Search

 

Cablegate: Special Representative Mermoud Pushes For

VZCZCXRO9121
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1625/01 1182309
ZNR UUUUU ZZH
P 272309Z APR 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 6916
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHOO/CHINA POSTS COLLECTIVE

UNCLAS SECTION 01 OF 04 BEIJING 001625

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/CBA MERMOUD/UHRE
STATE FOR EAP/CM SECOR/YAMAMOTO
STATE PASS USTR STRATFORD/WINTER/MAIN
USDOC FOR ITA/MAS/GUZMAN/ECHEGARAY/FOWLER
STATE PASS US HUD DEPT

E.O. 12958: N/A
TAGS: ETRD EINV PREL ENRG EFIN BTIO IAEA CH
SUBJECT: SPECIAL REPRESENTATIVE MERMOUD PUSHES FOR
GREATER MARKET ACCESS DURING APRIL 21-22 CHINA VISIT

THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE
HANDLE ACCORDINGLY. NOT FOR DISTRIBUTION OUTSIDE USG
CHANNELS.

REF: A. BEIJING 2007 6959
B. BEIJING 2008 0487
C. BEIJING 2008 1212
D. BEIJING 2008 1136

1. (SBU) Summary. United States Department of State
Special Representative for Commercial and Business
Affairs J. Frank Mermoud met with Ministry of Housing
Urban-Rural Construction (MHURC) officials and
construction industry leaders on April 21 and 22 to
follow-up on the March 4th United States-China
Architecture, Construction, and Engineering (ACE)
Services Dialogue and discuss areas for further
cooperation. Mermoud also met with Ministry of
Science and Technology (MOST) officials on April 22 to
emphasize the importance of continuing our on-going
Innovation Dialogue with China and propose a one-day
academic seminar on promoting innovation in June on
the margins of SED IV.

2. (SBU) In April 21 and 22 meetings with China Export
and Credit Insurance Corporation (SINOSURE) officials
and in a meeting with Chairman of China state-owned
construction and engineering services company Sinoma
International Engineering, Mermoud reiterated the
importance of further collaboration on developing the
surety bond industry in China and exploring commercial
opportunities for Third Country United States-China
cooperation in the construction and insurance sectors.
Mermoud also met with Westinghouse Vice President of
Nuclear Power Plants in China to discuss commercial
opportunities for United States companies in China's
civil nuclear power industry. End Summary.

--------------------------------------------- ---
Topics for Next U.S.-China Construction Dialogue
--------------------------------------------- ---

3. (SBU) On April 21, Mermoud met with Director
General Wang Suqing of the Ministry of Housing and
Urban-Rural Construction (MHURC) Department of Market
Administration and Deputy Director General (DDG) Wang
Zaosheng to discuss areas for further collaboration as
a follow-up to the March 4 United States-China
Architecture, Construction, and Engineering (ACE)
Services Dialogue held in Washington, DC. DDG Wang
stated MHURC is interested in pursuing the following
topics for the next ACE Dialogue including: more
government-to-government exchanges at the state, city,
municipal, and local levels, technical discussions
with United States construction industry leaders on
construction management techniques in areas of safety
and quality assurance as well as economic management
of construction projects, and technical exchanges on
green building and energy conservation.

4. (SBU) DDG Wang also told us that MHURC is
interested in furthering United States-China dialogue
on surety and licensing bonds, engineer licensure, and
architect licensure as a follow-up to the March 4
Dialogue. Mermoud reiterated the need for more
clarity in licensing regulations regarding
opportunities for United States firms to engage in
engineering, construction, and architecture design
projects (ref A). Mermoud asked that the foreign
staffing requirements under Decree 114 be permanently
removed. DDG Wang said MHURC will continue to
"temporarily" remove the foreign staffing requirements,
but did not commit to making it permanent.

--------------------------------------
MOC Name Change and Leadership Changes
--------------------------------------

5. (SBU) When asked about MHURC's merger with China's
Department of Transportation, DDG Wang stated there
are no major restructuring changes within MHURC except
for the change in name from Ministry of Construction

BEIJING 00001625 002 OF 004


to Ministry of Housing Urban-Rural Construction. Wang
stated the name change occurred in early March because
the Central Government wants to place greater emphasis
on providing affordable housing for the populace and
focus on more balanced urban-rural development. As
far as MHURC's merger within DOT and possible
leadership and internal structural changes that may
result from the merger, Wang stated it is too early to
deliberate, but that most new appointments and changes
would not be made until early June. At the
Ministerial level, however, DDG Wang reiterated that
MHURC's ministerial leadership has been in place for
some time, and that Jiang Weixin is the designated
Vice Minister expected to become MHURC Minister.
DDG Wang reassured us that there will be no major
management changes in the Department of Market
Administration nor would the merger affect future
United States-China ACE dialogues.

--------------------------------------------
Pushing Forward Innovation and 1-Day Seminar
--------------------------------------------

6. (SBU) Mermoud met with Director of the Ministry of
Science and Technology (MOST) Division of Americas and
Oceania Wang Qiang on April 22 to express appreciation
for MOST's contributions in making the December 10,
2007 Beijing Innovation Conference a success. Mermoud
reiterated the need for on-going dialogue and
requested MOST consider co-hosting a one-day seminar
on innovation to be held at University of Virginia on
June 16. Director Wang agreed that the December
Innovation Conference was a success and emphasized
MOST's commitment to pursuing on-going dialogue.

