Cablegate: U/S Jeffery and Scio Agree to Future

DE RUEHBJ #4453/01 3400838
P 050838Z DEC 08



State for EAP/CM - SFlatt, PPark
State for EEB/CIP - SFlynn, FSaeed, DGross
USTR for China Office - Awinter, JMcHale, AMain
Commerce for National Coordinator for IPR Enforcement
Commerce for MAC ESzymanski, JYoung
LOC/Copyright Office - STepp
USPTO for Int'l Affairs - LBoland, EWu
DOJ for CCIPS - MDubose and SChembtob
FBI for LBryant

E.O. 12958: N/A

This cable is sensitive but unclassified and is not
for Internet distribution.


1. (SBU) Under Secretary of State Reuben Jeffery, III
met with State Council Information Office Vice
Minister Cai Mingzhao on December 3 to discuss China's
Internet administration and information access
policies. The two hailed the success of industry
cooperation in the U.S.-China Internet Summit, and
agreed to explore adding a government-to-government
component to the annual meetings to discuss topics of
common interest as well as sensitive issues, including
online security, copyright protection, and open access
to the Internet. While Cai deftly handled questions
on China's Internet censorship, he did agree to
further discussions on the topic. Cai confirmed that
his agency will take over responsibility for
regulating foreign financial information providers.
End Summary.

Support for Continuation of SED Framework

2. (SBU) State Council Information Office (SCIO) Vice
Minister Cai Mingzhao and Under Secretary of State for
Economic, Energy, and Agricultural Affairs Reuben
Jeffery, III met in Beijing on December 3, the eve of
the Fifth U.S.-China Strategic Economic Dialogue (SED).
Both acknowledged that the profile and importance of
the event were raised against the backdrop of the
global financial crisis.

Agreement on Continued Internet Cooperation

3. (SBU) Cai and Jeffery agreed that broad
complementarities exist between the Chinese and U.S.
Internet industries that should be further explored
and developed in cooperation between governments,
between businesses, and in public-private forums. Cai
said that Chinese companies have learned a great deal
from their U.S. counterparts. Whereas the U.S.
Internet industry leads the world in its capacity for
research and development, Cai noted, China is the
world's largest market for the application of Internet
technologies, with nearly 300 million Internet users
and growing at approximately 240,000 new users per day.
He added that China welcomes foreign enterprises to
enter the Chinese market to share this huge
opportunity, and said he is pleased that so many U.S.
businesses already claim China as their fastest
growing market.

4. (SBU) Cai thanked Jeffery for his participation as
keynote speaker at the first U.S.-China Internet
Summit (where Cai and Jeffery first met), hosted by
the Internet Society of China and Microsoft in
November 2007 in Seattle. He said the summit has
resulted in increased engagement between U.S. and
Chinese Internet companies over the past year. Cai
noted that the second Internet Summit, held in
Shanghai on November 7, was also a success. Jeffery
emphasized the importance of high-tech and telecom
industries in improving lives, linking China and the
United States, and generating robust economic growth.

5. (SBU) Jeffery proposed and Cai agreed that both
sides should identify areas of mutual interest for

BEIJING 00004453 002 OF 003

future collaboration. Jeffery suggested that upcoming
discussions could include online security and law
enforcement, in particular efforts to combat viruses,
online fraud, spam email, and also to protect
copyrighted material on the Internet.

Expand Industry Forums to Include Government

6. (SBU) Cai and Jeffery also agreed that the existing
industry-led U.S.-China Internet Summit might be
expanded to include a bilateral government component.
Cai said that, while Chinese and U.S. Internet
enterprises enjoy a mutually beneficial relationship,
differences remain - not only in geography and time
zones, but also cultural and historical differences.
As a result, he said, it is natural for the two
countries to have different views on the Internet and
its regulation. These differences, Cai continued, can
be addressed in a "cool-minded way" by increasing
engagement and dialogue. Therefore, he concluded, it
is very important to continue to support the Internet
Summit on a regular basis, and to leverage the event
as a platform for further government-to-government
dialogue to increase mutual understanding. As an
example, he offered that U.S. Government officials
should visit Chinese domestic Internet companies,
which he said are "open and transparent, like the
Internet itself."

7. (SBU) Jeffery agreed, and raised open access to
information as another mutually beneficial goal that
might be discussed in such future bilateral meetings.
He stressed the U.S. Government's interest in better
understanding China's Internet access regulations and
policies, and how such policies are made. Jeffery
said he recognized the two countries' differing views
on the issue, but hoped they could work together
toward greater mutual understanding and transparency.

8. (SBU) Cai seized on Jeffery's comments and spoke at
length without pausing for his interpreter. He agreed
on the importance of exchanging views in the area of
Internet administration. In recent years, Cai said,
the Chinese government has focused on how to best
adopt the experiences and practices of other countries,
and has sent teams abroad to study relevant foreign
laws and regulations. They have found, he said, that
all countries set Internet policies based on their own
national conditions. Nevertheless, he concluded,
dialogue and discussion are always valuable, no matter
how our two countries' individual views on this issue
may differ.

9. (SBU) Cai continued that the Chinese Government
shares its industry's interest in achieving concrete
results from future Internet Summits. Cai expressed
his preference to hold the next meeting in Washington,
DC or New York. He assured Jeffery that all relevant
Chinese Government representatives will also attend,
and will hope to use the opportunity to meet with
their U.S. Government counterparts, perhaps in a
closed-door session during the summit. Jeffery agreed,
and urged both sides to work to identify areas of
common interest, including greater access to
information, in the time before the next meeting. Cai
committed his Internet Affairs Bureau (SCIO's so-
called Bureau Five) to work with Embassy officials on
this issue.

SCIO to Regulate Financial Information Providers

BEIJING 00004453 003 OF 003

--------------------------------------------- ---

10. (SBU) In response to Jeffery's inquiry as to
whether SCIO would in fact be named the new regulator
of financial information providers, Cai confirmed that
his organization will take over this role from China's
Xinhua News Agency. The change, he said, is based on
the agreement reached between the United States, China,
and the European Union at the World Trade Organization
in Geneva. However, Cai said that this change is
still in the approval process, and explained that it
will not be final until the State Council promulgates
a new regulation to shift regulatory responsibility
from Xinhua. Following that, he added, the new
positions will be set up within SCIO, and internal
regulations will be amended as necessary to complete
the change. Jeffery hailed the result of the WTO
process as a good example of multilateral cooperation
and offered U.S. Government assistance as SCIO develops
its new regulatory responsibilities in this area. Cai
said the Chinese Government places great importance on
this issue.

Meeting Participants

11. (SBU) United States Participants: Under Secretary
of State for Economic, Energy, and Agricultural
Affairs Reuben Jeffery, III; Special Assistant Hugo
Yon; Embassy Economic Officer Geoffrey Siebengartner;
interpreter. Chinese Participants: State Council
Information Office Vice Minister Cai Mingzhao; SCIO
Internet Affairs Bureau Deputy Director General Liu
Zhenrong; Internet Affairs Bureau Director Gao Jianyun;
China Internet Media Research Center Director Zhao
Jianguo; interpreter.

12. (U) U/S Jeffery has cleared this cable.

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