Cablegate: Secretary Chao's August 25, 2008 Meeting With

DE RUEHBJ #3345/01 2420105
O 290105Z AUG 08





E.O. 12958: N/A
SUBJECT: Secretary Chao's August 25, 2008 Meeting with
Chinese Vice-Premier Zhang Dejiang

(U) This cable is Sensitive but Unclassified. Please
protect accordingly.

1. (SBU) SUMMARY: Secretary of Labor Elaine Chao met
with Vice-Premier Zhang Dejiang on August 25, 2008.
Secretary Chao noted how much President Bush enjoyed the
Opening Ceremonies of the Olympics and expressed
condolences from the American government and people
regarding the Sichuan Earthquake and stressed the
importance that the President places on the United States-
China relationship. Vice-Premier Zhang stressed the
importance of a cooperative relationship between the United
States and China, explained that China was successful in
fulfilling its commitments to the Olympics and also relayed
gratitude to the United States public and private sectors
in response to the natural disasters that befell China this
year. Zhang listed smooth economic development followed by
inflation prevention as China's main economic priorities,
noting job creation is one of his responsibilities. He
also described the difficulties that China continues to
face, but expressed that the relationship between the two
countries has been cooperative and constructive. Zhang
looks forward to continued cooperation, which he said
benefits not only both countries, but also the rest of the

2. (U) Secretary of Labor Elaine L. Chao met with Chinese
Vice-Premier Zhang Dejiang and Minister of Human Resources
and Social Security (MOHRSS) Yin Weimin on August 25, 2008.
The following MOHRSS officials were also present: Vice
Minister Wang Xiaochu, Director General (DG) Zhang Yali,
and Deputy Director-General Hao Bin, Zhao Hui (interpreter).
United States participants included Amb. Clark T. Randt,
Department of Labor (DOL) Associate Deputy Secretary Anna
Hui, DOL Deputy Assistant Secretary Jennifer Coxe, Special
Assistant to the Secretary Alden Sanborne, Embassy Labor
Officer Bruce Levine, Embassy Interpreter James Brown and
Econoff Jason Chan (notetaker).

3. (SBU) Secretary Chao said President Bush enjoyed
attending the Olympic Opening Ceremonies and stressed the
importance the President places on the United States-China
bilateral relationship. She also expressed condolences on
behalf of the United States government and people for May
12 Sichuan earthquake. The Secretary and Vice Premier both
said they valued the cooperative bilateral relationship,
including under the six active letters of understanding DOL
has signed with its Chinese counterparts. Secretary Chao
said that since 2001, her goal has been to improve
relations with her Chinese counterparts.

4. (SBU) Vice-Premier Zhang said MOHRSS is satisfied with
the relationship with DOL and looks forward to continued
cooperation. This not only benefits the two agencies, he
said, but also contributes to constructive bilateral
relations. Zhang expressed that the United States and
China have different experiences, but that they can share
these experiences and improve. He said China has its own
specific circumstances and complexities, and seeks to
maintain a close and cooperative relationship with the
United States. He noted that the United States-China
relationship is beneficial not only bilaterally, but also
to the rest of the world.

Successful Fulfillment of Olympic Commitment

5. (SBU) Vice Premier Zhang said there were 204
delegations in attendance at the Olympics, with newspapers
reporting 87 medal-winning countries, 51 gold medals for
China and 43 broken world records. He said it was a grand,
unprecedented event, and congratulated the United States on
winning 111 medals. Since winning the bid in 2001, he
explained, the Chinese government has adopted the motto of
a "green, technological, and people's Olympics" in the
spirit of a swifter, higher, and stronger Olympics. He
said that China has fully honored its commitments with a
successful 29th Olympics, and that China will continue to
work hard during the Paralympics.

6. (SBU) Secretary Chao said the eyes of the world were
on the Chinese people for their preparation and staging of

BEIJING 00003345 002 OF 003

the Olympics. She noted that several prominent Americans
stated that China had shown itself spectacularly under a
new light. She said the closing ceremonies were
spectacular, and that the United States Presidential
delegations to both the opening and closing ceremonies
equally enjoyed the Olympic ceremonies and events.

