1. (U) SUMMARY: King Abdullah's swing through Asia was
aimed at diversifying the Kingdom's trade and investment
partners and seeking bilateral assistance. The King
succeeded in obtaining several grants and loans from China
and South Korea; Jordan and Korea also signed a tax treaty.
The King's stop in Hong Kong was to tap into Hong Kong's
expertise in attracting foreign investment and its role as a
trade entrepot. END SUMMARY.



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ABDULLAH VISITS KOREA


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





2. (U) During his July 23-26 visit to South Korea, Jordan's
King Abdullah met with South Korean President Roh Moo-hyan
and with the Chairmen of Hyundai and Samsung Electronics to
discuss investment opportunities. Jordan's Planning Minister
Bassem Awadallah signed a grant agreement with Foreign
Minister Ban Ki-moon where Jordan will receive USD five
million to finance the computerization of Ministry of
Political Development and Parliamentary Affairs operations,
upgrade Ministry of Transport IT systems, refurbish several
health centers, develop local knowledge centers under the
King Abdullah Development Fund (these are rural centers for
teaching computer skills), and support various training
programs for government employees. The two governments also
signed a loan agreement for USD 24 million with a ten-year
grace period and 30-year repayment plan to finance
environmental projects aimed at protecting artesian water
resources in Jordan and to provide sewage services to
southern Amman. In addition, the two sides signed a
bilateral double taxation avoidance treaty.



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CHINA: AID AND INVESTMENT


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





3. (U) In the course of his July 26-31 visit to China, King
Abdullah met with President Hu Jintao and separately with
Prime Minister Wen Jiabo. Minister Awadallah signed a grant
agreement with Minister of Trade Bu Tshali under which Jordan
will receive USD 7.2 million to support several projects
under Jordan's Social Economic Transformation Program for the
years 2004-2006. The two sides also signed a loan agreement
for USD 24 million with a five-year grace period and 20-year
repayment program to finance yet-to-be-agreed projects.
According to press reports, during the visit, Planning
Minister Awadallah pointed out that China already finances
Jordan's Ma'an Industrial Estate (located in the south of the
country), several water projects, and the Ain Al-Basha
Hospital Project. He added that Jordan also welcomed further
Chinese investments in Jordan, particular in Jordan's
Qualifying Industrial Zones (QIZs).



4. (U) During talks with military officials, King Abdullah
also expressed interest in diversifying Jordan's sources of
military equipment and said that China could be a potential
source (Reftel).



5. (U) The King visited Hong Kong and met Chief Executive
Tung Chee-Hwa and with business leaders in order to learn
from that city's experience in attracting foreign investment
and in developing highly efficient transport and maritime
sectors. The King was particularly interested in Hong Kong's
efficient port operations and the lessons it could provide
for Jordan's congested Aqaba port.



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LITTLE GAINED IN THAILAND


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





6. (U) Stopping in Thailand on August 1, King Abdullah met
with King Bhumibol Adulyadej but, according to press reports,
no agreements were signed.



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COMMENT


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7. (C) In addition to watching his national soccer team
compete in the Asian Cup, in his tour through Asia King
Abdullah was in search of aid, trade and increasing Asian
investment in Jordan. Planning Minister Awadallah told
Charge that Jordan is looking to the Chinese to establish
industrial production facilities here, to manufacture
possibly cars and cell phones. He admitted that Egypt, also
seeking such Chinese investments, was a strong competitor
with a more established industrial base. Royal Court
Minister Samir Rifai told Charge the King is especially keen
to develop IT technology deals between Jordan and China.


8. (C) Judging from the grants and soft loans the King
picked up, the trip can be judged a modest success. However,
economic and trade ties between Jordan and Asia remain
minimal. In a current dispute with the USG over a Jordanian
pre-inspection program which affects imports from the U.S.,
shoddy Asian products are routinely cited as the reason the
program is needed to protect the safety of Jordanian
consumers.


8. (C) In addition, the King's long stay in China reflects
concern within Jordan about the expiration of the Multi-Fiber
Arrangement at the end of this year and its impact on the
23,000 Jordanians working in the textile sector. QIZ
managers throughout Jordan fear the end of the MFA will bring
a flood of low-cost Chinese textiles on to the world market,
undercutting Jordan's QIZ textile producers. Explanations of
the production increase safeguards which China accepted as
part of its WTO accession only partially soothe Jordanian
nerves.

HALE