VZCZCXRO9124
PP RUEHCHI RUEHCN RUEHDT RUEHFK RUEHGH RUEHHM RUEHKSO RUEHNAG RUEHNH
RUEHPB RUEHVC
DE RUEHBJ #2849/01 2862310
ZNR UUUUU ZZH
P 132310Z OCT 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 6397
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 04 BEIJING 002849 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/FO TONG 
ALSO FOR EAP/EP STEELE, EEB/TPP CRAFT, EEB/BTA 
MANOGUE, EAP/CM KLEIN 
STATE PASS USTR FOR AUGEROT 
NSC FOR LOI 
 
E.O. 12958: N/A 
TAGS: ECIN ECON PGOV ETRD APECO CH
 
SUBJECT: APEC: U.S. SENIOR OFFICIAL FOR APEC TONG 
HOLDS BILATERAL REVIEW WITH CHINA'S SENIOR OFFICIAL 
LU 
 
(U) This cable is Sensitive But Unclassified. 
Please protect accordingly. 
 
Summary 
------- 
 
¶1. (SBU)  Summary: Meeting in Beijing September 29, 
U.S. Senior Official for Asia-Pacific Economic 
Cooperation (APEC) Affairs Kurt Tong reviewed a 
range of U.S. priorities in APEC with China's Senior 
Official for APEC (SOM) Lu Kang, Ministry of Foreign 
Affairs.  The two highlighted the shared interests 
of the United States and China in pushing forward 
with APEC work on regional economic integration (REI) 
and climate change, with a view toward producing a 
substantive Leaders' Statement in November.  Lu 
noted that Chinese ministries remain cautious 
regarding APEC proposals on services trade and trade 
in environmental goods and services (EGS).  Lu 
reported little support in Beijing at this time for 
China hosting APEC in 2014, since that would be 
"earlier than normal."  Lu signaled strong interest 
in the "inclusive growth" concept and said China 
looks forward with enthusiasm to the U.S. hosting of 
APEC in 2011.  At a meeting at the China Council for 
the Promotion of International Trade (CCPIT) 
September 30, Tong conferred with China's APEC 
Business Advisory Council (ABAC) Secretariat and key 
representatives of China's ABAC delegation.  End 
Summary. 
 
Getting Ready for Singapore 
--------------------------- 
 
¶2. (SBU)  Lu welcomed Tong's visit as a first 
opportunity for Beijing and Washington to compare 
notes during the final run-up to the APEC Leaders' 
Meeting in November.  China is particularly focused 
on clean energy, climate change, anti-protectionism, 
and the future reform and development of APEC. 
Asked about China's G20 takeaways, Lu ranked 
coordination on global financial and economic 
recovery as the top item.  Lu also stressed that the 
world was looking to the United States for a 
stronger stance on the Doha Round negotiations and 
anti-protectionism.  This was particularly important 
with the clock running out on Doha in 2010.  Lu said 
that while climate change was important, China does 
not see APEC or the G20 as a negotiating forum for 
climate change.  He expected Copenhagen to be 
fruitful and thought that Ministers should not push 
beyond what was already decided.  Both SOMs agreed 
that the United States should compare notes on their 
climate change positions during October and November, 
before and during APEC. 
 
¶3. (SBU)  Tong reviewed key U.S. priorities for APEC 
in 2009, including strong Leaders' Statement 
language (instructions for 2010) on regional 
economic integration, "inclusive growth", climate 
and clean energy, and food security.  In addition, 
the United States will seek APEC endorsement of the 
key policy outcomes from the Pittsburgh G20 Summit. 
Lu asked about the U.S. position on the Free Trade 
Area of the Asia-Pacific (FTAAP) concept in 2009, as 
well as on Australia's Asia-Pacific Community (APC) 
proposal (noting that Australia raises this issue 
every time China speaks with them).  Tong explained 
that it is imperative to continue to make positive 
forward progress on regional economic integration, 
in the direction of FTAAP, in concrete terms each 
year.  For 2009, the United States does not 
anticipate dramatic new instructions regarding FTAAP 
from the Leaders, but we do need to show credible 
"deliverables" -- the most important this year being 
an APEC statement of principles on services trade 
and the APEC proposal on handling trade in 
 
BEIJING 00002849  002 OF 004 
 
 
environmental goods and services (EGS).  Lu 
responded that China does not necessarily agree that 
APEC is the appropriate forum to discuss EGS, and he 
noted considerable Chinese inter-agency resistance 
to the services principles.  Tong reiterated the 
importance of those issues.  Regarding the Asia- 
Pacific Community, Tong noted that the best regional 
"architectures" will be ones that include the United 
States, because of the substantive contribution that 
the United States can bring, as well as because 
Asia-Pacific institutions that include the United 
States will make the biggest explicit and implicit 
contributions to regional stability. 
 
APEC Membership Moratorium 
-------------------------- 
 
¶4. (SBU) Lu also asked for Tong's opinion on the 
APEC membership moratorium.  Tong answered that the 
United States believes it is worth considering a 
more flexible approach to allowing non-members to 
attend certain APEC meetings.  Lu pointed out that 
currently, some non members such as Colombia sit in 
at meetings lower than SOM-level.  He asked if the 
United States was considering supporting interested 
non-members sitting in at the Senior Officials level 
and above, to which Tong replied that attendance at 
ministerial meetings, on a case-by-case basis, might 
make sense.  Referencing the results of the 
Pittsburgh G20 Summit, Lu Kang noted that China's 
senior leadership, including Vice Minister He Yafei, 
see "efficiency" in keeping multilateral and 
regional discussions such as the G20 and APEC 
limited to the minimum number of relevant economies. 
 