Social Security Reform Difficult in China's
Complex Society

7. (SBU) Vice-Premier Zhang stated that China hopes to
improve the social security situation for all people by
2020, especially with medical care, a pension system, and
other social insurance programs that cover urban and rural
areas. He explained that foreigners have a difficult time
understanding China because of its long history, large
geographical area, 56 nationalities and regional
differences, which are further complicated by the urban-
rural, intra-provincial and even intra-county differences.
He said it is very important to consider the reality of
China and that a one-size-fits-all approach cannot be
expected. Therefore, Zhang stated that the employment,
labor and social security system must fit Chinese reality.

8. (SBU) Zhang mused that during the first half of 2008,
the world economy was extremely complex with the
depreciation of the United States dollar, appreciation of
the Chinese yuan (RMB) and the inflation of oil and natural
resource prices. However, he said the Chinese economy was
able to remain healthy and stable with gross domestic
product (GDP) growth of 10.4%. He listed China's economic
priorities as smooth economic development followed by
inflation prevention, noting that one of his tasks is job
creation. He explained that China has a huge population
and is still a developing country. The need to create 10
million new jobs each year is a big challenge. Active
employment policies combined with new laws and regulations
such as the Labor Law, Employment Promotion Law, and Labor
Arbitration Law help to both promote employment while also
keeping workers' interests in mind, he said.

9. (SB) Zhang noted Secretary Chao's visits to Chinaand
her familiarity with labor and social secrity issues, and
said she can appreciate the roblems created by a
population of 1.3 billion people. He explained that 760
million rural residents and more than 600 million urban
residents create a rural-urban divide. The most pressing
task is the social security system and extending it to all
citizens. As a former Provincial Party Secretary in Jilin
and Guangdong provinces, Zhang stated that he understands
these disparities first hand. He explained that Jilin is
an old industrial base with a large agricultural sector,
while Guangdong is close to Hong Kong and at the forefront
of China?s reform and opening up. He stated that the
United States is the world?s most developed country that
has rich experience in the relationship between employment,
labor, and social security. He noted that China can learn
from the United States to improve and enhance China?s own

10. (SBU) Secretary Chao thanked Zhang for expounding on
these important topics. She noted the good relationship
with the previous Ministry of Labor and Social Security
(MOLSS) and the present MOHRSS. Since 2001, she
explained,her goal has been to establish better relations
between her Department and its Chinese counterpart. She
referred to the six letters of understanding already signed
with MOHRSS and the State Administration for Work Safety
(SAWS) and another agreement with former MOLSS Minister
Tian, which underpin continued dialogue and mutual
understanding. The agreements are beneficial because,
through their different experiences, the agencies can share
their experiences and lessons. She noted that she was
pleased to be able to meet Minister Yin on this visit and
discuss issues of mutual concern.

DOL-MOHRSS?s Cooperative Relationship

11. (SBU) Vice-Premier Zhang noted that Minister Yin had
spoken of the cooperative relation between DOL and MOHRSS,

BEIJING 00003345 003 OF 003

and hoped that the relationship improves and deepens
further. He commented that as a veteran Secretary,
Secretary Chao has had rich experience with China and labor.
He said he hopes the two ministries will continue to
deepen their cooperation. Zhang noted that the United
States-China relationship is beneficial not only to the two
countries, but also to the world. He remarked that the
agreement between President Bush and President Hu to build
a constructive and cooperative relationship was a strategic
decision, and Zhang said he hopes the relationship will
continue to develop along these lines.

12. (SBU) Secretary Chao noted that there would be many
opportunities for discussion and cooperation in the future,
including the Joint Commission on Commerce and Trade (JCCT)
in September, 2008 followed by the Strategic Economic
Dialogue (SED) in December. She said President Bush refers
to the United States-China relationship as one of the most
important relations in the world. She noted that MOHRSS
and DOL cooperate candidly to ensure that the relationship
continues thus.

Condolences for the Sichuan Earthquake

13. (SBU) Secretary Chao conveyed the condolences of the
government and people of the United States for the May 12,
2008 Sichuan earthquake. Vice-Premier Zhang noted that in
the spring, China?s electricity and transportation network
was greatly impacted by a major snowstorm. In May, China
was hit by a devastating earthquake. The government of
China follows a 'people first' policy (yi ren wei ben), he
said, so a great effort was put forth in both relief
periods. He expressed sincere gratitude for the assistance
and support from the United States? public and private

14. (U) Secretary Chao cleared this message.


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