7. (SBU) Wang expressed concern about the proposed
title of the one-day seminar entitled "The Role of
Patents in Promoting Innovation" and said any
reference to "Intellectual Property Rights" or
"patents" in the title would be problematic and that
those topics would fall under Ministry of Commerce
(MOFCOM)'s jurisdiction. Accordingly, he suggested
finding an alternative title for the seminar such as
"Enterprise or Business Innovation" and requested that
we submit our proposal via a letter addressed to
higher levels within MOST to ensure a more efficient
and quicker response from China's interagency working
group on innovation. If the above two conditions
could be met, Wang appeared optimistic that it would
be possible for MOST to co-host the seminar and for
the seminar to occur on the sidelines of SED IV.

------------------------------------------
Surety Bonds and Third Country Cooperation
------------------------------------------

8. (SBU) Mermoud met with China Export and Credit
Insurance Corporation (SINOSURE) Vice-President (VP)
Zhang Weidong and Chairman of China state-owned
construction and engineering services company Sinoma
International Engineering Chairman Wang Wei in
separate meetings on April 21 and April 22 to explore
opportunities for United States-China collaboration in
developing the surety bond industry in China and
exploring commercial opportunities for Third Country
U.S.-China cooperation in the construction and
insurance sectors. VP Zhang and Chairman Wang
expressed interest. Zhang stated that surety bonds
are a product unique to the United States, that China
needs more time to develop its own surety industry,
and that SINOSURE would like to work in partnership
with a United States insurance company to offer co-
surety or reinsurance (ref B).

9. (SBU) Mermoud offered to refer VP Zhang to
President of the Surety and Fidelity Association of
America to help answer any questions SINOSURE may have
regarding the United States surety market. Zhang
welcomed the offer, and revealed that SINOSURE hired a
United States consulting firm to assist them in the
process and that SINOSURE has been interacting with
three United States insurance companies to find ways

BEIJING 00001625 003 OF 004


to issue surety bonds in the United States. When
asked about third country involvement, Zhang noted
SINOSURE is actively involved in promoting Chinese
construction projects in Africa, the Middle East, and
Central Asia.

10. (SBU) On April 21, Sinoma Chairman Wang Wei said
Sinoma would support United States efforts to promote
dialogue on construction and engineering services
including in the area of developing the surety bond
industry in China. Chairman Wang noted that Sinoma
International Engineering is increasingly involved in
construction projects in Russia, Central Asia, Saudi
Arabia, Libya, Egypt, Ethiopia, South Africa, and
Nigeria. He said Sinoma has six construction projects
underway in Russia and 10 projects in Central Asia.
He noted that from January to April 2008, the contract
value of exports for his company has already surpassed
that of last year. Wang expressed interest in finding
a United States partner to work on energy projects,
energy efficient power plants, and industrial waste
processing. Mermoud suggested Wang coordinate with
the United States Foreign Commercial Service to
explore opportunities for third-country collaboration.

------------------------------------------
Window of Opportunity for Nuclear Advocacy
------------------------------------------

11. (SBU) Mermoud met with Westinghouse China Vice-
President Bill Poirier to discuss future opportunities
for United States companies in China's civil nuclear
power industry. The current political situation in
China could provide an ideal opening to advocate for
additional purchases of U.S. reactor technology,
Poirier said. Anti-French sentiment is on the rise,
the leadership has announced plans to build nuclear
plants in the interior in response to massive February
snow storms which cut-off coal shipments (ref C) and
therefore electricity for as many as several weeks in
some locations, and China has announced purchases of
both French and Russian reactors since the December
2007 Westinghouse announcement.

12. (SBU) Poirier said that China has released plans
to build 18 reactors at inland sites along with
another four reactors at each of the two current
AP1000 sites, and has expressed a preference for Gen
III nuclear technology at these sites. Chinese
officials have asked Westinghouse if the AP1000 could
be adapted for inland use; Poirier noted that the
AP1000 was actually designed for inland use and had
been adapted for the current coastal AP1000 sites.
While the AP1000 would presumably be the frontrunner,
he continued, the final decision will ultimately be a
political one as there is much contention in
government and industry nuclear circles about how
quickly China should build the first-of-its kind
AP1000 fleet (refs C and D).

--------------------------------------------- --
Quicker Contracts = More U.S. Sourced Equipment
--------------------------------------------- --

13. (SBU) Poirier said that Westinghouse's expected
scope for these projects is greater the earlier the
plant is ordered; he estimated each two plant order
would be worth USD 1 billion to Westinghouse and its
United States partners. Westinghouse is hoping to get
two plants at each of the three inland sites.
(Comment: The list of planned reactors provided by
Westinghouse showed 100 total plants at 21 sites.
China currently has 11 operating nuclear plants and
plans to have up to another 45 completed by 2020 with
18 under construction at that time (ref C); China has
not yet formally announced a timeframe for 100
operating reactors. China will probably initially
announce a bid for two reactors at each internal site,
for as many as six plants in the first round. The
inland sites are Dafan near Wuhan in Hubei province,
Taohuajiang near Changsha in Hunan province, and
Pengze near Nanchang in Jiangxi province. End

BEIJING 00001625 004 OF 004


comment.)

---------------------------------------
Need for Greater International Advocacy
---------------------------------------

14. (SBU) China has expressed a preference for
PressurizedWater Reactors (PWRs) in previous bids and
is not expected to change this in the near future.
However, although Westinghouse is currentlythe only
U.S. commercial PWR supplier, opportnities exist for
other companies to supply China's nuclear industry
with components and services beyond the nuclear island,
such as auxiliary equipment, turbine-generators,
valves, etc. Mermoud noted to Poirier that the U.S.
nuclear industry needs to be more visible in China and
throughout the world, and suggested that Westinghouse
augment its presence at international venues, such as
by providing "cost-free experts" to the International
Atomic Energy Agency, as is the custom of the French.

15. (U) This message was cleared by Special
Representative Mermoud.

#Randt

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC