VZCZCXRO4052
PP RUEHCN RUEHGH
DE RUEHBJ #0269/01 0331204
ZNR UUUUU ZZH
P 021204Z FEB 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 7871
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 0183

UNCLAS SECTION 01 OF 02 BEIJING 000269 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PHUM PARM ETRD MNUC CH JA IR
 
SUBJECT: FEBRUARY 2, 2010 MFA PRESS BRIEFING: TAIWAN ARMS SALES, 
2010 QUADRENNIAL DEFENSE REVIEW, LIU XIAOBO, FENG ZHENGHU, SALE OF 
FREDDIE MAC BONDS 
 
¶1. Key points at the February 2, 2010 MFA press briefing were: 
 
-- The announcement of U.S. arms sales to Taiwan "seriously damages 
the core interests" of the two countries and will negatively impact 
bilateral exchanges and regional issues. 
 
-- China will place sanctions on "every U.S. company" involved in 
the Taiwan arms sales. 
 
-- China blames the United States for making "irresponsible remarks 
that damage the trust in U.S.-China relations" in the 2010 U.S. 
Department of Defense Quadrennial Defense Review (QDR) Report.  The 
United States is only looking to "point fingers" at China's "normal 
defense build-up" and is interfering in China's internal affairs. 
 
 
-- The Nobel Committee would have "no basis" and would be 
"completely wrong" if it decided to award the Peace Prize to Liu 
Xiaobo. 
 
-- China denies the allegations made by former U.S. Treasury 
Secretary Henry Paulson that Chinese and Russian leaders held 
discussions to jointly sell their Freddie Mac bonds. 
 
-- "Dialogue and negotiations" are preferable in dealing with Tehran 
on its nuclear weapons program. 
 
U.S. Arms Sales to Taiwan 
------------------------- 
 
¶2. Ministry of Foreign Affairs Spokesman Ma Zhaoxu said that 
"regardless of China's efforts, the United States was bent on 
selling arms to Taiwan, which seriously damaged U.S.-China 
relations."  Further, arms sales will "negatively impact important 
issues and exchanges," and would lead the bilateral relationship in 
a direction "not welcomed by both sides." 
 
¶3. Asked if the announcement would affect international cooperation 
on the issue of nuclear weapons in North Korea and Iran, Ma said 
that there would be a negative impact on regional issues and that 
"the fault lies completely" with the U.S. 
 
¶4. Ma stated that sanctions will be imposed on U.S. companies 
involved in the sale.  A reporter asked if Boeing would be one of 
the companies to face sanctions.  Ma responded that "every U.S. 
company" involved in the sale would face "relevant" sanctions. 
 
¶5. Ma added that the Human Rights Dialogue scheduled to take place 
by the end of the month will be affected by the arms sales.  Also, a 
potential meeting between President Obama and the Dalai Lama could 
further damage China's relationship with the U.S. as China does not 
approve of any contact between foreign officials and the Dalai 
Lama. 
 
Defense Department's Quadrennial Defense Report 
--------------------------------------------- -- 
 
¶6. Ma responded to a question regarding the release of the QDR by 
calling on the U.S. to view China's "peaceful development" and 
"defensive build-up" of military forces in "an objective and fair 
manner." 
 
Liu Xiaobo and the Nobel Peace Prize 
------------------------------------ 
 
¶7.  Questioned about China's response to calls that jailed activist 
Liu Xiaobo be nominated for the Nobel Peace Prize, Ma stated that 
China is a nation ruled by laws and referred questions regarding Liu 
and his case to relevant authorities.  Ma added that it would be 
"completely wrong" for the Nobel Committee to grant a Peace Prize to 
Liu. 
 
Too Early for Sanctions on Tehran 
--------------------------------- 
 
¶8. Ma responded to questions about increasing pressure to apply 
sanctions to Tehran for its refusal to dismantle its nuclear program 
by stating that it is still "too soon" for sanctions and that a 
"flexible and pragmatic" approach would be more effective. 
 
Coordinated Sale of Freddie Mac Bonds 
------------------------------------- 
 
¶9. Ma denied the allegations put forth by former U.S. Treasury 
Secretary Henry Paulson that there had been collusion between China 
and Russia in the sale of their holdings in Freddie Mac to force the 
U.S. government to prop up the company.  He stated that China did 
its best to stabilize the world financial crisis. 
 
 
BEIJING 00000269  002 OF 002 
 
 
Other News 
---------- 
 
¶10. In response to a question regarding Feng Zhenghu, the Chinese 
citizen denied entry into China and currently living in Tokyo's 
Narita Airport, Ma referred interested parties to the relevant PRC 
immigration officials. 
 
¶11. Ma reported that an Indonesian search and recovery mission to 
find the crew of the fishing vessel "Dolphin" had resulted in the 
rescue of one person and the recovery of eight bodies.  Ma stated 
that 24 of the ship's crew were Chinese citizens and the Chinese 
government is in communication with families of the victims. 
 
HUNTSMAN