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### Viewing cable 06BEIJING9290, MAY 16 MFA PRESS BRIEFING: IRAN, SCO, U.S.- CHINA

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BEIJING9290 | 2006-05-16 10:49 | 2011-08-23 00:00 | UNCLASSIFIED | Embassy Beijing

`

    VZCZCXRO6047
    OO RUEHCN RUEHDBU RUEHGH RUEHLN RUEHVK RUEHYG
    DE RUEHBJ #9290/01 1361049
    ZNR UUUUU ZZH
    O 161049Z MAY 06
    FM AMEMBASSY BEIJING
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 5555
    INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
    RUCNCIS/CIS COLLECTIVE IMMEDIATE
    RUEHRL/AMEMBASSY BERLIN IMMEDIATE 1321
    RUEHEG/AMEMBASSY CAIRO IMMEDIATE 0205
    RUEHIL/AMEMBASSY ISLAMABAD IMMEDIATE 6362
    RUEHRH/AMEMBASSY RIYADH IMMEDIATE 0532
    RUEHGV/USMISSION GENEVA IMMEDIATE 1049
    RUEHUNV/USMISSION UNVIE VIENNA IMMEDIATE 0922
    RHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATE

` `

    UNCLAS SECTION 01 OF 03 BEIJING 009290

    SIPDIS

    SIPDIS

    E.O. 12958: N/A
    TAGS: PREL PARM ECON CH IR KN JP
    SUBJECT: MAY 16 MFA PRESS BRIEFING: IRAN, SCO, U.S.- CHINA
    MILITARY RELATIONS, U.S. PRC BANK SANCTIONS,  CHINA-JAPAN
    ECS CONSULTATIONS, ZHAO YAN, RMB,  SINGAPORE, MERKEL'S
    VISIT, CHINA-ARAB COOPERATION  FORUM

    Summary
    -------

    ¶1.  Key points made at the May 16 MFA press briefing
    are as follows:

    - Beijing appreciates the positive efforts of the EU-3
    to resolve the Iran nuclear issue through dialogue.

    - The Shanghai Cooperation Organization (SCO) has
    invited leaders from all observer nations to attend
    the mid-June SCO Summit in Shanghai and China welcomes
    Iran's attendance.

    - China is positively considering Admiral Fallon's
    invitation to observe the U.S. military exercise in
    Guam.

    -  Asked about Washington's reported discussion of
    sanctions against some Chinese banks involved in
    illicit business activities with the DPRK, the MFA
    spokesperson expressed opposition to sanctions or the
    application of pressure in handling these issues.

    - The fifth round of China-Japan consultations on the
    East China Sea will be held May 18 in Tokyo and the
    decision whether to hold a foreign ministers' meeting
    in Qatar depends on consensus reached during bilateral
    discussions.

    - The MFA spokesperson had no specific information to
    offer on the case of detained NYT researcher Zhao Yan.

    - China is reforming its exchange rate regime in line
    with President Hu Jintao's statements during his April
    trip.

    - The spokesperson denied any link between Singaporean
    Minister Mentor Lee Kwan Yu's May 10-17 visit to China
    and KMT Chairman Ma Ying-jeou's recent trip to
    Singapore.

    - the first flight of the JF-17 "Xialong," a new
    light-weight fighter jet prototype reportedly
    developed jointly by China and Pakistan, took place on
    April 28 in Chengdu.

    - German Chancellor Angela Merkel will visit Beijing
    and Shanghai May 21-23.

    - Beijing will host the second China-Arab Cooperation
    Forum Ministerial Meeting May 31-June 1.  End Summary.

    Iran Nuclear Issue
    ------------------

    ¶2.  Beijing has not yet received the official text of
    the EU-3 proposal but appreciates the positive efforts
    of the EU-3 to resolve the Iran nuclear issue through
    dialogue, Spokesperson Liu Jianchao stated during the
    regular May 16 MFA press briefing in response to the
    Kyodo correspondent's question on the EU plan.  China
    hopes the European countries will present a rational,
    comprehensive and balanced proposal that is conducive
    to the realization of nonproliferation objectives,
    considers Iran's concerns and helps talks resume
    promptly.  Asked to comment on the Iranian Foreign
    Minister's reported rejection of the EU-3 plan, Liu
    called on the relevant parties to make constructive
    efforts to launch a "new round of diplomacy" and
    positively respond to the proposal.  These actions
    will promote diplomatic efforts and create conditions
    for a dialogue between the EU-3 and Iran.  Beijing
    will send a representative to attend the upcoming P-5
    plus one meeting in London and China remains in close
    contact with Iran, Liu said.

    SCO Foreign Ministers Meeting, Iran Invited to Summit
    --------------------------------------------- --------

    ¶3.  Liu announced that the Shanghai Cooperation

    BEIJING 00009290  002 OF 003

    Organization (SCO) Summit will be held in Shanghai in
    mid-June.  The SCO has launched an official website,
    www.scosummit2006.org, to offer information in
    Chinese, English and Russian on the June Summit.
    Asked whether Iran will attend the SCO Summit, Liu
    stated that based on the consensus reached by SCO
    members, leaders from all observer nations will be
    invited.  China will respect these countries'
    decisions and welcomes Iran's attendance, Liu said,
    but would not confirm which countries have already
    accepted the invitation.  Liu reported that the May 15
    SCO Foreign Ministers' Meeting in Shanghai laid the
    foundation for the Summit and that the Foreign
    Ministers discussed security, humanitarian and other
    areas of cooperation.  They also reached a broad
    consensus on counterterrorism efforts.

