622Z APR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3668
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHUNV/USMISSION UNVIE VIENNA 1387

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 001120 
 
SIPDIS 
 
STATE FOR EAP/CM, ISN 
 
E.O. 12958: DECL: 04/27/2034 
TAGS: PARM PREL MNUC IAEA CH IR NK
SUBJECT: U.S. UNVIE AMBASSADOR SCHULTE AND PRC DG CHENG 
DISCUSS FUEL ISSUES, IAEA REFORM, NORTH KOREA AND IRAN 
 
Classified By: Political Minister Counselor Aubrey Carlson. 
Reasons 1.4 (b) and (d). 
 
SUMMARY 
------- 
 
¶1.  (C) In Beijing to represent Energy Secretary Chu at the 
April 20-24 International Nuclear Energy Ministerial, U.S. 
Ambassador to UNVIE Greg Schulte met with MFA Arms Control 
and Disarmament Department Director General Cheng Jingye on 
April 22.  Ambassador Schulte complimented DG Cheng for 
China's role in sponsoring a successful Ministerial.  On 
nuclear fuel assurance issues, DG Cheng said China was 
"open-minded" about fuel bank proposals, stressing that the 
positive aspects of a dependable and "impartial" nuclear fuel 
supply source should be emphasized with developing countries. 
 China was open to "balanced and justified" International 
Atomic Energy Agency (IAEA) budget increases, Cheng said, but 
played coy when asked to indicate who China would support in 
the upcoming election for IAEA Director General.  On North 
Korea, Cheng said China saw the United States playing the 
central role in "de-escalating" the situation and bringing 
North Korea back to the Six-Party Talks after a "cool down 
period."  Underscoring the fact that the United States wanted 
the Chinese to use its influence to prod Iran to agree to the 
recent E3-plus-3 overture, Cheng said China was "cautiously 
optimistic" on Iran.  Finally, Cheng agreed "we should find a 
way" to resolve Kazakhstan's inability to find a welcoming 
regional grouping within the IAEA.  End Summary. 
 
ENERGY MINISTERIAL 
------------------ 
 
¶2. (C) Ambassador Schulte complimented Cheng for China's role 
in holding the Nuclear Energy Ministerial.  Noting that 
participation was greatly improved since the last Ministerial 
held in Paris, Schulte said it reflected the growing 
worldwide interest in nuclear power.  The message he 
delivered on behalf of Secretary Chu to the Ministerial, 
Schulte said, was threefold: the new U.S. administration 
believed nuclear energy was important; it was critical to 
secure global collaboration in the Global Nuclear Energy 
Partnership (GNEP); and the International Atomic Energy 
Agency (IAEA) played an important role in the process. 
 
GNEP AND FUEL ASSURANCE ISSUES 
------------------------------ 
 
¶3. (C) Cheng commented that, of the dozens of ideas "out 
there" on nuclear fuel cycle issues, the U.S.-sponsored GNEP 
"is the only one China had decided to be a part of."  In 
response to Cheng's question about the U.S. policy review of 
GNEP,  Schulte noted that the U.S. Department of Energy was 
holding an internal, science-based review of options for the 
GNEP steering group, including how to best structure the 
international fuel cycle and related internal working groups. 
 Secretary Chu had been briefed on China's involvement and 
support in the GNEP, Schulte remarked. 
 
¶4. (C) Raising fuel assurance issues, Schulte cited President 
Obama's remarks about fuel banks being an important tool to 
promote nonproliferation and to prevent the spread of 
enrichment technologies by providing a reliable fuel source 
to developing countries.  Schulte said the U.S. hoped there 
would be a "good discussion" of fuel bank and other proposals 
at the June IAEA Board of Governors meeting.  Cheng replied 
that China was "open-minded" about these ideas.  To overcome 
the widespread impression evinced in previous discussions 
that interested countries would have to forgo their rights, 
Cheng suggested the emphasis at the June meeting should be 
placed on the benefits, encouraging nations to support fuel 
banks and not develop their own facilities or capabilities. 
 
¶5. (C) Cheng said China supported IAEA Director General El 
Baradei's approach on fuel assurance issues, including the 
need to ensure the "impartiality" of an international fuel 
supply.  Schulte was pleased to hear of China's support, 
saying China's views "carry a lot of weight in the IAEA." 
 
IAEA DIRECTOR GENERAL ELECTION 
------------------------------ 
 
¶6. (C) Ambassador Schulte noted the recent stalemate in the 
election a new IAEA Director General, and after running 
through the list of potential candidates asked Cheng for 
China's views.  Cheng played coy, only noting China had been 
approached by several countries asking for support for 
particular candidates.  Schulte stressed that the United 
States sought a good leader with substantial management 
 
BEIJING 00001120  002 OF 002 
 
 
skills and a strong nuclear background. 
 
IAEA BUDGET 
----------- 
 
¶7. (C) Turning to the IAEA budget, Schulte said the United 
States would be seeking to ensure the IAEA "had the resources 
it needed" and hoped countries wouldn't seek to do "business 
as usual."  Cheng replied that China could support "justified 
and balanced" increases in the budget.  Schulte noted the 
United States sought to make nuclear security a "core 
function" of the IAEA rather than one funded on an ad hoc 
basis. 
 
NORTH KOREA AND IRAN 
-------------------- 
 
¶8. (C) Schulte raised the likelihood of discussions on North 
Korea and Iran at the June IAEA Board of Governors meeting. 
Saying he "hoped there wouldn't be too much discussion of 
North Korea," Cheng suggested it was largely up to the United 
States to "de-escalate" the current situation and bring North 
Korea back to the Six-Party Talks after a "cool-down" period. 
 
 
¶9. (C) Schulte noted China's important role in getting Iran 
to agree to the recent E3-plus-3 overture.  Cheng replied 
China was "cautiously optimistic" on Iran, but would need to 
"wait and see" how things went. 
 
KAZAKHSTAN IAEA ROLE 
-------------------- 
 
¶10. (C) Schulte noted Kazakhstan's ongoing difficulty finding 
a welcoming regional grouping within the IAEA and how that 
prevented Kazakhstan from gaining a seat on the Board of 
Governors.  Asked whether China might agree to Kazakhstan 
being a part of the East Asia grouping with China, Cheng 
would only say that China agreed "we should find a way out" 
of the current situation. 
PICCUTA