Thursday, 04 June 2009, 09:08
S E C R E T SINGAPORE 000529
EO
12958 DECL:
06/04/2029
TAGS OVIP">OVIP (STEINBERG,
JAMES B.), PREL, MNUC,ECON, SN, CH,
KN
SUBJECT:
DEPUTY SECRETARY STEINBERG'S MAY 30, 2009
CONVERSATION WITH SINGAPORE MINISTER MENTOR LEE KUAN YEW
Classified By: Charge d'Affaires Daniel L. Shields. Reason 1.4 (b)
and (d).
1. (SBU) May 30, 2009; 6:30
p.m.; The Presidential Palace; Singapore.
2. (SBU) Participants:
United States
-------------
The Deputy Secretary Glyn T. Davies, EAP Acting Assistant Secretary
Daniel L. Shields, CDA (Notetaker)
SINGAPORE
---------
Minister Mentor (MM) Lee Kuan Yew Chee Hong Tat, Principal Private
Secretary to MM Cheryl Lee, Country Officer, Americas Directorate,
MFA
3. (S) SUMMARY: Deputy Secretary Steinberg used his meeting with
Minister Mentor Lee Kuan Yew to stress the importance of Chinese
cooperation in addressing theNorth
Korea nuclear issue and to elicit MM Lee's views
on China and
North Korea. MM Lee said the Chinese do not want North Korea to
have nuclear
weapons and do not want North Korea to collapse. If China
has to choose, Beijing sees a North Korea with nuclear weapons as
less bad than a North Korea that has collapsed. MM Lee asked Deputy
Chief of the People's Liberation Army (PLA) General Staff Ma
Xiaotian what China can do about North Korea. General Ma's answer
was that "they can survive on their own." The Deputy Secretary
noted that the DPRK could have a fair and attractive deal if it
would change its approach. If not, North Korea faces a change of
course by the United States, the ROK and Japan. MM Lee said he
believes Japan may well "go nuclear." MM Lee also offered views on
the Chinese economy, Taiwan,
Chinese leaders, and U.S.-China relations. End Summary.
China and North Korea
---------------------
4. (S) Deputy Secretary Steinberg met with Singapore Minister
Mentor Lee Kuan Yew on May 30 on the margins of the Shangri-La
Dialogue, the annual international security forum held in
Singapore. The Deputy Secretary used the meeting with MM Lee to
stress the importance of Chinese cooperation in addressing the
North Korea nuclear issue and to elicit MM Lee's views on China and
North Korea. MM Lee said the Chinese do not want North Korea to
have nuclear weapons. At the same time, the Chinese do not want
North Korea, which China sees as a buffer state, to collapse. The
ROK would take over in the North and China would face a U.S.
presence at its border. If China has to choose, Beijing sees a
North Korea with nuclear weapons as less bad for China than a North
Korea that has collapsed, he stated.
5. (S) MM Lee said he asked Deputy Chief of the People's Liberation
Army (PLA) General Staff Ma Xiaotian what China can do about North
Korea. General Ma's Delphic answer was that "they can survive on
their own." MM Lee said he interpreted this as meaning that even if
China cut off aid, the DPRK leadership would survive. This is a
leadership that has already taken actions like killing ROK Cabinet
Members in Burma and shooting down a KAL flight. If they lose
power, they will end up facing justice at The Hague, like
Milosevic. They have been so isolated for so long that they have no
friends, not even Russia. They have not trusted China since the
Chinese began cultivating ties with the ROK, given China's interest
in attracting foreign investment, he said. The Deputy Secretary
noted that the DPRK could have a fair and attractive deal if it
would change its approach. If not, North Korea faces a change of
course by the United States, the ROK and Japan. MM Lee expressed
worry about the effect on Iran if the DPRK persists. MM Lee said he
believes the DPRK can be contained and will not proliferate, but
Iran has very high ambitions, ties to Shiite communities outside
Iran, and oil wealth.
6. (S) The Deputy Secretary noted that North Korea's decisions will
have an impact in Japan. MM Lee said he believes Japan may well "go
nuclear." The Chinese must have factored this into their
calculations and concluded that the prospect of Japan with nuclear
weapons is less bad than losing North Korea as a buffer state. The
Chinese take a long-term view and must think that within a few
years the DPRK's current leadership will be gone and there will be
new leadership, with new thinking. But there will still be a North
Korea, he said.
