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### Viewing cable 10NAIROBI165, SOMALIA - CHINESE ENGAGEMENT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10NAIROBI165 | 2010-02-12 07:07 | 2010-12-08 21:09 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Nairobi
Appears in these articles: http://www.spiegel.de/

`

    VZCZCXYZ0007
    RR RUEHWEB

    DE RUEHNR #0165/01 0430756
    ZNR UUUUU ZZH
    R 120756Z FEB 10
    FM AMEMBASSY NAIROBI
    TO RUEHC/SECSTATE WASHDC 0824
    INFO RUEHNR/AMEMBASSY NAIROBI

` `

    <<248522>>
    02.12.2010 07:56
    10NAIROBI165
    Embassy Nairobi
    UNCLASSIFIED//FOR OFFICIAL USE ONLY
    10STATE10152
    VZCZCXYZ0007
    RR RUEHWEB

    DE RUEHNR #0165/01 0430756
    ZNR UUUUU ZZH
    R 120756Z FEB 10
    FM AMEMBASSY NAIROBI
    TO RUEHC/SECSTATE WASHDC 0824
    INFO RUEHNR/AMEMBASSY NAIROBI
    TAGS: PGOV PREL EFIN ECON EAID XA SO
    SUBJECT: SOMALIA - CHINESE ENGAGEMENT
    REF: STATE 10152

    Unclas nairobi 000165

    Sensitive, sipdis

    Af/e for pfierst, af/rsa for lmazel, lgriesmer, rbowles
    treasury for rebecca klein
    commerce for robert telchin

    E.o. 12958: n/a
    Tags: pgov, prel, efin, econ, eaid, xa, so
    Subject: somalia - chinese engagement

    Ref: state 10152

    ¶1. (U) The following cable provides responses to action request in
    reftel on Chinese engagement in Somalia.

    Chinese Engagement in Trade and Investment

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

    ¶2. (SBU) The Sino-Somali relationship has remained strong since
    the establishment of diplomatic relations in December 1960. During
    the Siad Barre regime China was very active in Somalia, initiating
    several large infrastructure projects. In past years, the Chinese
    government has made no significant infrastructure improvements and
    it has launched no "showpiece" projects in the country.

    ¶3. (SBU) Chinese interest in Somalia has historically been in the
    trade of basic commodities. Somalia's Transitional Federal
    Government (TFG) maintains no trade statistics, but reporting from
    the Chinese government indicates that in 2002, the total trade
    volume between the two countries was USD 3.39 million. By 2005,
    Somalia-China bilateral trade was estimated at USD 19.64 million.
    Although more recent statistics are unavailable, current and former
    TFG officials estimate that this trade volume has significantly
    increased in the last few years. Somali businessmen (and
    businesswomen) make regular trips to China to purchase basic
    foodstuffs, textiles, clothes, and other goods. These imports most
    often arrive in Somalia by ship and with favorable pricing as a
    result of Somalia's informal tariff structure. Most goods are
    distributed in the sub-region.

    ¶4. (SBU) Somalia's rapidly growing telecommunications sector is
    powered predominantly by Chinese equipment. Chinese companies
    provide "soft loans" to the telecom operators to purchase
    equipment. Our contacts shared some details of a deal that was
    signed in 2008 for approximately USD 25 million. They told us that
    this scale of business deals is common. Chinese companies are some
    of the few that are willing to send technicians into Somalia to set
    up and maintain the equipment. Anecdotal reports indicate that
    there are often Chinese businesspersons within the country and most
    are associated with large telecommunications projects.

    ¶5. (SBU) China is especially interested in potential opportunities
    for petroleum exploration. China is reported to have secured the
    rights to oil blocks in the Puntland region. Media reports
    indicate that in January, the acting TFG Minister of Petroleum met
    with the Chinese Minister of Petroleum in Khartoum to discuss an
    upcoming mission to Somalia. While no formal engagements have been
    reported, we understand that Chinese officials and businessmen are
    laying the groundwork for trade and investment in the oil and gas
    sectors, primarily through informal relationships with local and
    regional authorities.

    Political Engagement

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

    ¶6. (SBU) China was one of the earliest supporters of the TFG when
    it was established in October 2004. In December 2004, China
    donated computers and office equipment to the TFG and in December
    2005, signed several agreements providing over USD 6 million in
    economic assistance to Somalia. At the signing ceremony, the
    Chinese government granted an additional USD 100,000 in cash to the
    Somali government. We understand that China made additional
    periodic cash contributions to President Yusuf. Our contacts told
    us that the support was always in cash payments and that most of it
    was disbursed within the TFG cabinet.

    ¶7. (SBU) Between 2004 and 2007, President Yusuf and the TFG
    maintained a close relationship with China. The Chinese government
    funded the construction of a canal in Jowhar, the city which was

    Yusuf's base. The canal provides irrigation for agricultural
    development in the area and prevents flooding during the rainy
    season. China made a USD 500,000 donation to the World Health
    Organization to support projects in Somalia. In 2008, the Chinese
    government pledged to contribute USD 2 million to rehabilitate
    Villa Somalia, the presidential palace in Mogadishu. We understand
    that USD 1 million was transferred to the TFG for Somali
    contractors to do the renovations but it is unclear if this project
    was ever completed. The Chinese government also pledged to
    renovate the national stadium and theater in Mogadishu.

    ¶8. (SBU) During the Beijing Summit of the Forum on China-Africa
    Cooperation (FOCAC) in November 2006 Chinese President Hu Jintao
    promised President Yusuf that China would support the TFG's peace
    and reconstruction efforts. However, China has had little direct
    involvement with political issues in Somalia. xxxxxxxxxxxx told us that "China is not concerned with
    politics, only economics, and is positioning itself for commercial
    advantages in post-conflict Somalia." China gave the Somali
    Mission to Kenya two vehicles for official and personal use. The
    TFG Ambassador to Kenya regularly drives one of the Land Cruisers
    and his Deputy Chief of Mission drives the other.

    ¶9. (SBU) The Chinese government has continued the tradition of
    support to the TFG with President Sharif's government. In
    September 2009, China provided direct bilateral assistance through
    a USD 500,000 contribution that the TFG dispersed trough the
    PriceWaterhouseCoopers financial management and oversight
    mechanism. TFG and Puntland officials tell us that China's
    priority area of engagement remains its quest for natural
    resources, especially oil.

    ¶10. (SBU) China does not have a permanent mission in Somalia and
    conducts diplomatic relations through a liaison office in Nairobi.
    With a staff of approximately four, the Chinese "Somalia Unit" is
    led xxxxxxxxxxxx. Through the Embassy of Somalia in Beijing, China
    provides scholarships to students for study to China and more
    recently, sponsored study tours for Somali journalists.

    U.S. - China Collaboration

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

    ¶11. (SBU) There is little direct engagement, cooperation, or
    coordination between the American and Chinese Missions on Somalia.
    In 2007, the Chinese Ambassador to Somalia travelled to Mogadishu
    in support of the National Reconciliation Congress. While the
    mission indicated China's willingness to support Somalia's
    political progress, there was no official Chinese presence during
    the subsequent Djibouti Process.

    ¶12. (SBU) Chinese activities in Somalia are not directed through
    the international donor groups that meet regularly to share
    information and coordinate activities across the Somali territory.
    With a demonstrated interest in rehabilitation of key locations,
    infrastructure development may be an area that would benefit from
    increased bilateral cooperation. At present, there are no examples
    of U.S.-China coordination in Somalia. U.S. Mission efforts to
    contact the Chinese "Somalia Unit" in Nairobi have not to date been
    successful.
    Ranneberger

`