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Cablegate: Guinea Bissau: Update for U.S./China Dialogue On

VZCZCXRO5799
PP RUEHMA RUEHPA
DE RUEHDK #0506/01 0641623
ZNR UUUUU ZZH
P 051623Z MAR 07
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 7740
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0111
RUEHBR/AMEMBASSY BRASILIA 0229
RUEHLC/AMEMBASSY LIBREVILLE 0930
RUEHLI/AMEMBASSY LISBON 0780
RUEHLU/AMEMBASSY LUANDA 0405
RUEHTO/AMEMBASSY MAPUTO 0439

UNCLAS SECTION 01 OF 02 DAKAR 000506

SIPDIS

SIPDIS
SENSITIVE

STATE FOR AF/RSA - D. EPSTEIN, AF/W AND EAP/CM
ACCRA FOR USAID/WA
PARIS FOR POL - D'ELIA

E.O. 12958: N/A
TAGS: ECON EFIN ENRG ETRD EAID PGOV PREL CH GB
SUBJECT: GUINEA BISSAU: UPDATE FOR U.S./CHINA DIALOGUE ON
AFRICA

REF: STATE 024937

SUMMARY
-------
1. (U) At a time when traditional Western donors are
proceeding slowly with budgetary and program assistance to
Guinea-Bissau, China is surging ahead with new trade and aid
programs for the impoverished nation. The PRC is still
focused on fishing but is also exploring agricultural
assistance, hydro-electric projects and other public works
projects. Chinese projects often fail to consider the local
context. END SUMMARY.

BACKGROUND
----------
2. (SBU) China,s influence in Guinea-Bissau is growing
relative to that of other donors. European concerns about
stability, fiscal responsibility, corruption, and drug
trafficking are having an impact on their donations to the
GOGB. Western assistance often comes with reporting and
performance requirements that the GOGB has little capacity or
in some cases, political will to meet. In contrast, Prime
Minister Aristides Gomes has publicly praised China, noting
that its assistance and trade packages come with no
conditionalities.

TRADE
-----
3. (U) For the most part, China is seeking access to
Guinea-Bissau,s rich fishing waters. And agreement on
Chinese access to Bissau-Guinean fishing waters yielded the
GOGB about USD 8 million last year and is one of the
government's principal sources of revenue. Chinese fishermen
sell their catch almost exclusively to European markets.

4. (U) During a two-day visit to Guinea-Bissau in January,
Chinese Foreign Minister Li Zhaoxing announced a package of
trade incentives including duty-free access to Chinese
markets. China will also assist Guinea-Bissau in
strengthening agricultural production and exports.
Initiatives include cooperation with Chinese technical
experts using an "online information system."

5. (U) Guinea-Bissau,s biggest agricultural export is
cashews and Zhaoxing announced USD 60 million in advance
contracts to support the coming harvesting and marketing
season. Another important product is rice, and Chinese
technicians are helping Bissau-Guinean producers improve
quality and increase yields. The PRC Embassy in Bissau told
Poloff that China has improved strains and rice cultivation
techniques that it plans to share.

6. (SBU) The growing Chinese presence is starting to be felt
in Guinea-Bissau. Most notably, two Chinese restaurants have
opened in Bissau thus far in 2007. Previously there were no
Chinese restaurants in the whole country. Low-cost Chinese
imports are starting to trickle into the marketplace,
offering more variety and lower costs to consumers, but in
some cases, also lower quality than goods traditionally
imported from Europe.

AID
---
7. (U) China promised USD one million in budgetary support
at the donor,s round table conference in Geneva in November.
Chinese assistance to Guinea-Bissau continues to grow,
especially in public works projects. Zhaoxing promised USD 8
million for new government buildings and USD 5 million for a
hydro-electric dam on the Geba River. In November 2006, the
GOGB announced China was giving an aid package of USD 8.7
million for development assistance, including the
construction of a military hospital and courthouse,
collaboration on deep-sea fishing, and exploration of oil
reserves. The Chinese Embassy in Bissau told Poloff that
China also sends several doctors to Guinea-Bissau to work in
hospitals and clinics around the country.

COMMENT
-------
8. (SBU) As in Senegal, we would like to ensure that U.S.

DAKAR 00000506 002 OF 002


and Chinese initiatives are complementary where our interests
converge. The PRC has been open about its activities in
Guinea-Bissau. However, encouraging the Chinese to engage in
projects that take better account of Guinea-Bissau's
realities is key. While the new National Popular Assembly
building is in use, the housing built for veterans sits empty
four years after completion because most Bissau-Guineans have
no history of or interest in living in multi-strory apartment
buildings. END COMMENT.
JACOBS

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