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UNCLAS SECTION 01 OF 03 BEIJING 002653 
 
SENSITIVE 
SIPDIS 
 
STATE FOR E, H, EAP, EAP/CM 
STATE PASS USTR FOR TIM STRATFORD, ANN MAIN, JEAN GRIER 
DOC FOR IRA KASOFF, NICOLE MELCHER, MAC 
TREASURY FOR OASIA/DOHNER/WINSHIP 
GENEVA PASS USTR 
NSC FOR LOI 
 
E.O. 12958: N/A 
TAGS: ETRD EFIN ECON PREL WTRO CH
SUBJECT: SENATOR CANTWELL SEP 4-5 VISIT TO BEIJING 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY. 
 
¶1. (SBU) Summary.  Senator Cantwell (D-WA) visited Beijing 
September 4-5, 2009, meeting with State Council Vice Premier 
Wang Qishan and NDRC Vice Chairman Xie Zhenhua.  The Senator's 
key message to policy makers here was that although the U.S. and 
China together created 40 percent of the world's greenhouse gas 
emissions, putting a price on that emitted carbon would create 
an enormous market opportunity for both the U.S. and Chinese 
economies.  Cantwell also met with U.S. industry representatives 
to discuss intellectual property rights.  End Summary. 
 
State Council Vice Premier Wang Qishan 
-------------------------------------- 
¶2. (SBU) In her September 4 meeting with State Council Vice 
Premier Wang Qishan, Senator Cantwell expressed hope that U.S.- 
China relations would maintain the positive momentum begun at 
the inaugural meeting of the Strategic and Economic Dialogue 
(S&ED).  Cantwell noted that though the U.S. and China together 
created 40 percent of the world's greenhouse gas emissions, 
addressing this challenge offers important market opportunities 
for U.S. and Chinese firms.  Cantwell urged China to reduce 
tariffs on green products and services, saying doing so would 
set a powerful example for other nations.  Cantwell asked VP 
Wang how best to move forward under the memorandum of 
understanding (MOU) initialed at the inaugural meeting of the 
S&ED.  Wang responded by calling for a "positive, cooperative, 
and comprehensive" relationship, noting that her follow-on 
meeting National Development and Reform Commission (NDRC) Vice 
Chairman Xie Zhenhua will allow greater discussion of 
cooperation on energy and environment matters. 
 
¶3. (SBU) Wang stated that current development models can no 
longer be sustained environmentally by the earth.  He noted 
India and China's combined population alone would exceed 2.5 
billion by 2025, a significant percentage of the globe, and 
argued that international aspirations for addressing climate 
change expressed in the Kyoto Protocol and Bali Roundup cannot 
be attained without U.S. agreement.  Wang said that while 
developing countries could not leapfrog the industrialization 
phase to modernization, they must not repeat errors made under 
Western industrialization.  Chinese authorities thus have made 
the economic development model a paramount consideration. 
 
¶4. (SBU) Wang recounted the difficult decisions he took as mayor 
of Beijing, specifically in the run up to the 2008 Olympic Games 
when he ordered the closure of a chemical plant, employing 8,000 
workers, as well as relocation outside Beijing of iron and steel 
facilities.  Because of such difficult political considerations, 
Wang argued for "common but differentiated responsibilities" on 
environmental issues consistent with a global framework. 
Developed countries should take responsibility to fund and 
transfer at low cost environmental technologies to help 
developing countries, according to Wang.  Developed countries, 
he said, must pledge absolute reductions in emissions, while 
developing countries should commit to the slowing of emission 
output growth. 
 
¶5. (SBU) Wang next raised previously delivered points regarding 
the then-pending U.S. decision on whether to impose a trade 
remedy under the WTO special safeguard mechanism against Chinese 
exports of light vehicle tires.  Wang underscored U.S.-China 
cooperation to overcome the global economic downturn and the 
pledge at the last G-20 not to implement protectionist measures 
before the end of 2010.  Wang reiterated that, in the four cases 
brought under the Bush administration, the U.S. had refrained 
from invoking safeguards.  In this case, he said that the 
Chinese tire exports present no structural conflict with U.S.- 
produced tires, given their qualitative differences (Chinese 
tires were replacement tires whereas U.S. tires were high-end). 
Wang acknowledged U.S. President Obama was facing pressure from 
labor unions, but feared invocation of safeguards could be 
viewed as a negative barometer for the overall U.S.-China 
economic relationship. 
 