7. (S) MM Lee said he wishes the USG
well in its efforts on North Korea, but he would be surprised if
the North Koreans agree to give up nuclear weapons. They might give
up a first-strike capacity, but they want nuclear weapons in case
the USG decides to seek regime change. They
are psychopathic types, with a "flabby old chap" for a leader who
prances around stadiums seeking adulation. MM Lee noted that he had
learned from living through three and a half years of Japanese
occupation in Singapore that people will obey authorities who can
deny them food, clothing and medicine.
8. (S) MM Lee said the ROK, after seeing what had happened with
German unification, does not want immediate unification with the
DPRK. There is "nothing there" in the DPRK, other than a military
organization. Kim Jong-Il has already had a stroke. It is just a
matter of time before he has another stroke. The
next leader may not have the gumption or the bile of his father or
grandfather. He may not be prepared to see people die like
flies. China is calculating all this. They have their best men
on the job. They want to help the United States to advance common
objectives. But they do not want the South to take over the North,
MM Lee said.
Chinese Economy
---------------
9. (C) Regarding the Chinese economy, MM Lee said the global
economic crisis has hit many countries, but the feel on the ground
differs considerably from place to place. The Chinese economy is
reportedly in the doldrums, but when MM Lee visited Jiangsu
Province on May 24, his impression was one of continued prosperity.
Shanghai has been harder hit, with container port traffic down
30-35 percent, similar to the situation in Singapore. There is no
sign of deep unrest in China. The Chinese are very confident they
will be able to sustain eight percent growth. The government is
pumping resources into the economy, with a focus on developing
Western China. Whether such policies can be sustained for three to
four years is unclear, but China can certainly sustain these
policies for at least a year, he said.
10. (C) MM Lee stated that in the absence of a social safety net in
China, the Chinese savings rate is 55 percent, exceeding even
Singapore's 50 percent level. Consumption accounts for only 35
percent of Chinese GDP, as opposed to 70 percent of U.S. GDP. The
Chinese leadership may be loath to shift permanently to a more
consumption-oriented economy, but the leadership will do so
temporarily, if only to avoid unrest. 20 million people have moved
back to the countryside because of economic dislocations. The
government is providing microfinance to facilitate the transition.
The pragmatists are in charge. There is nothing Communist about it.
They just want to preserve one party rule. The Deputy Secretary
expressed concern that current Chinese policies designed to counter
the economic crisis could undermine reform. MM Lee said this cannot
be helped. China wants to prevent riots like the ones that happened
in Guangzhou in March when Hong Kong-connected enterprises suddenly
shut down, he said.
Taiwan
------
11. (C) The Deputy Secretary asked MM Lee for his assessment of
Taiwan. MM Lee said former President Chen Shui-bian had left Taiwan
in a weak economic position, which had enabled President Ma
Ying-Jeou to come to power with his pledge to strengthen the
economy through means including expanding the three links with
China. In Beijing, former President Jiang Zemin was wedded to his
eight-point approach, but President Hu
Jintao was more flexible. Jiang wanted to show he was a
great man by solving the Taiwan issue in his lifetime, but Hu is
more patient and does not have any fixed timeline. In Chinese
domestic politics, Hu had wanted Vice Premier Li Keqiang from the
Communist Youth League to emerge as his successor, not Vice
President Xi Jinping, but Hu did his calculations and accepted Xi
when it became clear that Xi had the necessary backing from the
rest of the leadership. Similarly, on Taiwan, Hu will be pragmatic.
It does not matter to Hu if it takes 10 years or 20 or 30. The key
is building links with Taiwan. As in the case of Hong Kong, if
necessary the tap could be turned off, he said.
12. (C) In this context, MM Lee said, Hu could live with Ma's
positions on the '92 consensus and on not addressing the
reunification issue during his term in office. What mattered to Hu
was that Taiwan not seek independence. If that happened, China has
1,000 missiles and is building its capacity to hold the U.S. fleet
at a distance. The implicit question for Taiwan's leaders is if
that is what they want, MM Lee said.
13. (C) MM Lee stated that the alternative is Mainland investment
in Taiwan stocks and property. The Mainland has already assured
Hong Kong that it will help out economically. The Mainland has not
said this to Taiwan, but the Mainland's Taiwan Affairs Director,
Wang Yi, did urge Chinese companies to invest in Taiwan. In four
years Taiwan's economy will pick up and Ma will win re-election.
