O 260714Z JUN 09
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC IMMEDIATE 4839
INFO AMEMBASSY TOKYO
AMEMBASSY SEOUL
AMEMBASSY MOSCOW
CIA WASHINGTON DC
JOINT STAFF WASHINGTON DC
DIA WASHINGTON DC
CDR USPACOM HONOLULU HI
OSD WASHDC
DEPT OF TREASURY WASHINGTON DC
NSC WASHDC

C O N F I D E N T I A L BEIJING 001761

E.O. 12958: DECL: 06/26/2034
TAGS: PREL PGOV PARM KNNP MOPS EFIN KN KS CH

SUBJECT: PRC/DPRK: CHINESE SCHOLARS ON UNSCR 1874 AND
POSSIBLE NEXT STEPS FOR CHINA AND WASHINGTON

Classified By: Deputy Political Section Chief Ben Moeling.
Reasons 1.4 (b/d).

SUMMARY
-------

¶1. (C) Chinese scholars in recent conversations with PolOff
said that Pyongyang's response to UNSCR 1874 had been "tepid"
so far and that North Korea's domestic political situation
did not appear to be tense.  The DPRK had not anticipated
such a strong reaction to its nuclear test from the
international community, especially from China and Russia.
Several contacts insisted that the Six-Party Talks were "not
dead yet" and remained a good framework to discuss the DPRK
nuclear issue.  Although Seoul and Tokyo would likely urge
Washington to take a harder line on the DPRK, Chinese
scholars urged the United States to take the lead on
resolving the North Korean nuclear problem and not be "led by
the nose" by its treaty allies.  One contact proposed a
U.S.-PRC-Russia trilateral dialogue to generate new ideas on
the future of Northeast Asia.  In light of the threat posed
by North Korea, a former MFA official said China should
strengthen its export control regime and target materials
related to uranium enrichment activities.  He also urged
Washington and Beijing to have a discussion about
strengthening the monitoring of illegal financial activities
during the Strategic and Economic Dialogue.  End Summary.

UNSCR 1874
----------

¶2. (C) Pyongyang's response to UN Security Council Resolution
(UNSCR) 1874 so far, including the June 13 Foreign Ministry
statement and the June 15 mass rally in Pyongyang, had been
"surprisingly tepid," claimed XXXXXXXXXXXX negotiations during a XXXXXXXXXXXX discussion.  Pyongyang's
threats to weaponize plutonium and begin enriching uranium
were "empty threats" and it was clear that North Korea had
run out of leverage.  XXXXXXXXXXXX opined that the DPRK had
miscalculated and had not anticipated that there would be
such a strong reaction to its nuclear test from the
international community, including China and Russia.
Pyongyang, he added, was "scared" of U.S. military pressure.

¶3. (C) XXXXXXXXXXXX noted in a XXXXXXXXXXXX conversation with PolOff
that senior North Korean leaders, including officials from
the influential National Defense Commission, were noticeably
absent from the Pyongyang rally protesting UNSCR 1874 that
had been attended by tens of thousands North Koreans.  This
signaled to XXXXXXXXXXXX that the domestic situation was not that
tense.

¶4. (C) Pyongyang, said XXXXXXXXXXXX, was unhappy with China's support
of Resolution 1874.  China would have no problem implementing
UNSCR 1874 but would do so in its "own way," he added.  XXXXXXXXXXXX
suggested that China's enforcement would elicit a reaction
from Pyongyang, and recalled that the DPRK Embassy had
complained to him previously about China's strict enforcement
of UNSCR 1718, especially with regard to inspection of
possible dual-use items.  Regarding new restrictions placed
on individual North Koreans, XXXXXXXXXXXX expressed concern that it
would be difficult for Chinese host organizations to confirm
the details of every individual North Korean participating in
a visiting delegation.

¶5. (C) XXXXXXXXXXXX,
urged the United States and other nations not to go beyond
the scope of the resolution.  He noted to PolOff in a XXXXXXXXXXXX
conversation that PRC President Hu Jintao had sought to have
a balanced response to the nuclear test by supporting
Resolution 1874 but had failed to fully please Washington or
Pyongyang.

Future Nuclear or Missile Tests?
--------------------------------

¶6. (C) Pyongyang would not conduct a third nuclear test
unless absolutely necessary, according  to XXXXXXXXXXXX.  He
predicted that North Korea was more likely to conduct a
missile test, but noted that missile tests were extremely
expensive for the regime.  North Korea's recent nuclear and
missile tests had been possible because the country had had
two consecutive years of good harvests, he speculated.

