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Cablegate: Meeting with Mfa Vice Minister Zhang Yesui

VZCZCXRO9171
PP RUEHCN RUEHGH
DE RUEHBJ #6652/01 2880033
ZNR UUUUU ZZH
P 150033Z OCT 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 2767
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEHCN/AMCONSUL CHENGDU 8717
RUEHGZ/AMCONSUL GUANGZHOU 3533
RUEHHK/AMCONSUL HONG KONG 9751
RUEHGH/AMCONSUL SHANGHAI 8527
RUEHSH/AMCONSUL SHENYANG 8370
RUEHIN/AIT TAIPEI 6681

UNCLAS SECTION 01 OF 02 BEIJING 006652

SIPDIS

SENSITIVE
SIPDIS

USDOC FOR ITA/MAC/AP/MCQUEEN, Kasoff, Karnak, Melcher

STATE PASS USTR STRATFORD, WINTER, ALTBACH, GENEVA PASS
USTR

E.O. 12958: N/A
TAGS: ECON ETRD PREL CH
SUBJECT: MEETING WITH MFA VICE MINISTER ZHANG YESUI


1. (U) Summary. On October 9, Deputy USTR Karan Bhatia and
Department of Commerce Acting Under Secretary Christopher
Padilla told MFA Vice Minister Zhang Yesui that the JCCT
preparatory meeting with VM Ma were constructive and much
work remains for the JCCT and SED. China should send an
unequivocal signal that it remains open to foreign
investment and trade and evince tangible progress on
product safety. Zhang said that China is very concerned
about Congressional bills directed against China. End
Summary.

Much JCCT and SED Work Lies Ahead
---------------------------------

2. (U) Bhatia and Padilla noted that that morning's JCCT
discussions with Ministry of Commerce Vice Minister Ma
Xiuhong had been good (septel). In order to counteract
pressure from the United States Congress that could
restrict trade, the United States and Chinese sides have
much work before them to demonstrate progress in areas such
as market access and transparency at both the JCCT and SED.
In discussions with Vice Minister Ma, the United States
side made three key points: (1) a clear, unequivocal
statement is needed from the Chinese side affirming China's
commitment to remain open to foreign investment and trade;
(2) both sides must evince concrete action in the area of
product safety; and (3) the JCCT is focused for short-term,
tangible results, while the SED is designed for more long-
term, macroeconomic issues. Bhatia and Padilla also
appealed for assistance from MFA to enlist China's support
to combat the illegal harvesting of trees from Asia.

3. (U) Not being briefed on the JCCT discussions, Zhang
would not comment on details. He stated, however, that
China's policy to attract foreign investment had not
changed. China has taken tough measures to assure product
safety, and 99 percent of Chinese products meet standards.
An MOU on product safety could be signed during SED III, he
said. He agreed that the JCCT and SED should not overlap.
He noted that China has consistently opposed illegal
logging. He looked forward to the visit of Assistant
Secretary McMurray and hoped that a consensus could be

SIPDIS
reached soon so that both sides could sign an agreement on
illegal logging at SED III.

China Concerned by Congressional Bills
--------------------------------------------- -----

4. (U) Noting that bilaeral economic and trade ties are
strengthening year by year, with United exports expanding
more than 16.4 percent between January and August and
China's remaining The United States' fastest growing export
market for the fifth straight year, Vice Minister Zhang
said that some friction in such a large relationship is
unavoidable. China believes in dialog, opposes
politicizing such issues, and does not support
protectionism. In this regard, China is "most concerned"
by the 40 plus China specific bills before Congress,
specifically the Baucus/Grassley Currency Bill and the
Dole/Shelby Bill. Since such bills, if enacted, would
damage bilateral relations, China hopes that the United
States Government will work hard to dissuade Congress.

5. (U) Zhang also appealed to the USDOC to relax export
controls. China recognized USDOC's recent efforts in this
regard, but these efforts do not suffice. As for visas,
Zhang asked that application procedures are still too
complicated, although he appreciated the simplification of
procedures for ministerial-level visitors following SED II.
China believes that the 20 percent refusal rate is too high.
A higher visa issuance rate would boost trade and
investment.

6. (U) Bhatia said that the administration had expressed
its opposition to the Baucus/Grassley and Dole/Shelby Bills
in a joint letter from Secretaries Gutierrez and Paulson
and Ambassador Schwab to Congress. These senior leaders
called for more engagement, not legislation. Bhatia noted,
however, such Congressional pressures could increase as the
elections approach and encouraged China to produce tangible

BEIJING 00006652 002 OF 002


results in resolving trade frictions, deliver a clear
message about the country's future economic direction, and
engage in multilateral institutions like DOHA. As for
visas, Padilla noted that visa issuance had grown 20
percent in the past year. He also urged China to continue
working with the U.S. on the Tourism MOU, especially the
repatriation issue, with the hope of it being signed in
time for the JCCT.

7. (U) China opposes illegal immigration and will accept
any documented illegal Chinese immigrant who does not have
a criminal record. There is no political barrier to
signing a repatriation agreement. In this regard, he noted
that the United Kingdom and China, following two years of
discussions, had recently concluded a repatriation
agreement.

8. (U) Meeting Participants
---------------------------

Chinese side:

Mr. Zhang Yesui, Vice Minister, MFA
Mr. Xie Feng, Deputy Director General, North American
Oceania Affairs, MFA
Mr. An Gang, Director, North American Oceania Affairs, MFA
Mr. Jing Quan, Deputy Director, North American Oceania
Affairs, MFA

United States side:

Mr. Karan Bhatia, Deputy USTR
Mr. Christopher Padilla, DOC Acting Under Secretary
Mr. Daniel Piccuta, Charge d'Affaires
Mr. Tim Stratford Assiatant USTR
Mr. Chris Adams, USTR Senior Trade Representative
Mr. Eric Madison, Deputy Econ Chief (note taker)
Ms. Caroline Katzin, Special Counsel FCS
Ms. Lisa Rigoli, Trade Facilitation Office
Ms. Rebecca Karnak, DOC
Ms. Sarah Ellerman, FCS

9. (U) The Bhatia/Padilla delegation has cleared this cable.

Piccuta

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