Mugabe’s indigenisation policy could change China’s stance towards pariah states


President Robert Mugabe’s erratic treatment of foreign economic interests could see China, which has hitherto shown that it is willing to put its need for markets and raw materials above the need to promote internationally accepted norms of behaviour; change its uncritical stance towards pariah states like Sudan, Zimbabwe, Burma and Iran.

This was the view of former United States ambassador to Beijing Clark Randt two years ago when he looked at the relations between the United States and China over the past 30 years and also at the 30 years to come. Randt was the longest serving US ambassador to Beijing.

According to one of the cables released by Wikileaks, Randt says new found interest in internationally accepted donor principles such as transparency, good governance, environmental and labour protections, and corporate social responsibility will have matured in 30 years´ time, making China a reliable partner for the United States, other donor countries, and international organisations in alleviating poverty, developing infrastructure, improving education and fighting infectious disease.

He says as one of the world´s premier economic powers, China can be expected to have all but discarded its over-worn and outdated “non-interference” rhetoric in the face of massive Chinese investment assets and other economic interests abroad.

“As evidenced by Chinese policies toward pariah states like Sudan, Zimbabwe, Burma and Iran, China is still willing to put its need for markets and raw materials above the need to promote internationally accepted norms of behaviour.

“However, the possible secession of southern Sudan (where much of the country´s oil is found) from the repressive Khartoum-based Bashir regime, the erratic treatment of foreign economic interests in Zimbabwe by Robert Mugabe, the dangers to regional safety and stability posed by Burma´s dysfunctional military junta, and the threat to China´s energy security that a nuclear-armed Iran would represent have given Beijing cause to re-calibrate its previously uncritical stance toward these international outlaws.

“If China´s integration into global economic and security structures continues apace, we would expect its tolerance for these sorts of disruptive players to decrease proportionately,” the cable says.

China is now the world’s second biggest economy and could overtake the United States within the next 20 to 30 years. It, however, seems to be strengthening its relations with Zimbabwe and recently lent the country $700 million. It, however, told the Zimbabwean government that it expects its investments in the country to be protected in view of the country’s indigenisation laws.


Full cable




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Reference ID






2009-01-06 08:08

2010-12-04 21:09


Embassy Beijing



DE RUEHBJ #0022/01 0060841


O 060841Z JAN 09
















E.O. 12958: DECL: 01/05/2034




Classified By: Ambassador Clark T. Randt. Reasons 1.4 (b/d)

1. (C) January 1, 2009, marked the 30th Anniversary of the

establishment of diplomatic relations between the United

States and the People´s Republic of China. This anniversary

followed the PRC commemoration of roughly 30 years of China´s

“reform and opening” policy under Deng Xiaoping, which led to

China´s staggering economic growth.

2. (C) Thirty years ago, China was just emerging from the

nightmare of the Cultural Revolution and 30 years of

fratricidal misrule. China´s economy was crippled by years

of disastrous policies like the Great Leap Forward. The

population was coming to terms with the world´s most

draconian population controls enacted in 1976 after decades

of Maoist state-subsidies encouraging large families.

Chinese foreign relations tended to be more influenced by

ideological yardsticks than economic links since China had

very few commercial links with the outside world. In 1979,

Chinese urbanites on average made the equivalent of five

dollars per month.

3. (C) Just as no one in 1979 would have predicted that China

would become the United States´ most important relationship

in thirty years, no one today can predict with certainty

where our relations with Beijing will be thirty years hence.

However, given the current significance of the bilateral

relationship and the risk of missing opportunities to jointly

address ongoing and predictable future challenges, below we

look at trends currently affecting China with an eye to how

those trends might affect relations. Several issues leap

out, including China´ insatiable resource needs, our growing

economic interdependence, China´s rapid military

modernization, a surge in Chinese nationalism, China´s

demographic challenges, and the PRC´s increasing influence

and confidence on the world stage.

4. (C) China has been plagued over the millennia by

unforeseen events that devastated formerly prosperous

regimes. Mongol invasion, the Black Death, uncountable

peasant uprisings, warlords, tax revolts, communist

dictatorship, colonialism, famine, earthquakes and other

plagues were largely unforeseen by the China watchers of the

past. This report focuses generally on more optimistic

projections. Given China´s history, however, the United

States should also gird itself for the possibility that China

will fall short of today´s mostly sanguine forecasts.