Six-Party Talks: "Not Dead Yet"
-------------------------------

¶7. (C) Several contacts insisted that the Six-Party Talks
remained a good framework to discuss the DPRK nuclear issue.
The Six-Party Talks were not "dead yet," said XXXXXXXXXXXX.  He urged the United States not to set any
preconditions on the DPRK returning to negotiations.  The
United States should be willing to talk to the DPRK so that
Pyongyang did not become "desperate."  The long-term
objective was still denuclearization of the Korean Peninsula
and the medium term aim was to prevent more missile and
nuclear tests and a regional arms race, said XXXXXXXXXXXX.

Washington Should Take the Lead
-------------------------------

¶8. (C) Several contacts urged the United States to take the
lead on resolving the DPRK nuclear issue.  Several suggested
it was essential that Washington not be "led by the nose" by
Tokyo and Seoul.  XXXXXXXXXXXX acknowledged that, for understandable
reasons, the ROK and Japan tended to take a harder line on
North Korea.  While the real threat to South Korea posed by
the DPRK nuclear test and missile launches was minimal, he
acknowledged the psychological threat the tests posed to the
ROK, especially to its economy.  While Washington should
certainly consult with Tokyo and Seoul, it should be wary of
being pushed by its allies to take a more strident position.
"Harsh enforcement" of UNSCR 1874 might push Pyongyang to
retaliate, cautioned XXXXXXXXXXXX.

¶9. (C) China was reluctant to be at the forefront of attempts
to resolve this issue, assessed XXXXXXXXXXXX.  Recalling
Beijing's failure to prevent the first DPRK nuclear test in
2006, XXXXXXXXXXXX admitted that China had a credibility issue.  He
expressed hope that Washington could come up with a bold
proposal to break the current deadlock.

¶10. (C) XXXXXXXXXXXX emphasized the importance of China-U.S.
cooperation and suggested that if Washington wanted to engage
in bilateral talks with Pyongyang, Beijing could help
facilitate the engagement and be a mediator.  XXX also
suggested a possible U.S.-PRC-Russia trilateral dialogue on
the future of Northeast Asia as a useful mechanism noting
that all three countries were members of both the Six-Party
Talks and the P5.

Sustainable Security
--------------------

¶11. (C) XXXXXXXXXXXX suggested that Sino-American cooperation on the
DPRK issue presented opportunities to address more
fundamental issues such as the concept of "sustainable
security."  XXXXXXXXXXXX noted that the United States, despite having
invested energy, money, and lives on the global war on
terror, had not necessarily increased the security of the
American people.  In the long-term, Beijing and Washington
needed to find ways to guarantee the strategic security of
other countries, including North Korea.  Doing so would
require less investment and offer greater security returns,
he suggested, emphasizing that military power alone would not
resolve the DPRK issue.  Peaceful multilateral processes,
such as the Six-Party Talks, would be more effective, he
concluded.

Strengthen Export Controls and Financial Sanctions
--------------------------------------------- -----

¶12. (C) XXXXXXXXXXXX said China was happy to see the adoption of
UNSCR 1874, but he questioned the effectiveness of the
counterproliferation and financial sanctions on the DPRK
regime.  According to XXXXXXXXXXXX, the DPRK had a limited stock of
plutonium, possibly enough for two more bombs, and did not
appear to have a working uranium enrichment program yet.
Thus, he concluded, Washington and Beijing should focus on
preventing the further development of the DPRK's uranium
enrichment program. XXXXXXXXXXXX suggested that China strengthen its
export control regime and target materials that North Korea
might need for its highly enriched uranium (HEU) program.
XXXXXXXXXXXX advised that the current level of risk posed by North
Korea's provocative behavior was "affordable" since North
Korea did not have any HEU in the pipeline or have a
sustainable source of fissile material.  However, once
Pyongyang developed its HEU capabilities, the situation would
become much more dangerous and difficult to resolve, warned
XXXXXXXXXXXX.

¶13. (C) On financial sanctions, XXXXXXXXXXXX urged the United States
and China to have a discussion about strengthening the
monitoring of illegal financial activities, possibly
including terrorism finance, corruption, and proliferation
finance during the Strategic and Economic Dialogue (S&ED).
It would be more effective, cheaper and less risky to
intercept financial transactions for proliferation-related
materials, especially since North Korea only had a few
financial outlets, than to enforce the interdiction of
contraband goods, suggested XXXXXXXXXXXX.  The global financial
crisis had spurred international cooperation on financial
matters and Washington and Beijing should take advantage of
this opportunity to enhance the monitoring of illegal
financial transactions.  He emphasized that this type of
monitoring should be done on a global scale, and not simply
targeted at the DPRK, said XXXXXXXXXXXX.
PICCUTA

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