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R 180850Z DEC 09
FM AMEMBASSY BEIJING
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INFO RUEHOO/CHINA POSTS COLLECTIVE
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RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
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UNCLAS SECTION 01 OF 03 BEIJING 003392 
 
SENSITIVE 
SIPDIS 
 
PACOM FOR FPA PICCUTA 
 
E.O. 12958: N/A 
TAGS: OVIP BURNS WILLIAM PREL PGOV PHUM ECON
EFIN, KN, CH 
SUBJECT: U/S BURNS MEETS WITH CHINESE SCHOLARS, DISCUSS 
POTUS TRIP, CHINESE ATTITUDES, ECONOMIC RESTRUCTURING, 
CLIMATE TALKS, NORTH KOREA 
 
NOT FOR INTERNET DISTRIBUTION 
 
¶1.  (SBU) December 9, 2009; 11:30 a.m.; Beijing 
 
¶2.  (SBU) Participants: 
 
U.S. 
---- 
Under Secretary Burns 
David Shear, EAP Deputy Assistant Secretary of State 
William Weinstein, Economic Minister-Counselor, Embassy 
Beijing 
Laura Stone, Economic Officer, Embassy Beijing (notetaker) 
 
CHINA 
----- 
Yu Yongding, Director, Chinese Academy of Social Sciences 
Institute of World Economics and Politics 
Ding Kuisong, Vice Chairman, China Reform Forum. 
 
¶3. (SBU) Summary:  U/S Bill Burns met on December 9, 2009 
with prominent Chinese pundits Yu Yongding, Director of the 
Chinese Academy of Social Sciences Institute of World 
Economics and Politics, and Ding Kuisong, Vice Chairman of 
the China Reform Forum.   The scholars offered a wholly 
positive assessment of the recent POTUS visit, and challenged 
the idea that the trip had proved that China was now the full 
equal of the still-robust United States.  They agreed that 
China's younger generation was more confident with a larger 
role for China, and were easily provoke by negative foreign 
media reporting.  China faced serious economic problems, 
including the need to readjust its economy to become less 
dependant on exports.  Politically, the leadership sought 
methods to deal with local officials' abuse of power, and was 
experimenting with greater intra-Party democracy and press 
freedom.  On the international stage, Beijing was serious 
about addressing climate change, and aimed to bring Pyongyang 
back to Six-Party talks. End Summary. 
 
Positive Review of POTUS Visit 
----------------------- 
 
¶4. (SBU) Dr. Yu stated that the President's visit had been 
very popular in China.  He noted that the trip had emphasized 
to many Chinese the fact that, in the long run, China and the 
United States shared many common interests.  Dr. Ding agreed, 
commenting that this trip represented a broadening of the 
relationship.  While past visits had focused on narrow 
bilateral concerns, this time the two sides also discussed 
regional and multilateral cooperation including the Six-Party 
talks, climate change, and Afghanistan.  Dr. Ding asserted 
that the visit had accomplished two important goals: 
introducing the leaders, and consolidating the overall 
relationship. 
 
China not Equal of US 
----------------------- 
 
¶5. (SBU) Turning to the press reaction in China, Dr. Ding 
noted that some "nationalist hard-line" voices claimed that 
the POTUS trip had proved that China was now equal in stature 
to the United States.  Ding disagreed with this assessment, 
arguing that the meeting was not so much a "G-2" session as 
an attempt to coordinate policies.  Dr. Yu agreed that most 
older scholars could not see another country sharing the 
United States' pre-eminent place on the global stage, 
although a few large countries like China, India, and maybe 
Canada and Australia, could grow into more important roles 
over decades.  Dr. Ding affirmed that, for China, the 
Sino-U.S. relationship was still China's most important 
foreign engagement. 
 
¶6. (SBU) A bemused Dr. Yu noted that, of late, Chinese 
scholars had spent much of their time at academic conferences 
defending the United States from American academics anxious 
to bemoan America's downfall.  He claimed that, economically, 
the United States was still young and strong.  Although the 
United States was going through a period of economic 
adjustment, Dr. Ding expressed great confidence that the U.S. 
economy's fundamentals were sound, and the United States 
would find new technologies to reinvigorate certain 
industries and drive growth. 
 
