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Cablegate: Strengthening China Ties, Foreign Minister Yang Jiechi In

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PP RUEHROV
DE RUEHDS #0194/01 0250623
ZNR UUUUU ZZH
P 250623Z JAN 08
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC PRIORITY 9296
RUEHBJ/AMEMBASSY BEIJING 0448
INFO RUCNIAD/IGAD COLLECTIVE PRIORITY
RHMFISS/CJTF HOA PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEKDIA/DIA WASHINGTON DC PRIORITY
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUEHJB/AMEMBASSY BUJUMBURA 0028
RUEHKI/AMEMBASSY KINSHASA 0405
RUEHSA/AMEMBASSY PRETORIA 4658

UNCLAS SECTION 01 OF 02 ADDIS ABABA 000194

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL EAID EINV ET CH
SUBJECT: STRENGTHENING CHINA TIES, FOREIGN MINISTER YANG JIECHI IN
ETHIOPIA

1. (U) Summary: Chinese Foreign Minister Yang Jiechi visited
Ethiopia at the end of a four country tour of Africa. During a
quick one-day stop, Yang met with Prime Minister Meles and Foreign
Minister Seyoum on Somalia, Sudan, Eritrea, bilateral programs, and
China's outreach to Africa. The largest investor in Ethiopia,
primarily through soft loans amounting to over USD 2 billion, China
has focused on the telecommunications, energy, and construction
sectors. Relations have been close with Prime Minister Meles
serving as the first co-chair of the China-Africa Cooperation Forum
from 2000-2006. Meles and the Ethiopian leadership have often told
the U.S. Ambassador that the U.S. needs to follow China's lead in
providing critical financing for projects quickly without
conditions, limitations, or bureaucratic red tape. The U.S. Mission
has held close discussions with our Chinese counterparts on various
areas of cooperation and plan to expand our contacts and pursue
areas of possible cooperation. End Summary.

QUICK VISIT
-----------

2. (U) Ambassador received readouts from Chinese Ambassador Lin Lin
and Foreign Minister Seyoum and State Minister Tekeda on the January
10 visit by China's newly appointed Foreign Minister, Yang Jiechi.
Yang visited South Africa, Democratic Republic of the Congo,
Burundi, and Ethiopia. It has become a tradition for China's
foreign minister to visit Africa after the New Year, according to
Ambassador Lin Lin, who added that Yang's predecessor visited
Eritrea last January. The visit was more to demonstrate China's
growing interest and understanding of the continent than to pursue
any specific agenda in Ethiopia. Referred to as "tiger," a nickname
opposite his soft spoken and proper approach, Foreign Minister Yang
impressed the Ethiopians with his command of the issues and
understanding of Ethiopia's challenges against counter insurgents
in-country and extremists in Somalia, as well as for his
appreciation of Ethiopian efforts in Sudan, and acknowledgement of
tensions with Eritrea. Yang was praised highly by the Prime
Minister as well as his interlocutors at the Ministry of Foreign
Affairs.

CHINA'S FOCUS ON INFRASTRUCTURE DEVELOPMENT
-------------------------------------------

3. (U) During discussions with Prime Minister Meles and Foreign
Minister Seyoum, Yang reportedly reviewed China's interest in Africa
in general and in Ethiopia in particular. According to Ambassador
Lin Lin, China provides over USD 2 billion to Ethiopia, almost
exclusively in soft loans, in the telecommunications, energy and
construction sectors. China's ZTE has a USD 1.5 billion contract
for upgrading Ethiopia's entire telecom sector, including cell
phone, fiber optic connections, broadband expansion, and internet
service. On energy, China provided a USD 500 million loan for
construction of a hydroelectric power plant, called the "fan"
project. Finally, China is instrumental in constructing roads in
Addis and throughout the country. China is also constructing cement
factories to meet the booming and highly speculative real estate
development projects, including housing and office buildings.

4. (U) According to Tekeda, the Prime Minister and Foreign Minister
were impressed with China's rapid inroads into Africa and viewed
China as a critical engine for rapid infrastructure development,
especially roads, housing, and office buildings. Ethiopia's
leadership stressed to us that China provides financing, albeit soft
loans, quickly and without the human rights and other types of
conditions or limitations imposed by the U.S. In previous
conversations, Ethiopian officials have lauded Chinese firms'
accountability to the Chinese Embassy -- a productive avenue through
which the Ethiopian Government could raise, and have resolved,
disputes with Chinese companies -- as a model which the U.S. Embassy
and private sector should follow should we wish to increase our
success rate in securing Ethiopian Government contracts. Ethiopia's
military leadership has noted to us in painful detail the slowness
of delivery of materials to Ethiopia, at times years, waiting for
delivery, while the Chinese have been quick, though quality of
materials is not always desirable.

CLOSE TIES
----------

5. (U) Ambassador Lin Lin noted that Ethiopia was the first
co-chair, with China, from 2000 to 2006 of the China-Africa Forum.
Egypt is now the co-chair. Ethiopia, Lin Lin noted, helped China

ADDIS ABAB 00000194 002 OF 002


make inroads into Africa and increase interaction and trade between
China and the continent. During the visit, Yang committed USD 4
million in grant-in-aid to cover construction of three new schools
and other projects to be designated later. The Foreign Ministry was
also being provided computer upgrades and new office equipment.
Ethiopia was the first country in Africa to receive Chinese
volunteers to teach in schools, work in factories and agricultural
areas.

SOMALIA, SUDAN, ERITREA
-----------------------

6. (SBU) Ambassador Lin Lin and Minister Tekeda separately noted
that China agreed with Ethiopia on the primacy of the Comprehensive
Peace Agreement (CPA) as the basis for resolution of problems in
Sudan. Foreign Minister Seyoum praised China's constructive
dialogue with Sudanese President Bashir. On Somalia, Lin Lin noted
China's understanding of the threat of extremism to the security of
Ethiopia. China will not return to drill for oil in Ethiopia's
troubled Ogaden region along the Somali border where seven Chinese
oil workers were killed by rebels last spring. (Note: For the
present, Iran has expressed an interest in seeking oil in the Ogaden
region. End note.) On Eritrea, Ambassador Lin Lin noted that the
visit by Yang was to counter balance the visit to Asmara last year
by Yang's predecessor. Lin Lin noted that China was avoiding siding
or commenting, in private or public, on the border dispute between
Eritrea and Ethiopia because of their expressed neutrality on the
border.

U.S. EMBASSY SEEKS CLOSER TIES
------------------------------

7. (U) The U.S. has held meetings by section chiefs with our Chinese
Embassy counterparts. Our Peace Corps Director is discussing with
China's volunteers on possible coordination. China soon plans to
send its third group of volunteers to Ethiopia, bringing to 15 the
number of volunteers that will be in-country for the next year.
China plans to bring agricultural experts to Ethiopia and promises
to coordinate with the U.S. Mission's trade promotion and
agricultural development teams. The U.S. Embassy is arranging to
bring China's agricultural experts to visit our experimental farms
which are training Ethiopian farmers on raising yields, quality, and
productivity.

COMMENT
-------

8. (U) China has expanded its operations in Ethiopia, but can
complement U.S. mission programs. China's stress on building roads
and schools, which the U.S. does not do, strongly complement the
Ethiopian Government's emphasis on building infrastructure to spur
development. Such efforts can be coordinated with the U.S.
Embassy's capacity building programs to train teachers, work on
education initiatives dealing with English training, and other types
of programs. Further, given Ethiopia's important potential role in
facilitating efforts between the northern and southern Sudanese
officials, China can play a positive role supporting dialogue.

YAMAMOTO

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