Resource Consumption


5. (C) Popular and scholarly works in recent years highlight

China´s growing demand for natural resources and the possible

impact that China´s pursuit of resources will have on its

foreign policy. Since economic reforms began in the late

1970s, industrial and exchange rate policies have fueled

investment in resource-intensive heavy industries in China´s

coastal region, which currently account for approximately 55

percent of the country´s total energy consumption today. A

construction boom over the past decade has also stimulated

growth in heavy industries. China is now a leading steel

producer and currently accounts for 50 percent of the world´s

annual cement production. Reflecting China´s emphasis on

resource-intensive industries, China´s energy utilization

rate grew faster than its GDP between 2002 and 2006. In

1990, China consumed 27 quadrillion British Thermal Units

(BTUs) of energy, accounting for 7.8 percent of global

consumption. In 2006, it consumed 68.6 quadrillion BTUs or

15.6 percent of the global total. According to U.S.

Department of Energy statistics, by 2030 China will account

for 145.5 quadrillion BTUs or 20.7 percent of global energy


6. (C) China´s oil demand has grown substantially over the

last 30 years. In 1980, China consumed 1.7 million barrels

of oil per day, almost all of which was produced

domestically. In 2006, China consumed 7.4 million barrels

per day, second only to the United States. According to the

International Energy Agency (IEA), China´s oil consumption

will reach 16.5 million barrels per day in 2030. More than

two thirds of the increased demand will come from the

transport sector as vehicle ownership rates rise. China

became a net importer of oil in 1993, and it now relies on

imports to meet a growing portion of its fossil fuel needs.

The IEA forecasts that China´s oil import dependence will

rise from 50 percent this year to 80 percent by 2030, as

domestic oil production peaks early in the next decade. To

strengthen the country´s future energy security, the Chinese

Government has adopted a “go out” policy that encourages

national oil companies (NOCs) to acquire equity stakes in

foreign oil and gas production. Today, state-owned Chinese

oil giants CNPC/PetroChina, CNOOC, and Sinopec can be found

in Sudan, Iran, Kazakhstan, Venezuela, Angola, and the

Caspian Basin.

7. (C) China has also increased its reliance on imported

minerals, and many analysts have attributed the global

commodities boom of recent years in part to China´s growing

demand. Between 1980 and 2006, China became the world´s

largest consumer of iron, copper and aluminum. Chinese

conglomerates are ubiquitous in sub-Saharan Africa exploiting

mineral wealth there, and Chinese multinationals have

significant investments in Australian mineral and uranium


8. (C) China´s reliance on coal has come at an appalling

environmental cost. This year, China surpassed the United

States in carbon emissions, and it will soon become the

world´s biggest energy consumer. Between now and 2030, the

IEA estimates, China will need to add 1,312 gigawatts of

power generating capacity, more than the total current

installed capacity in the United States. Coal-fired power

generation, a major source of air pollution, accounts for

approximately 78 percent of China´s total electricity supply,

and it will likely remain the predominant fuel in electricity

generation for at least the next 20 years. Analysts predict

that domestic coal production will peak in the next 15 to 25

years. China already became a net importer of coal in 2007,

and coal imports are expected to grow in the coming decades

to meet growing demand in China´s coastal provinces.

9. (C) The Chinese Government recognizes the need to reduce

dependence on coal, and it is pursuing policies to diversify

its energy mix. China is already the largest producer of

renewable energy in the world, with major investments in

large-scale hydro and wind power projects. Nuclear and

natural gas power will also account for a greater proportion

of energy production, but under current projections, efforts

to diversify China´s energy mix will not have a large enough

impact to curb greenhouse gas emissions growth.

10. (C) China´s energy intensive growth has also had tragic

consequences for public health. By most measurements, at

least half of the world´s most polluted major cities are in

China. Rural residents, in particular farmers, have been

affected by water pollution and dwindling water supplies,

which are frequently redirected for industrial use.

