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### Viewing cable 10LUANDA84, REQUEST FOR INFORMATION ON CHINESE ENGAGEMENT IN ANGOLA AND

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10LUANDA84 | 2010-02-26 16:04 | 2010-12-08 21:09 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Luanda

`

    VZCZCXRO4474
    OO RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
    DE RUEHLU #0084/01 0571613
    ZNR UUUUU ZZH
    O R 261612Z FEB 10
    FM AMEMBASSY LUANDA
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 0010
    INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
    RUEHBJ/AMEMBASSY BEIJING 0001

` `

    UNCLAS SECTION 01 OF 02 LUANDA 000084

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

    E.O. 12958: N/A
    TAGS: PREL EAID ECON PGOV AO CH
    SUBJECT: REQUEST FOR INFORMATION ON CHINESE ENGAGEMENT IN ANGOLA AND
    POTENTIAL AREAS FOR COOPERATION

    REF: SECSTATE 10152; 08 LUANDA 536

    ¶1. (SBU) The following responses are keyed to Department
    queries (reftel):

    A: Description of Chinese engagement in Angola: The Chinese are
    heavily engaged in financing and implementing Angola's
    reconstruction following the end of the nation's devastating civil
    war in 2002. In the absence of a much anticipated (by the
    Angolans) conference of Western donors to help fund reconstruction,
    Angola turned to the Chinese. Chinese financing includes a (mostly
    oil-backed) USD 4 billion line of credit through the Chinese Ex-Im
    Bank. Although the terms of this line of credit are not entirely
    clear, it seemingly provides concessionary interest rates and some
    grace period for repayment. According to unconfirmed reports, an
    additional line of credit of up to USD 4 to 6 billion has been
    established through the Chinese Investment Fund (CIF), though Post
    doubts that this fund, which was to have been funded by Chinese
    investors, ever attracted enough Chinese capital to undertake
    intended infrastructure projects in Angola. At the moment, the CIF
    is partnering with state oil company Sonangol in extractive
    industry ventures in Africa outside of Angola.

    The Chinese Ex-Im Bank line of credit is linked to the use of
    Chinese companies as prime contractors for Chinese-funded projects.
    Many sub-contractors for these projects are Chinese companies as
    well. Some of these companies have stayed in Angola after project
    completion and are branching out into other areas, such as
    import/export transactions and private housing. The feverish pace
    of Chinese engagement in Angola cooled markedly in 2009 as the
    global financial crisis gutted Angola's oil and diamond revenues,
    precipitating sharp reductions in GRA expenditures. According to
    the Chinese Ambassador in Luanda, China had to recall more than
    25,000 workers in 2009 due to the lack of GRA funds to pay them.
    Few new projects were launched in 2009, though most of those
    previously underway continued, albeit often at a reduced pace.
    However, those linked to preparations for the January 2010 Africa
    Cup of Nations Football (soccer) Championship, which Angola hosted
    by building four new stadiums, continued full-steam.

    Recently concluded and currently underway infrastructure and
    energy sector-related undertakings include:

    ---upgrading the electricity network in Luanda;

    ---rehabilitation of Angola's three railway lines: Luanda-Malanje
    (completion in 2010); Namibe-Menongue (completion in 2011); and
    Benguela-DRC(completion in 2012);

    ---improvements of infrastructure in Luanda, including building a
    new international airport;

    ---numerous roads and highways outside of Luanda;

    ---social housing projects within Luanda;

    ---four football (soccer) stadiums (Luanda, Benguela, Lubango, and
    Cabinda) that were used during the Africa Cup of Nations tournament
    in January 2010;

    ---joint oil exploration venture with Angolan parastatal Sonangol
    in Block 18; and

    ---a diamond mining venture with state diamond company Endiama.

    ¶B. Examples of U.S.-China cooperation in Angola. Chinese
    contractors have successfully implemented DOD-funded humanitarian
    assistance projects, and a Chinese national is engaged by an
    implementing partner in our malaria program.

    ¶C. Potential areas for U.S.-China cooperation. As reported Ref B,
    the Ambassador raised with the Chinese Ambassador in July 2008 the
    concept of a joint agricultural development project, and the
    Chinese Ambassador agreed to explore the possibilities. However,
    determined efforts by USAID technical staff failed to identify a
    project consistent with our development objectives to which the
    Chinese could contribute meaningfully. Given shifts in FY-2010
    USAID funding, Post will undertake again to explore possibilities
    for cooperation with the Chinese in regard to either our expanding
    agriculture program or in our malaria and/or HIV/AIDS programs.
    Post experience has shown, however, that language can be a
    considerable barrier; for example, the current Chinese Ambassador
    speaks no Portuguese or English and only limited Spanish.

    LUANDA 00000084 002 OF 002

    ¶2. (SBU) COMMENT: The Chinese presence looms large in Angola.
    Although exact numbers are elusive, a minimum of 50,000 Chinese are
    in the country; most other estimates are markedly higher. Few
    question that the Chinese have contributed importantly to Angola's
    ongoing national reconstruction. Nonetheless, some Angolans
    express concerns that Chinese engagement, financed by loans that
    Angola needs to repay, has failed to create jobs for Angolans, has
    failed to transfer technology to Angolans, and has often resulted
    in poor quality performance. Concerns have also been raised about
    the opaque nature of the Chinese funding, which is channeled
    through the Office of National Reconstruction of the Presidency.
    END COMMENT.
    MOZENA

`