    China Considering U.S. Invitation on Military Exercise
    --------------------------------------------- ---------

    ¶4.  Asked for China's response to Admiral Fallon's
    invitation to the PLA to observe a U.S. military
    exercise in Guam, Liu commented hat China welcomes
    U.S. efforts to promote mutual understanding and
    relations between the two militaries.  China is
    positively considering the U.S. invitation, he said.

    U.S. Sanctions on PRC Banks Involved with the DPRK
    --------------------------------------------- -----

    ¶5.  Questioned by the AP correspondent about
    Washington's reported discussion of sanctions against
    Chinese banks linked to DPRK proliferation and other
    illicit activities, Liu asserted that the Chinese
    Government has taken a "clear and resolute" position
    on nonproliferation.  Beijing opposes the
    proliferation of weapons of mass destruction in any
    form and stands against any entity that conducts such
    activities.  However, China consistently opposes using
    sanctions or types of pressure to handle these issues.

    China-Japan East China Sea Consultations
    ----------------------------------------

    ¶6.  Liu announced that the fifth round of China-Japan
    consultations on the East China Sea will be held May
    18 in Tokyo and attended by MFA Asian Affairs
    Department DG Hu Zhengyue and his Japanese
    counterpart, Kenichiro Sasae.  The consultations will
    help expand consensus and narrow bilateral
    differences, but there is still a major gap between
    the two countries' positions.  Remarking that this is
    a complicated issue, Liu said there is no expectation
    of a breakthrough during the upcoming round of talks.
    China, nonetheless, will maintain a positive attitude
    in order to reduce differences.  Queried about the
    possibility of the Chinese and Japanese Foreign
    Ministers' meeting on the sidelines of the Asia
    Cooperation Dialogue (ACD) in Qatar, Liu remarked that
    the officials should "not meet for the sake of
    meeting."  China hopes that bilateral consultations
    will lead to a consensus on this issue, he said,
    stressing that the decision whether to conduct the
    meeting depends on the results of consultations.
    Beijing and Tokyo maintain unimpeded channels of
    communication and will remain in contact on the issue.

    Detained NYT Researcher Zhao Yan
    --------------------------------

    ¶7.  Asked about reported new charges brought against
    detained New York Times researcher Zhao Yan, Liu said
    that in the past he inquired into the case but
    currently has no specific information to offer, adding
    that the question should be referred to the relevant
    authorities.

    Exchange Rate Reform
    --------------------

    BEIJING 00009290  003 OF 003

    ¶8.  Asked about the recent appreciation of the RMB,
    Liu stated that the currency exchange rate has
    appreciated by 3.4 percent against the USD since last
    year.  The value of the RMB versus the USD has both
    risen and decreased, reflecting both changes in the
    major global currencies and the RMB's resilience.
    China is reforming its exchange rate regime in line
    with President Hu Jintao's statements during his April
    trip, according to Liu.

    Lee Kwan Yu's Visit
    -------------------

    ¶9.  Asked about the link between Singaporean Minister
    Mentor Lee Kwan Yu's visit to China and KMT Chairman
    Ma Ying-jeou's recent trip to Singapore, Liu denied
    any connection between the two events, noting that MM
    Lee's May 10-17 trip was planned far in advance.  Lee
    met with Premier Wen Jiabao and Vice President Zeng
    Qinghong.  Liu said Lee assessed positively the state
    of China-Singapore relations as well as China's
    economic and social achievements, reiterating
    Singapore's commitment to its one-China policy.

    China and Pakistan Launch New Fighter Jet Prototype
    --------------------------------------------- ------

    ¶10.  Asked about the recent flight of an aircraft
    reportedly developed jointly by China and Pakistan,
    Liu confirmed that the first flight of the JF-17
    "Xialong," a new light-weight fighter jet prototype,
    took place April 28 in Chengdu.  China and Pakistan
    maintain longstanding aviation cooperation and will
    remain in contact on further joint projects in this
    field, he stated.

    Chancellor Merkel to Visit
    --------------------------

    ¶11.  Liu reported that German Chancellor Angela Merkel
    will visit Beijing and Shanghai May 21-23.  She will
    meet President Hu and Premier Wen and hold a joint
    press conference.  Asked what types of economic deals
    are planned and whether Merkel will discuss the high-
    speed Maglev rail project, Liu noted that Chancellor
    Merkel will attend a high-tech cooperation forum and
    sign a series of agreements and contracts.  In 2005
    Germany-China trade reached 63.2 billion USD,
    comprising one third of total China-EU trade.  China
    has achieved breakthroughs in the development of the
    Maglev, in which China is prepared to cooperate with
    Germany.

    China-Arab Cooperation Forum
    ---------------------------

    ¶12.  Beijing will host the second China-Arab
    Cooperation Forum Ministerial Meeting May 31-June 1,
    Liu noted.  Chinese and Arab foreign ministers and the
    Arab League Secretary General will attend the meeting,
    which will discuss the "new China-Arab partnership."
    MFA West Asia and North African Affairs Department DG
    Zhai Jun will preview the forum to the press on May
    ¶17.
    RANDT

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