Respiratory disease, water-borne illness and tainted food

scares are facts of modern life in the country. According to

a recent WHO study, diseases caused by indoor and outdoor air

pollution kill 656,000 Chinese citizens every year. Another

95,600 deaths are attributed annually to polluted drinking


11. (C) China´s increasing reliance on imported natural

resources has foreign policy ramifications and provides

opportunities for the United States. A China that is

increasingly dependent on Middle Eastern oil might be more

likely to support policies that do not destabilize the Middle

East. Take Iran, for instance. We have long been frustrated

that China has resisted (with Russia) tough sanctions aimed

at curbing Iran´s nuclear program. In the future, a China

increasingly dependent on foreign energy supplies may

recalculate the risk a nuclear Iran would pose to the greater

Persian Gulf region´s capacity to export oil.

12. (C) Another opportunity presented by China´s increasing

resource consumption is in the joint development of

technological responses to reduce carbon emissions and to

diminish the public health impact of industrial growth.

Scientific publications around the world conclude that the

projected rate of global energy and natural resource

consumption is unsustainable. Experts warn that we must find

alternative forms of energy in order to avert calamities

posed by global climate change. International efforts to

develop and significantly utilize renewable energy, clean up

our shared global environment, and conserve our remaining raw

materials will not be effective without meaningful Chinese

participation. As the world´s preeminent technological power

and as a leader in multilateral energy and scientific

organizations, the United States is in a unique position to

work with China to overcome these challenges.

Economic Interdependence and Chinese Demographics

——————————————— —-

13. (C) In the next fifteen years, while China´s overall

population is predicted to stabilize, its urban population

will likely grow to almost 1 billion, an increase (of 300

million people) equal to the entire current population of the

United States. China plans to build 20,000 to 50,000 new

skyscrapers over the next two decades — as many as ten New

York cities. More than 170 Chinese cities will need mass

transit systems by 2025, more than twice the number now

present in all of Europe. China is now surpassing Germany as

the world´s third largest economy and is projected to

overtake Japan within the next five years. By the end of the

next thirty years, China´s economy could rival the United

States in overall scale (although its per capita income will

likely only be one quarter of the United States´).

14. (C) Behind these outward symbols of success will be an

increasingly complicated economic picture. Since 1979, by

reversing the misguided economic policies of the Mao era,

liberalizing labor markets and prices, opening to foreign

investment, and taking advantage of the West´s

consumer-driven policies, China has maintained fast growth.

However, the set of circumstances that allowed such

impressive growth rates will no longer exist in the future.

15. (C) Many speculate that China has reached the limit to

easy productivity gains by rationalizing the state-planned

economy. The Economist Intelligence Unit expects China´s

annual growth to slow from around 10 percent in the last 30

years to 4.5 percent by 2020. After 2015 when the labor

force peaks as a share of the population, labor costs will

rise faster. This will increasingly make other countries

like India and Vietnam more attractive for labor-intensive

investment. In addition, workers will have to support a

growing number of retirees. Early retirement ages combined

with the urban one-child limits creates the so-called “4-2-1?

social dilemma: each worker will have to support four

grandparents, two parents and one child. Savings rates will

start falling as the elderly draw down their retirement


16. (C) China will have to manage an economy increasingly

dependent on domestic consumption and service industries for

growth. Already, urbanites are buying 1,000 new cars per

day, making China the world´s largest Internet and luxury

goods market, and traveling abroad in growing numbers. By

2025, China will have the world´s largest middle class, and

China will likely have completed the transition from the

majority rural population of today to a majority urban

population. These consumers of tomorrow will likely flock to

products from around the world as their North American,

European and Japanese counterparts do today, providing new

opportunities for American business. If incomes continue to

grow, it is likely that the Chinese middle class will react

like educated urbanites in other countries by exerting

pressure on the Government to improve its dismal performance

on environmental protection, food and product safety. We are

already seeing increased public activism over such issues


17. (C) China will face a challenge in the next thirty years

encouraging this urban consumption while dealing with the

social equality issues inherent in a rural population where

over 200 million people still live on less than a dollar a

day. China will also have to find a way to improve the lot

of between 150 and 230 million migrant workers who today must

leave their children and aging parents behind in their home

villages to travel to the industrial centers of the

relatively developed coastal regions to work in factories or

on construction projects.

