Cablegate: Sudan: China Poised for Key Role in Post 2011 Agriculture

VZCZCXRO1071
OO RUEHROV RUEHTRO
DE RUEHKH #0236 0420903
ZNR UUUUU ZZH
O R 110902Z FEB 10
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0165
INFO IGAD COLLECTIVE
UN SECURITY COUNCIL COLLECTIVE
RHMFISS/CJTF HOA

UNCLAS KHARTOUM 000236

SENSITIVE
SIPDIS
NSC FOR MGAVIN
LETIM
DEPT PLS PASS USAID FOR AFR/SUDAN
ADDIS ABABA ALSO FOR USAU

E.O. 12958: N/A
TAGS: PGOV PREL EAGR ECON EFIN EPET SU
SUBJECT: SUDAN: CHINA POISED FOR KEY ROLE IN POST 2011 AGRICULTURE

1. (U) Summary: The People's Republic of China (PRC) is encouraging
Chinese private enterprises to invest heavily in Sudan's agriculture
sector, Lee "Ali" Wei Zheng, Commercial Officer for the Chinese
Embassy, told PolEconOff February 3. Chinese investors currently
have ten farms in China, and plan to expand those investments. China
continues to fund bridges, irrigation projects and road projects,
including 1,250 kilometers of roads in Darfur and North Kordofan.
China provided "nontraditional" election aid to the GOS in the form
of vehicles and communications equipment and will "closely watch" the
elections. End Summary

--------------------------------------------- -
China Diversifies Into Agriculture, Irrigation
--------------------------------------------- -

2. (U) PolEconOff met February 3 with Lee "Ali" Wei Zheng, Commercial
Officer for the Chinese Embassy. According to Lee, China has a
number of projects to develop infrastructure in Sudan. China has
provided funding for projects to build six roads totaling 1,250
kilometers in Western Darfur, and in Northern Kordofan. The PRC and
the Sudanese Government (GOS) are planning additional projects,
including constructing bridges, in several other regions as a way to
improve transportation, Lee said.

3. U) However, Lee said, China views investment in agriculture as a
key part of its Sudan strategy. The PRC is encouraging private
enterprises to invest heavily in Sudan's agricultural sector. China
currently has ten farms in Sudan, Lee said, and is expanding its
agricultural investments in both the north and the south. Lee
pointed out that China also helped Sudan build a sugar factory in
Sennar State, one of Sudan's most important agricultural areas.
(Note: Saudi Arabian investors are also reported to have invested
some 200 million (USD) in agricultural projects in Sennar. End Note.)
The PRC is also reportedly considering projects in Northern and Nile
States. (Note: Northern State is an important producer of wheat,
beans, sorghum and dates, while Nile State houses the largest
electricity-generating project in the country, the Merowe Dam,
constructed by the PRC. End Note.)

-------------------------------
... In Response to GOS Incentives
-------------------------------

4. (U) Equally important, Lee told PolEconoff, China is helping Sudan
strategically use its water supply for agriculture by providing
irrigation equipment to help grow vegetables and rice crops.
Agriculture is renewable, said Lee, unlike oil, which is a finite
resource and will eventually run out. Consequently, Lee said, the
PRC has responded to GOS encouragement, which includes "land
incentives" to engage in agricultural development. When asked, he
declined to comment on the specifics of the incentives.

-----------------------------------------
China Wants Elections to Be Free and Fair
-----------------------------------------

4. (U) China wants to see a free, fair and peaceful vote in Sudan,
Lee emphasized. He confirmed that the PRC provided the GOS with
communications equipment and vehicles to support the elections.
(Note: Because the GOS pledged to provide vehicles and communications
as its own contribution to the election effort, traditional donors
such as the United States, UK and Norway have declined to assist
Sudan with these elements. China, a non-traditional donor, is not
constrained by the election assistance agreements. End Note.) China
supports a free and transparent election and will "closely watch" the
election, Lee said. He responded ambiguously to an inquiry as to
whether the PRC would participate in the international observation
effort.

5. (SBU) Comment: Reportedly, China's interest in maintaining access
to Sudan's oil has caused an uptick in engagement with the South as a
hedge against the prospect of the South's secession following the
2011 referendum. Nonetheless, the North, where pipelines, refineries
and other oil infrastructure are located (and which China largely
funded and built) continues to be vitally important to China. This
new foray into agricultural investment appears intended to signal
China's constancy as a partner to Sudan regardless of the outcome of
the 2011 referendum
WHITEHEAD

© Scoop Media