The DPP lacks strong potential candidates. Su Zhen-chang is
promising, but seems unlikely to be able to win. Meanwhile, even
the traditionally DPP-supporting farmers in Taiwan's South need
China's market for vegetables and other products. Taiwan's
continued participation in the World Health Assembly depends on
Beijing. Beijing's calculation seems to be to prevent Taiwan
independence in the near term, then bring Taiwan "back to China,"
even if it takes 40 or 50 years. MM Lee said he is looking forward
to visiting Fujian Province, where preparations are underway for a
new southern economic area linked with Taiwan.
Xi Jinping
----------
14. (C) The Deputy Secretary asked if in the future a leader like
Xi Jinping would continue the policies on Taiwan followed by Hu
Jintao. MM Lee responded affirmatively. Xi is a princeling who
succeeded despite being rusticated. When the party needed his
talents, Xi was brought in as Shanghai Party Secretary. Xi is seen
as a Jiang Zemin protege, but in another three and a half years
Jiang's influence will be gone. The focus now is on maintaining the
system. There are no more strongmen like Deng Xiaoping. Jiang did
not like Hu, but could not stop him, because Hu had the backing of
the system and he did not make mistakes.
Wang Qishan
-----------
15. (C) MM Lee said Vice Premier Wang Qishan, whom the MM saw in
connection with celebrations in May of the 15th anniversary of
Singapore-China Suzhou Industrial Park, is an exceptional talent,
very assured and efficient. Wang handled SARS superbly when he was
in Hainan. He excelled in coordinating the Beijing Olympics. Li
Keqiang may not get the Premiership and the Party is looking for a
way to keep Wang on past his 65th birthday until he is 70. MM Lee
said he had met first Wang back in the 1990s but had forgotten
their meeting. This time when they met, Wang told Lee he had
reviewed the records of all Lee's meeting with Chinese leaders
going back to the days of Deng Xiaoping to see how Lee's thinking
had developed. Wang told Lee he respects him as a consistent
man.
China's Rise
------------
16. (C) MM Lee said China is following an approach consistent with
ideas in the Chinese television series "The Rise of Great Powers."
The mistake of Germany and Japan had been their effort to challenge
the existing order. The Chinese are not stupid; they have avoided
this mistake. China's economy has surpassed other countries, with
the exceptions of Japan and the United States. Even with those two
countries, the gap is closing, with China growing at seven-nine
percent annually, versus two-three percent in the United States and
Japan. Overall GDP, not GDP per capita, is what matters in terms of
power. China has four times the population of the United States.
China is active in Latin America, Africa, and in the Gulf. Within
hours, everything that is discussed in ASEAN meetings is known in
Beijing, given China's close ties with Laos, Cambodia, and Burma,
he stated.
17. (C) MM Lee said China will not reach the American level in
terms of military capabilities any time soon, but is rapidly
developing asymmetrical means to deter U.S. military power. China
understands that its growth depends on imports, including energy,
raw materials, and food. This is why China is working with South
Africa on the China-Africa Development Fund. China also needs open
sea lanes. Beijing is worried about its dependence on the Strait of
Malacca and is moving to ease the dependence by means like a
pipeline through Burma.
Build Ties with Young Chinese
-----------------------------
18. (C) MM Lee said the best course
for the United States on China is to build ties with China's young
people. China's best and brightest want to study in the United
States, with the UK as
the next option, then Japan. While they are there, it is important
that they be treated as equals, with the cultural support they may
need as foreigners. Why not have International Military Education
and Training (IMET) programs for China? Why not have Chinese cadets
at West Point alongside Vietnamese cadets and Indian cadets?
America's advantage is that it can make use of the talent of the
entire world, as in Silicon Valley. China still tends to try to
keep the foreigners in Beijing and Shanghai.
MM Lee noted that his own experience as a student
in the UK had
left him with an enduring fondness for the UK.
When he spent two months at Harvard
in 1968, an American professor had invited him home for
Thanksgiving. This was not the sort of thing that happened in
the UK,
and Lee had realized he was dealing with a different civilization.
In the future, China's leaders will have PhDs and MBAs from
American universities, he predicted.
19. (U) The Deputy Secretary has cleared this message.
Visit Embassy Singapore's Classified website:
http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm
SHIELDS
http://www.guardian.co.uk/world/us-embassy-cables-documents/210110