¶6. (SBU) Cantwell detailed her record on supporting measures in 
 
BEIJING 00002653  002 OF 003 
 
 
dealing U.S.-China economic matters, and queried Wang as to when 
he thought the safeguards should be used given their adoption at 
the WTO.  Wang called safeguards a product of "Cold War" 
mentality to be used as a "deterrent" whose usage would 
constitute a "trade atomic bomb," especially negative given the 
current economy.  Wang predicted if safeguards are invoked in 
this case, the precedent would be used by other industries and 
countries, leading to a dangerous "trade war." 
 
¶7. (SBU) Cantwell closed by arguing for greater access for U.S. 
firms in China's markets, specifically container shipping/port 
operations.  Cantwell noted that as China's state-owned COSECO 
shipping group had been granted rights to operate port terminals 
in Long Beach, CA, similar access should be granted to U.S. 
firms such as SSA Marine, which is striving to be the first U.S. 
port operator in China.  Wang pledged to consider the issue, but 
noted disparity exists in certain industries for China such as 
in the airline industry, where U.S. carriers far outcompete 
Chinese carriers in passenger volume. 
 
NDRC Vice Chairman Xie Zhenhua 
------------------------------ 
¶8. (SBU) In her meeting with NDRC Vice Chairman Xie Zhenhua, 
Senator Cantwell said the United States and China had made good 
progress on strengthening efforts to combat global climate 
change and promote green energy technologies, citing the recent 
MOU initialed at the S&ED.  She reiterated points on U.S.- 
China's responsibility for 40 percent of the world's greenhouse 
gas emissions and related market opportunities, particularly if 
that carbon had a price, again urging China to reduce tariffs on 
green products and services.  While agreeing U.S.-China 
cooperation on green energy had increased following the signing 
of the Ten Year Framework and MOU, Xie urged faster 
implementation of the agreements in order to show "concrete 
results."  He said that he would meet with Special Envoy for 
Climate Change Todd Stern in Washington on September 17 to 
formally sign the MOU and hoped the two sides could quickly 
decide on projects and begin to move forward.  Regarding trade 
in clean energy products and services, Xie stressed that China 
had an open attitude as long as the cooperation was mutually 
beneficial. 
 
¶9. (SBU) Xie pressed Cantwell on the prospects of the U.S. 
Senate passing a clean energy bill before the end of the 
year.  While noting that the recent House clean energy bill was 
more complex than needed, Cantwell expressed optimism that the 
Senate would be successful in passing a more streamlined 
bill.  She said Congress was aware that failure to act could 
result in the EPA taking unilateral action on limiting 
greenhouse gas emissions, which would lead to a less predictable 
outcome than a legislative solution.  Cantwell told Xie that 
conservative Senators would support a climate change bill if 
there was strong support for the nuclear energy industry.  Xie 
urged speedy passage of a climate change bill, saying it would 
send a positive signal ahead of the Copenhagen climate change 
talks in December.  He also agreed with Cantwell that U.S. 
businesses were worried about unpredictability and that a price 
on carbon was essential to create market incentives for industry 
to pursue innovative solutions. 
 
¶10. (SBU) Xie said China's policy of promoting greater energy 
efficiency and moving to a low carbon economy was clear and 
would not change.  He said Cantwell would see this commitment 
firsthand during her follow-on visit to Shanghai; he said the 
2010 World Expo would be the first 100 percent carbon neutral 
event of its kind.  Noting that China's 12th Five-Year Plan 
would include new "proactive" initiatives, Xie also indicated 
that China is likely to issue a new climate change plan before 
the Copenhagen meeting. 
 
Meeting with U.S. Industry and Associations 
------------------------------------------- 
¶11. (SBU) Cantwell closed her day of meetings with 
representatives from Microsoft, Cummins, AmCham, and the U.S. 
China Business Council.  Primarily discussing intellectual 
property rights issues, Cantwell heard strong consensus IPR 
 
BEIJING 00002653  003 OF 003 
 
 
infringement remains a critical threat for U.S. industry in 
China, and that U.S. innovation and intellectual property are 
the cornerstone of U.S. strategic economic advantage in the face 
of an ever-more-competitive, industrializing China.  Cantwell 
pledged to maintain vigilance and work with her Congressional 
counterparts to defend these and other U.S. interests. 
 
¶12.  (U) Senator Cantwell's delegation did not have an 
opportunity to clear this message. 
 
HUNTSMAN