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Cablegate: Namibia: Chinese Engagement and Potential Areas For

VZCZCXYZ0020
RR RUEHWEB

DE RUEHWD #0132/01 0421601
ZNR UUUUU ZZH
R 111559Z FEB 10
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC 0192
INFO AFRICAN UNION COLLECTIVE

UNCLAS WINDHOEK 000132

SENSITIVE
SIPDIS
FOR AF/RSA LOUIS MAZEL, LAURA GRIESMER AND RYAN BOWLES

E.O. 12958: N/A
TAGS: PREL EAID CH WA
SUBJECT: Namibia: Chinese Engagement and Potential Areas for
Cooperation

REF: A) STATE 10152; B) 09 WINDHOEK 118; C) 09 WINDHOEK 302
D) 09 WINDHOEK 424; E) 09 Windhoek 324; F) 09 Windhoek 302

1. (SBU)Summary. Namibia and China enjoy excellent relations based
on historical ties and current bilateral trade and development
assistance. Those ties have only strengthened since 2007, when
Chinese President Hu Jintao visited Namibia and the two governments
signed an agreement for a concessionary loan and a credit line--
each valued at approximately USD 130 million-- as well as
initiated several cooperative agreements on economic technology,
human resources, education and tourism (ref B). There are
currently no examples of U.S.-China collaboration in Namibia, but
there is potential, and likely willingness on the part of the
Chinese, to develop such a partnership. End summary.

----------------------------

Trade and Commerce

----------------------------

2. (SBU) Trade between China and Namibia continues to grow at a
remarkable pace. In 2007, bilateral trade totaled nearly USD 400
million, while in 2009, the volume of trade between Namibia and
China exceeded USD 550 million, according to China's Ambassador to
Namibia Ren Xiaoping. The balance of trade favors Namibian
exporters, who in 2009 sold more goods-- mostly semi-processed
minerals, such as uranium,-- to China. China, in turn, exported
vehicles, trucks and equipment to Namibia. Rossing, Namibia's
largest uranium mine, produced 4150 metric tons of uranium in
2009, and of that, China is estimated to have obtained
approximately 1000 metric tons. In January 2010, Paladin Energy,
which owns Namibia's second fully operational uranium mine (Langer
Heinrich), announced that it would send a trial shipment of uranium
to China "to test and demonstrate the efficiency of logistics from
Africa to Chinese conversion facilities." China is also expected
to purchase 35 percent of the Areva Trekkopje mine's uranium
output, once the operation achieves full production levels in 2011.
In addition, a number of Chinese-owned companies have mining
exploration licenses. Chinese-owned Zhonghe Resources (Namibia)
Development (Pty) Ltd has a exploration license that covers nuclear
fuel (uranium). Other Chinese mining firms (Namibia East China
Non-Ferrous Mineral Exploration and Development and Namibia-China
Mineral Resources Inv. Dev Pty Ltd) hold exploration licenses for
other minerals, such as copper.

3. (SBU) China has also deepened its cooperation with Namibia in
the aquaculture sector. In January 2010, Vice Minister of
Agriculture Niu Dun led China's first delegation to Namibia to
discuss bilateral cooperation in the fishing industry. China
reportedly offered Namibia student and information exchange
programs as well as approximately USD 2 million for aquaculture
development. Chinese firms continue to dominate the construction
industry, which has engendered some public resentment. In a move
seen to target Asian construction firms, the Tender Board announced
in February that companies using unskilled and semi-skilled foreign
laborers would no longer qualify for government tenders. It is
unclear how this decision will affect construction projects
financed by tied aid.

4. (SBU) Some Chinese business deals have recently come under harsh
criticism and allegations of corruption (ref C). For instance,
Namibia's Public Services Commissioner, her business partner and a
Chinese national are alleged to have defrauded the Namibian
government of USD 4.2 million in a deal involving the GRN's
purchase of x-ray scanning equipment from NucTech, a Chinese
government-owned company (refs E and F).

--------------------------------

Development Assistance


---------------------------------

5. (SBU) China is showing growing interest in providing development
assistance to Namibia. In December 2009, Namibia signed a grant
agreement with China for USD 11 million. A portion of those funds
has already been used to build rural schools, known as China
Namibia Friendship Schools, in the towns of Tsumkwe and Omuthiya.
The Chinese government has financed the building and refurbishment
of several hospitals, and Chinese medical teams work in a number of
Namibian health facilities. The Chinese are reportedly becoming
more involved in rural development projects with women and youth.

6. (SBU) China has also provided Namibia with scholarships and
other training opportunities. Since 2006, China has offered over
300 training opportunities to Namibians in fields such as public
administration, economics, agriculture, aquaculture, mining, and
health, according to Ambassador Xiaoping. In October 2009, major
newspapers reported that the Chinese government had given several
scholarships for study at Chinese universities to the children of
prominent politicians, including the daughter of President Pohamba
(ref D).

7. (SBU) In addition, Ambassador Xiaoping has announced that it is
her goal to implement in Namibia all eight of the African
development initiatives launched by President Hu in 2006 at the
China Africa Summit held in Beijing. She also credits the Forum of
China-Africa Cooperation with bringing "tangible benefits" to
Namibia, such as the construction of: the regional council
buildings in Kavango and Omusati, the president's official
residence (which is part of the North Korean-built State House
complex), a fishery laboratory in Kavango, a youth training center
in Grootfontein, and a yet-to-be-constructed defense academy in
Okahandja (ref B).

---------------------------

Military Cooperation

---------------------------

8. (SBU) China has a permanently assigned military attach???? to its
diplomatic presence in Namibia. The Chinese and Namibians often
conduct exchanges of senior military officers and cooperate on
professional military education initiatives (ref B ).

-------------------------------

U.S.- China Collaboration

--------------------------------

9. (SBU) There are no examples of U.S.-China collaboration in the
development sector. However, there is certainly potential for
collaboration and a willingness on the part of senior officials at
the Chinese Embassy to work with the USG. At a recent dinner
hosted by Ambassador Xiaoping as well on several other occasions,
Chinese diplomats have expressed interest in partnering on
development projects. One possible area for collaboration is
disaster preparedness, a sector in which the Chinese are becoming
active internationally. USAID's Office of Foreign Disaster
Assistance could assist perhaps in developing with the Chinese a
training and capacity building program that supports ongoing
multilateral efforts to empower the Red Cross in Namibia and in the
region.

10. (SBU) There may also be possibilities to collaborate in the
health sector, whereby China undertakes to upgrade health
facilities, while the USG provides technical assistance to develop
health professionals. Similarly, if the USG eventually expands its
work in the broader health programs in Namibia, we could work with


the Chinese on integrating services to rural clinics and health
facilities. It should be noted that the Chinese have also inquired
about the activities of the Peace Corps Volunteers in Namibia,
ostensibly to gain a better understanding of how the organization
works with a view to improving their own volunteer corps structure.
A partnership may be possible in this realm as well.
MATHIEU

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