 
BEIJING 00003392  002 OF 003 
 
 
But Youth More Confident 
----------------------- 
 
¶7. (SBU) Both academics agreed that China's younger 
generations were much more confident about China's power and 
place in the world, although they resisted calling this 
impulse "nationalistic."  Dr. Yu praised China's youth, 
noting that they were somewhat spoiled, but also much more 
community-minded and courageous than their elders.  He 
offered the great outpouring of aid and volunteerism after 
the 2008 Sichuan earthquake as an example of their higher 
expectations for both themselves and their leaders. 
 
¶8. (SBU) Dr. Ding explained that these more savvy and 
confident youths were not willing to see China treated as a 
"second-class citizen" by the foreign media.  Events such as 
the negative foreign coverage of the Olympic torch relay had 
provoked real anger, which was fanned by market-oriented 
Chinese media anxious to sell papers.  He credited the 
problem, in part, to foreign journalists who came to China 
for a several-year tour without Chinese language skills and 
ended up talking only to fellow journalists "and a few 
dissidents."  While he did not have a much higher opinion of 
Chinese journalists overseas, he noted that they at least 
spoke English. 
 
China's Problems 
----------------------- 
 
¶9. (SBU) Dr. Yu asserted that China was currently facing a 
host of long-term structural economic problems.  He cited 
China's overinvestment in production, resulting in 
overcapacity that had been painfully reveled by the downturn 
in export demand.  The only way to utilize this capacity was 
to stimulate domestic consumption, and re-orient investment 
towards non-tradable services such as hospitals that could 
provide care to China's aging society.  Dr. Ding noted that 
readjustment would not be quick, since incomes remained low 
and people lacking social safety nets were loathe to spend 
money.  Dr. Yu felt that the Chinese economy's debt levels 
were still low enough to provide some cushion until the 
economy could readjust.  He several times asserted that China 
had to allow the RMB to appreciate in order to redirect 
investment into such domestically-oriented sectors. 
 
¶10. (SBU) Dr. Ding also raised the hot topic of land and real 
estate seizures as a social stability problem.  (Note: In the 
last few weeks there have been some well-publicized cases of 
clashes and protests, including a self-immolation, resulting 
from local government seizures of land for redevelopment). 
Dr. Ding noted that local governments had a large financial 
stake in real estate, and as property prices climbed the risk 
of conflicts with quasi-legal land occupants rose. 
 
Corruption, Democracy, Free Press 
----------------------- 
 
¶11. (SBU) Dr. Ding asserted that the leadership was promoting 
"democracy," and more specifically "democracy within the 
Party" as a way of controlling the behavior of local 
officials.  He also claimed that the Chinese media was 
increasingly free to report on local corruption, sometimes 
giving the impression that corruption was on the rise when in 
fact it was just more widely reported.  As the leadership 
sought new mechanisms to control individual officials, they 
were also broadening the decision-making process, allowing a 
greater number of non-governmental entities to be involved in 
creating new policies. 
 
Government Serious on Addressing Climate Change 
----------------------- 
 
¶12. (SBU) Dr. Yu stated that the Chinese government believes 
that climate change and pollution pose a real threat to 
China.  Dr. Ding acknowledged that China is the world's 
largest emitter, but pleaded with the developed world to 
share their technology with China in the spirit of 
"cooperation not competition."  He reiterated that China had 
made hard commitments to reduce emissions by 40 percent. 
 
China Trying to Get DPRK to Table 
----------------------- 
 
 
BEIJING 00003392  003 OF 003 
 
 
¶13. (SBU) Dr. Ding advocated promoting a multilateral 
approach to North Korea through the Tumen River development 
project, but said China had been stymied by South Korea's 
lack of enthusiasm for the project.  He stated that China was 
trying hard to bring the North back to the Six-Party talks, 
casting the recent visits by China's Premier and Defense 
Minister as attempts to persuade Pyongyang to re-engage.  He 
welcomed direct US-DPRK talks, noting that even if nothing 
was accomplished, "at least you're talking." 
 
¶14. (U) U/S Burns cleared this message. 
GOLDBERG