18. (C) With China´s phenomenal growth has come increased

economic interdependence. This will likely increase,

although some of the less-balanced elements of China´s

economic interactions should be mitigated. Rising

consumption rates should work to lower China´s trade surplus

as well as its overabundance of foreign exchange reserves.

More assets controlled by corporations and individuals, as

opposed to the government, will diversify outward investment,

reducing political control by Beijing, but also the utility

of political suasion for U.S. policymakers interested in

effecting the flow of capital to international hotspots.

Chinese Nationalism and Confidence on the International Stage

——————————————— —————-

19. (C) As one of two main pillars of post-Mao Chinese

Communist Party rule (the other being sustained economic

growth), Chinese nationalism is growing and should be

monitored closely. As witnessed during the 2008 Beijing

Olympics, Chinese are increasingly proud of the tremendous

strides their country has made in recent years. More and

more young people see China as having “arrived” and might

possess the confidence and willingness to assume the

responsibilities of a major power. However, as was evident

during protests over the 1999 mistaken bombing of the Chinese

Embassy in Belgrade, the 2004 protests over Japanese

textbooks, and more recently the anti-France diatribes that

followed the roughing-up of a disabled Olympic torch bearer

in Paris by Free Tibet supporters, this nationalism can also

lead to jingoism. Chinese leaders of a system with few

outlets to express political sentiments are faced with trying

to give vent to the occasional uprising of nationalistic

anger without letting it get out of hand or allowing it to

focus on the failings of the central leadership.

20. (C) With notable exceptions like Zhou Enlai, Chinese

foreign policy practitioners thirty years ago had little

practical experience dealing with the West. Since then,

Chinese diplomats and subject matter experts are increasingly

well-educated, well-traveled and well-respected. Chinese

diplomats at international fora such as the UN and the WTO

have become adept at using procedural rules to attain

diplomatic or commercial ends. This trend will likely

continue in the coming decades, increasing the likelihood of

American decision makers finding more able adversaries when

we disagree on issues, but also more able partners where we

can agree to jointly tackle a problem of mutual concern such

as nonproliferation, alternative energy or pandemic


21. (C) While still reluctant to claim China is a global

leader, Chinese officials are gradually gaining confidence as

a regional power. By the end of the next 30 years, China

should no longer be able to portray itself as the

representative of lesser developed countries. This does not

mean that it will necessarily identify with the more

developed, mainly Western countries; it well might choose to

pursue some uniquely Chinese path. In the coming 30 years, a

U.S. President might be involved in negotiations with a

Chinese leader seeking to reshape global financial

institutions like the IMF or the WTO or establish rival

institutions for non-Western countries in order to mitigate

domestic Chinese concerns. Even so, China´s growing position

as a nation increasingly distinct from the less-developed

world may expand our common interests and make it easier for

the United States to convince China to act like a responsible

global stakeholder.

22. (C) Foreign assistance coordination is another area of

opportunity. China is rapidly ramping up its global economic

presence, not only via resource extraction ventures and cheap

exports, but increasingly via direct investment and

assistance. This investment and assistance are welcome in

most less-developed countries, whether in Africa or Southeast

Asia, and particularly in countries where China´s

longstanding policy of “no strings attached no political

interference” appeals to democratically-challenged dictators

and kleptocrats. However, China is already facing blowback

as a result of its more cavalier approach to issues that more

scrupulous donors have wrestled with for decades. Scant

attention paid to worker safety, job opportunities for local

people, environmental protection, and political legitimacy

has had negative consequences for China on multiple

occasions, from a tarnished international image and being

used as a political whipping boy by opposition groups in

democratic countries to unpaid loans, expropriated

investments, and even the deaths of Chinese expatriates. As

a result, China is beginning to understand the merits of

international assistance standards not for altruistic

reasons, but for achieving China´s own bottom-line

imperatives of a more secure international position and

better-protected economic interests in third countries. This

realization, coupled with China´s growing economic clout on

the world stage, make it quite possible that, in the next 30

years, China will come to be identified by the average

citizen in less developed countries not as “one of us” but as

“one of them.”