Inclusive Growth 
---------------- 
 
¶5.  (SBU) Lu and Tong agreed that the "inclusive 
growth" concept being explored by APEC Senior 
Officials was useful for both the United States and 
China.  Lu complained that China does not yet have a 
good Mandarin translation for "inclusive growth", 
currently using "baorongxing zengzhang", but the 
Chinese officials will work further on defining this 
in a way that captures the concept for the Chinese 
public.  As a related matter, Lu said that China's 
Ministry of Human Resources and Social Services 
(MOHRSS) is exploring setting up a multi-year fund 
for the APEC Human Resources Working Group.  He 
noted that China has both a lot to learn and a lot 
to share on this issue, and he encouraged the United 
States to get involved in this discussion.  Lu and 
Tong agreed that the work program on "inclusive 
growth" should stress creating opportunities to 
broaden participation in trade-led growth, as 
opposed to emphasizing ways to compensate for missed 
opportunities. 
 
APEC Nuts and Bolts 
------------------- 
 
¶6.  (SBU) Lu raised the issue of non-proliferation, 
noting China's long-standing opposition to handling 
this topic within the APEC framework.  Lu appeared 
satisfied with Tong's answer that counter-terrorism 
cooperation in areas such as airport security and 
tracking human movements belongs in APEC as long as 
that work has a demonstrable relationship to trade 
and economics.  Tong noted the usefulness of smooth 
cooperation between China and Taiwan in APEC, and Lu 
responded that things in that area seem to be going 
well. 
 
¶7.  (SBU) Tong raised the ongoing discussion in the 
SOM Committee on Economic and Technical Cooperation 
regarding the setting of priorities, and explained 
 
BEIJING 00002849  003 OF 004 
 
 
that the United States is opposed to the Philippines 
idea of setting quotas for projects according to the 
sponsoring economy.  At the same time, the United 
States sees great value in developing countries 
pulling together projects for APEC sponsorship, and 
noted that the U.S. Technical Assistance Task Force 
(TATF) in Singapore was established just for such a 
purpose.  Lu took the point, but responded only that 
he had read the Philippine paper and agreed that 
proposals lacking "expertise" had a hard time 
getting approved. 
 
¶8.  (SBU) Following up on an inquiry made by Tong at 
the July Senior Officials' Meeting in Singapore, Lu 
told Tong that China was probably not ready to host 
APEC in 2014, having done so previously in 2001.  He 
noted that the United States waited a longer time 
(18 years) between hosting, and economies such as 
Canada, New Zealand, Malaysia and the Philippines 
may be on the "waiting list" to host ahead of China. 
He said he would pass on Tong's request to continue 
to consider the idea, based on the logic that the 
largest and most capable economies should host more 
often.  Personally, he said he was 100 percent 
behind the proposal, but that in the next few months 
it would be very difficult for China to make that 
kind of decision. 
 
¶9.  (SBU) Lu noted that Singapore told him they 
wanted to change the format of the Foreign Ministers' 
informal meeting from a 90-minute working breakfast 
to a 2.5 or 3-hour meeting.  He said he personally 
discouraged Singapore from taking this step, out of 
consideration for Hong Kong and "Chinese Taipei." 
Lu also said that Singapore had told him that the 
United States had originally raised this idea.  Tong 
clarified that the United States favors an informal 
meeting similar in length and format to previous 
years.  Lu and Tong also discussed the fact that the 
Finance Ministers Meeting and APEC Ministerial 
Meeting will conclude on the same day, and noted the 
need to closely coordinate the statements issued out 
of these two events. 
 
¶10.  (SBU) Lu raised the Australia-U.S.-China 
forestry project in APEC, and said it might be a 
good idea to hold the next meeting in Indonesia.  Lu 
said China's Ministry of Agriculture was not 
enthusiastic about an Agricultural Ministerial 
Meeting in Japan, but found very interesting Tong's 
suggestion that the meeting focus on inviting 
ministers broadly responsible for food security 
issues, possibly from more than one ministry, rather 
than simply inviting agriculture ministries.  Tong 
explained the U.S. analysis of the key food security 
challenges in the Asia-Pacific region.  Lu said he 
would pass to the U.S. list of these issues (i.e., 
work to improve productivity, human resources, trade 
and investment flows, utilization of national 
resources, and infrastructure) to the Agriculture 
Ministry, and encourage them to "think holistically" 
about the ministerial in Japan. 
 
¶11.  (SBU) Lu also asked Tong how the United States 
might react to the Chinese Land Resources Ministry 
hosting an APEC mining industry ministerial meeting 
during 2011, and asked what other ministerials the 
United States was planning for 2011.  Tong responded 
that the United States had not yet finalized a slate 
of ministerial meetings to host in 2011, but noted 
that mining was unlikely to be such a topic.  Tong 
explained that the U.S. approach to ministerial 
meetings would be results-oriented, with discussions 
focused relatively narrowly on making progress on 
specific key issues, rather than holding more 
general discussions. 
 
 
BEIJING 00002849  004 OF 004 
 
 
¶12.  (SBU)  During his one-day visit to Beijing, 
Tong also met with China's APEC Business Advisory 
Council (ABAC) Secretariat chief Han Meiqing, who is 
Deputy Director General of the Department of 
International Relations at the China Council for the 
Promotion of International Trade (CCPIT).  Joining 
Han were corporate executives representing China's 
ABAC delegates Jack Ma, CEO of Alibaba Inc. and Lili 
Wang, EVP of the Industrial and Commercial Bank of 
China (ICBC).  Han reported that President Hu plans 
to address the APEC CEO Summit in Singapore, as in 
past years. 
 
¶13.  (U) This cable was cleared by Senior Official 
Tong. 
 
HUNTSMAN