Cablegate: Chinese Premier Jiabao Visit Focused On Trade And

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PP RUEHDU RUEHJO RUEHMR
DE RUEHDR #1065/01 1791933
ZNR UUUUU ZZH
P 281933Z JUN 06
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 4237
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0329
RUEHJB/AMEMBASSY BUJUMBURA PRIORITY 2383
RUEHKM/AMEMBASSY KAMPALA PRIORITY 2788
RUEHLGB/AMEMBASSY KIGALI PRIORITY 0832
RUEHLO/AMEMBASSY LONDON PRIORITY 0254
RUEHNR/AMEMBASSY NAIROBI PRIORITY 0142
RUEHFR/AMEMBASSY PARIS PRIORITY 0163

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 001065

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BEIJING, LONDON, PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: PGOV PREL EAID ETRD ECON CH TZ
SUBJECT: CHINESE PREMIER JIABAO VISIT FOCUSED ON TRADE AND
REVITALIZING TANZANIA-ZAMBIA RAILWAY

REF: 05 DAR ES SALAAM 01904

Summary
--------
1. (SBU) The Chinese Premier Wen Jiabao's overnight visit,
June 22 to 23, in Tanzania centered on improving trade and
revitalizing construction projects between the two countries
rather than military or strategic issues. While President
Jakaya Kikwete hurried back from the legislative capital of
Dodoma after bidding farewell to Irish President, Dr. Mary
McAleese, at the conclusion of her well-publicized State
visit, to host Premier Jiabao at a State House dinner, the
official discussions were conducted with the Premier's
counterpart, Prime Minister Edward Lowassa. Jiabao announced
that the Peoples' Republic of China (PRC) has lifted the
duties on all products imported into China from Tanzania.
Five pre-negotiated technical agreements were signed in the
health, transport and communications sectors. The press on
Jibao's visit was primarily photographic coverage and short
standard texts, as opposed to the visit of the Irish
President, that was covered with front-page stories for four
days including the publication of the full text of her speech
to the Parliament in Dodoma. END SUMMARY.

Seven African Nations in as Many Days
-------------------------------------
2.(U) Welcomed at the airport by President Kikwete and with a
modest banner declaring "Long live the Friendship Between
China and Tanzania," Premier Jiabao's short stay in Dar es
Salaam was his sixth stop on a one-week seven country tour
including also Egypt, Ghana, the Republic of Congo, Angola,
South Africa and Uganda. His entourage of officials,
businessmen and his own entertainment troop reached 185
persons all arriving in one official plane. The headline
news of the Jibao visit was the announcement that China has
scrapped import taxes for all Tanzanian goods sent into
China. The Premier urged Tanzania to exploit the "great
Chinese market" by exporting quality goods; for his part, he
would encourage Chinese tourists to visit Tanzania.

3. (U) Jiabao had discussions with President Kikwete at the
State House, just prior to the State diner in his honor. The
Chinese provided an entertainment troupe of dancers and
acrobats to enliven the event. On June 23 Prime Minister
Edward Lowassa presided at the official meetings between the
two governments and escorted Jiabao around the World Cup
class (60,000 seat) national stadium that the Chinese are
constructing. The total cost of the 2 1/2 year long stadium
construction is approx. USD 48 million (Tsh 56.4 billion)
with Tanzania contributing USD 22 million and the PRC the
balance of USD 26 million. The stadium should be completed
in early 2007 in time for some "friendly matches" in the
run-up to the World Cup Finals in South Africa in 2010.

Five Technical Agreements Signed
--------------------------------
4. (U) On June 23, Tanzania's Minister for Foreign Affairs
and International Cooperation, Hon. Asha-Rose Migiro, and the
PRC Minister of Trade, Bo Xilai, signed a loan agreement for
USD 10 million (Yuan 80 million) to finance various technical
assistance projects including an agricultural training
center, a center for the prevention and treatment of malaria,
provision of anti-malarial medications and construction of
primary schools in one or more villages. An agreement was
also signed between Trade Minister Xilai and Zanzibar's State
Minister of Economy and Finance to carry out restoration work
on the Amani Stadium in Stonetown and to provide Zanzibar's
CCTV-9 with television equipment and a 50 KW transmitter.
The two governments also initialed a special loan agreement
worth approximately USD 6.25 million to revitalize the
Tanzania-Zambia Railway (TAZARA).

5. (U) Just before his departure, Premier Jiabao visited the
Chinese Experts Cemetery to lay a wreath at the graves of 49
Chinese experts who lost their lives during the construction
of the Tanzania-Zambia Railway (TAZARA) in the late 1960's
and/or during other major construction projects in Tanzania.

Two-way Trade between Tanzania and PRC holding steady
--------------------------------------------- -----

DAR ES SAL 00001065 002 OF 002

6. (U) The two-way trade between Tanzania and China reached
approximately USD 210 million in 2005 as compared to USD 245
million in 2004. In 2004, China exported to Tanzania USD
173.3 million worth of goods (vehicle parts, tires, footwear,
fishing nets, data processing machines and railway goods and
wagons, etc.) while Tanzania sold USD 71.16 million worth of
primarily metals, ores, sisal and carded or combed cotton to
China. In 2002, the two-way trade between the two countries
was only USD 128 million, but began a steady rise since that
year (reftel).

Comment
-------
7. (SBU) Compared to the "same week" visit (June 19 to 22) of
the Irish President, Premier Jiabao's visit was relatively
low key. It appeared that many of the technical agreements
were prearranged and close to what were signed in several of
the other six countries he visited. While announcing the
elimination of import duties on Tanzanian goods makes good
headlines, similar to the problems Tanzania faces in trying
to increase its exports to the U.S. under the African Growth
and Opportunity Act (AGOA), the country overall has few
processed or semi-processed goods ready to be sold to China,
Europe or the U.S. The two-way trade between Tanzania and
China is primarily raw materials heading East--wood, sisal,
minerals, ores and gemstones--and Chinese light manufactured
goods flooding East African markets. Ms. Inger Tveit, First
Secretary at the Norwegian Embassy, expressed the view of

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many Western observers: it is clearly in China's interest to
revive the TAZARA railway to ensure that inexpensive Chinese
goods can reach landlocked countries of East and Southern
Africa and that sought-after raw materials to fuel the
Chinese economy, can arrive at the port of Dar es Salaam more
quickly.
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