23. (C) In all likelihood, a new-found (if still somewhat

grudging) PRC interest in internationally accepted donor

principles such as transparency, good governance,

environmental and labor protections, and corporate social

responsibility will have matured in 30 years´ time, making

China a reliable partner for the United States, other donor

countries, and international organizations in alleviating

poverty, developing infrastructure, improving education and

fighting infectious disease. And as one of the world´s

premier economic powers, China can be expected to have all

but discarded its over-worn and outdated “non-interference”

rhetoric in the face of massive Chinese investment assets and

other economic interests abroad.

24. (C) As evidenced by Chinese policies toward pariah states

like Sudan, Zimbabwe, Burma and Iran, China is still willing

to put its need for markets and raw materials above the need

to promote internationally accepted norms of behavior.

However, the possible secession of southern Sudan (where much

of the country´s oil is found) from the repressive

Khartoum-based Bashir regime, the erratic treatment of

foreign economic interests in Zimbabwe by Robert Mugabe, the

dangers to regional safety and stability posed by Burma´s

dysfunctional military junta, and the threat to China´s

energy security that a nuclear-armed Iran would represent

have given Beijing cause to re-calibrate its previously

uncritical stance toward these international outlaws. If

China´s integration into global economic and security

structures continues apace, we would expect its tolerance for

these sorts of disruptive players to decrease


25. (C) China´s work in the Six-Party Talks and the Shanghai

Cooperative Organization may provide guidance as to how to

accelerate this trend. China plays a leading and often

responsible and constructive role in both of these

multilateral groups. Future U.S. policy-makers might

usefully consider additional international mechanisms that

include both U.S. and Chinese membership such as the proposed

Northeast Asia Peace and Security Mechanism that may grow out

of the Six-Party Talks. The Chinese themselves have

suggested a Six-Party Talks-like grouping to address the Iran

nuclear issue, perhaps a P5-plus-1-plus-Iran. In the future,

we may wish to consider the United States joining the East

Asia Summit (EAS).

26. (C) Likewise, as the Chinese economy takes up a larger

portion of the global economy, it inevitably will become

increasingly affected by the decisions of international

economic and financial institutions. Similarly, China´s

economic decisions will have global implications, and its

cooperation will become essential to solving global-scale

problems. Drawing China constructively into regional and

global economic and environmental dialogues and institutions

will be essential. More and more experts see the utility of

establishing an Asia-Pacific G-8, to include China, Japan,

and the United States plus India, Australia, Indonesia, South

Korea and Russia; others say the time is ripe to include

China as a member of a G-9. Giving China a greater voice is

seen as a way to encourage China to assume a larger burden in

supporting the international economic and financial system.

Role of the Military


27. (C) The disparate possibilities exist that in the coming

decades the PLA will evolve into a major competitor, maintain

only a regional presence or become a partner capable of

joining us and others to address peacekeeping,

peace-enforcing, humanitarian relief and disaster mitigation

roles around the world. China may be content to remain only

a regional power, but Deng Xiaoping´s maxim urging China to

hide its capabilities while biding its time should caution us

against predicting that the PLA´s long-term objectives are

modest. In the years to come, our defense experts will need

to closely monitor China´s contingency plans and we will need

to use every diplomatic and strategic tool we have to prevent

intimidating moves toward Taiwan. In the coming years,

Chinese defense capabilities will continue to improve. The

PLA thirty years from today will likely have sophisticated

anti-satellite weapons, state-of-the-art aircraft, aircraft

carriers and an ability to project force into strategic sea


28. (C) Thirty years ago the PLA was a bloated political

organization with antiquated equipment and tactics. Today,

the PLA is leaner and is becoming a modern force. Chinese

military and paramilitary units have participated in

UN-sponsored peacekeeping missions in East Timor, Kosovo,

Haiti and Africa. In December 2008, for the first time, the

PLA Navy deployed beyond the immediate waters surrounding the

country to participate in anything beyond a goodwill tour to

combat piracy off the Horn of Africa. It is likely that

China will continue to support UN-sponsored PKOs, and if the

piracy expedition is successful, China might follow up with

expeditions to future piracy hotspots such as the Strait of

Malacca or elsewhere.

