CHINESE PM'S VISIT REAFFIRMS STRONG BILATERAL TIES

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 001707

SIPDIS

E.O. 12958: DECL: 04/11/2015
TAGS: PREL ENRG ETRD CH BG
SUBJECT: CHINESE PM'S VISIT REAFFIRMS STRONG BILATERAL TIES


Classified By: P/E Counselor D.C. McCullough, reasons 1.4 b, d.


1. (C) SUMMARY: The Chinese premier's two-day visit to Dhaka
ended with a joint communiqu, nine accords, and renewed
bilateral warmth after last year's tiff over the now-closed
Taiwan trade office. The commercial payoff appears to be
modest, in part because Bangladesh's economy is increasingly
diversified and private-sector oriented. BDG officials
welcomed the visit as a counter to Indian pressure on water
and other issues. END SUMMARY

ECONOMIC AGREEMENTS
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2. (SBU) On April 7-8, PRC Premier Wen Jiabao visited Dhaka
to commemorate the 30th anniversary of Sino-Bangladeshi
relations. He met with Government, business, and civil
society leaders, including Awami League President Sheikh
Hasina, to reaffirm China's commitment to a broad bilateral
partnership. The nine accords signed during the visit
include five agreements, two MOUs, a telecom contract, and an
exchange of letters on economic and technical cooperation,
agriculture, the Chinese Baropukuria coal mine venture, water
management, and the start of direct commercial flights
between Dhaka and Kunming. Bangladesh runs a huge trade
deficit with China, exporting only $46 million in a nearly $2
billion trade relationship, but when Bangladeshis pressed for
more concessions, Wen replied that "China is also a poor
developing country."


3. (C) On April 11, Chinese Embassy Econ/Commercial Second
Secretary Sucai Yang told poloff that the most significant

SIPDIS
agreements were a dollar equivalent 1.5 million project
support grant and the dollar equivalent 30.2 million
concessional loan for the construction of a di-aluminum
phosphate (DAP) plant in Chittagong. The other accords, he
said, were "just frameworks" for future hopes, particularly
the cooperation agreement on peaceful uses of nuclear energy.
He anticipated slow progress in drawing down China's
long-term concessional credits for installing digital
telephone exchanges in metropolitan cities and other locales
and the new agreement to provide 500,000 landlines because of
differences among the Prime Minister's Office, the Bangladesh
Telecommunications Regulatory Commission, and the Bangladesh
Telegraph and Telecom Board.

POLITICS PREDOMINATE
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4. (C) The visit was more significant for Bangladesh
politically than economically, BDG officials stated. On
April 10, PMO Principal Secretary Kamaluddin Siddiqui
downplayed to visiting SA DAS Gastright the BDG,s interest
in Chinese supplier credits by noting that Bangladesh has
alternative sources of financing from the IFIs and that "we
don't want to be dependent on only their goods--we want the
best goods possible." Foreign Secretary Hemayetuddin
separately told Gastright that the Wen visit reaffirmed a
strong Sino-Bangladeshi relationship and the BDG,s one-China
policy after last year's tiff over the briefly opened Taiwan
trade office. (Note: The BDG decided to allow the trade
office after the reported payment of a substantial bribe to
the Prime Minister's son and heir apparent, Tariq Rahman.)
"Bangladesh opposes Taiwan's membership in any international
and regional organizations open to sovereign countries only
and fully supports China's peaceful reunification," the BDG
publicly stated.


5. (C) Siddiqui welcomed the "very successful" visit as
balance to alleged pressure from India on water and other
issues, and highlighted language in the joint communiqu
asserting that water disputes should not be settled
unilaterally. "We need China when our big neighbor tries to
bully us," he said. Longtime China watcher and senior
diplomatic correspondent Amir Khasru speculated to poloff
that China's interest in Bangladesh partly stems from concern
about India regional power aspirations. A joint agreement to
build a road through Burma serves a dual strategic and
commercial purpose, he said. Khasru claimed there was an
unpublicized agreement to sell seven Chinese military
aircraft (NFI) to Bangladesh (Note: We have no information to
corroborate this claim).


6. (C) Ruling-BNP MP Akmal Yusuf, and member of Parliament's
MFA Standing Committee, told poloff the BDG continues to
pursue its "Look Asia" policy for strategic and commercial
reasons, in part to deflect pressure from India and to make
Bangladesh less vulnerable to Western pressure on human
rights and governance issues. Yusuf put into this context PM
Zia's recent trip to Singapore and the BDG's request for
Chinese support to join the Asean Regional Forum (ARF).

Comment
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7. (C) Wen is the most important head of government to visit
Bangladesh since his predecessor came in 2002. Bangladeshi
satisfaction with the visit was heightened by the fact it was
seen to refute the Indian claim that Dhaka was too insecure
to hold the SAARC summit as scheduled.
THOMAS