29. (C) Over the past thirty years, Chinese officials have

come to begrudgingly acknowledge the benefits to East Asia

resulting from the U.S. military presence in the Pacific,

especially the extent that a U.S. presence in the Pacific is

an alternative to a more robust Japanese military presence.

A peaceful resolution of the threat posed by North Korea

might cause China to call for an end to the U.S. base

presence on the Korean Peninsula. Perceived threats to

China´s security posed by Japan´s participation in missile

defense or by future high-tech U.S. military technologies

might cause tomorrow´s Chinese leaders to change their

assessment and to exert economic pressures on U.S. allies

like Thailand or the Philippines to choose between Beijing

and Washington.

30. (C) Whatever the state of our future relations with

China, we will need to understand more about the Chinese

military. Multilateral training and exercises are

constructive ways to promote understanding and develop joint

capabilities that could be used in real-life situations. In

the coming years, the Chinese may be called upon to

participate in regional peacekeeping and humanitarian relief

exercises. Some of these could be handled under UN auspices,

but others could be bilateral or multilateral. For instance,

Cobra Gold, which is held every year in Thailand, is

America´s foremost military exercise in Asia. It has a

peacekeeping component and since the December 2004 tsunami in

Indian Ocean has included a humanitarian relief element.

With proper buy-in by the Pentagon and PACOM, we could create

a program to engage the PLA more directly both with our

military and with friendly militaries in the region. Modest

efforts at expanding search and rescue capabilities on the

high seas, developing common forensic techniques for use in

mass casualty events, conducting exercises with PLA units

tasked with responding to civil nuclear emergencies, or

table-top exercises for U.S. and Chinese junior officers

could be steps that promote trust with little risk. At the

same time, more frequent, regularly scheduled high-level

reciprocal visits between Chinese and U.S. security officials

might eventually lead to a constructive strategic security

policy dialogue on nonproliferation, counterterrorism and

other issues.

Taiwan and Human Rights


31. (C) Taiwan was the most vexing issue holding up the

establishment of relations 30 years ago and remains the

toughest issue for U.S.-China relations despite significant

improvement in cross-Strait relations since the election of

Taiwan President Ma. It will remain a delicate topic for the

foreseeable future. We should continue to support Taiwan and

Mainland efforts to reduce tension by increasing Taiwan´s

“international space” and reducing the Mainland´s military

build-up across from Taiwan.

32. (C) Thirty years ago, the Chinese state interfered in

virtually every aspect of its citizens´ lives. An

individual´s work unit provided housing, education, medical

care and a burial plot. Reeducation sessions and thought

reform were common, churches and temples were closed, and

average citizens had little access to the outside world.

Today, Chinese have far greater ability to travel, read

foreign media and worship. Nonetheless, the overall human

rights situation falls well short of international norms.

Today, China´s growing cadre of well-educated urbanites

generally avoids politics and seems more interested in

fashion and consumerism than in ideology; after all,

outside-the-box political thinking, much less activism,

remains dangerous. However, any number of factors in the

future ranging from rising unemployment among recent college

graduates, or growing discontent over the income divide

separating rich urbanites from poor peasants, to discontent

among the mass of migrant workers could lead to unrest and

increased political activism. The Chinese Government still

responds with brutal force to any social, religious,

political or ideological movement it perceives as a potential

threat. Chinese political leaders´ occasional nods toward

the need for political reform and increased democracy suggest

a realization that the current one-party authoritarianism has

its weak points, but do not promise sufficient relaxation of

party control to create a more dynamically stable polity in

the long term.

33. (C) While the U.S. model of democracy is not the only

example of a tolerant open society, we should continue to

push for the expansion of individual freedoms, respect for

the rule of law and the establishment of a truly free and

independent judiciary and press as being necessities for a

thriving, modern society and, as such, in China´s own

interests. Someday, China will realize political reform.

When that day comes, we will want to be remembered by Chinese

for having helped China to advance.



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