JAMAICA COMMITTED TO STRONGER TIES WITH CHINA

C O N F I D E N T I A L SECTION 01 OF 04 KINGSTON 000386

SIPDIS

WHA/CAR (BENT),EAP/CM, WHA/PDA (MJOHNSON)

E.O. 12958: DECL: 01/13/2015
TAGS: PREL BTIO EAID KPAO CH JM
SUBJECT: JAMAICA COMMITTED TO STRONGER TIES WITH CHINA

Classified By: Charge Thomas C. Tighe for Reasons 1.4 (b) and (d).

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Summary
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1. (C) Eager to attract Chinese investment in Jamaica's
economy and tourists to its beaches, Prime Minister P.J.
Patterson and Foreign Minister K.D. Knight rolled out the red
carpet for Chinese Vice President Zeng Qinghong and his
150-member Chinese trade delegation, which visited Kingston
February 2-5. Jamaica has seized the opportunity to
encourage Chinese investment, and the clearest indication yet
of the GOJ's ambition to expand its relationship with China
is its co-sponsoring of the China-Caribbean Trade Fair and
Forum, led by Zeng, the highest-ranking PRC official ever to
visit Jamaica. The Jamaica Defense Force Chief of Staff is
planning to visit the PRC in 2005, possibly seeking an
alternative for military assistance should the GOJ not enter
into an Article 98 agreement. End Summary.

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GOJ Welcomes the Chinese (Investment)
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2. (C) The GOJ and GOC co-hosted a China-Caribbean Economic
and Trade Cooperation Forum and Trade Fair February 2 through

5. The Forum, which had a ministerial and business
conference component, was held at the Jamaica Conference
Centre and the Trade Fair was held at the National Arena in
Kingston. The Chinese delegation was led by the
highest-ranking PRC official ever to visit Jamaica, Vice
President Zeng Qinghong. Robert Stephens, Senior Vice
President of the Port Authority of Jamaica (PAJ) and Chairman
of the event's planning committee told Poloff beforehand that
this forum presented a golden opportunity for private sector
interests in Jamaica and the Caribbean to forge ties with
China.

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Prelude to the Visit: the Jamaica-China Relationship
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3. (C) With Grenada's recent switch from recognizing Taipei
to establishing full diplomatic relations with Beijing (Ref
A) continuing a regional trend, Jamaica is proud of its long
relationship with the People's Republic of China (PRC). The
PRC and Jamaica formally established diplomatic relations on
November 21, 1972 and in 1973 China opened its Embassy in
Jamaica. But unofficial ties long predated either Jamaican
independence or the establishment of the PRC after the Second
World War. Chinese immigrants first settled in Jamaica in
1854 as indentured laborers; second and third generation
Chinese now account for approximately two percent of
Jamaica's population. In May of 1992, the Jamaican
government accredited its ambassador to Japan as its
non-resident ambassador to China. China is currently
building a large new embassy in Kingston which may soon
become the second largest mission on the island, after the
U.S. Embassy. Jamaica has announced that it would be opening
an Embassy in Beijing in the fall.


4. (U) In a recent press release, Chinese Ambassador to
Jamaica Zhao Zhenyu stated that Jamaica has been certified as
an approved destination for Chinese tourists. (The PRC
allows its citizens to undertake group travel only to
countries having this status.) In November 2004, FM Knight
stated discussions with the Cuban government at the "highest
level" will continue in the pursuit of a joint Cuban/Jamaican
tourism package. Prime Minister PJ Patterson added that this
development would open the Caribbean region to a potential
new market and valuable source of tourism revenue.


5. (C) The GOJ sees China as an important source of what it
badly needs at this time, employment opportunities for its
13.1 percent unemployed population, and also seeks to
leverage the island's location in the Caribbean to enhance
its relationship with Beijing. Robert Stephens, Senior Vice
President at the Port Authority of Jamaica (PAJ),recently
told Poloff that due to Jamaica's geographical location,
Jamaica will continue to concentrate on expanding its
commercial free zone facilities to be able to provide
logistics services for companies from China to bring their
goods in bulk to Jamaica and use it as the distribution hub
throughout the Americas. The China-Caribbean Trade Fair and
Forum, Stephens noted, is the "foundation on which all of
this is built."

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China-Caribbean Trade Fair and Forum - Much Ado About Nothing?
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6. (C) Ambassador Peter Black, Ministry of Foreign Affairs
and Foreign Trade (MFAFT) Undersecretary for Bilateral and
Regional Affairs, told Poloff that Jamaica was chosen to host
this forum because it is China's largest trading partner in
CARICOM. Over the past two years, he said, China provided
technical and financial assistance to Jamaica, all towards
the goal of expanding trade and increasing political and
economic ties. As China continues to seek expansion of its
production base by outsourcing some of its production
activities, said Black, the Forum and Trade Fair is an
excellent opportunity for Jamaica to attract Chinese
investment.


7. (C) A ministerial-level forum which convenes every four to
five years, alternating between China and a Caribbean
country, took place on February 2. The forum's aim was to
promote and deepen economic exchanges between China and
Caribbean countries. The forum included workshops where
senior government officials along with business interest
groups, agencies and individuals, addressed topics such as:
how to do business with China; the Caribbean investment
environment; investment and trade; tourism; aviation;
agricultural and fishing cooperation; finance and human
resources; and business networking. In preparation for the
Forum and Trade Fair, the GOJ in collaboration with the PRC
held numerous "sensitization seminars" which focused on
cultural awareness, business principles and practices in
China and the Caribbean, as well as customs and immigration
issues.


8. (C) Although press briefing materials and the PAJ's
Stephens claimed over 50 exhibitors from China would
participate along with over 500 buyers and business partners
from the Caribbean region, there were only 17 exhibitors from
China and approximately ten from the Caribbean, including
Jamaica. (Note: According to Nicholas Baylis, Assistant
Vice President of Security at the PAJ, during a post-Fair
meeting, the President of the PAJ criticized Stephens for
being "duped by the Chinese" regarding the number of Chinese
exhibitors that were promised. However, the PAJ stated in a
February 10 press release that the Fair was a success
reiterating their claim that over 80 Chinese exhibitors were
present. End Note.) Poloff attended both the opening
ceremony and the last day of the fair. Readily apparent was
the absence of many Jamaican business people. The Chinese
exhibitors surveyed on the last day of the fair told Poloff
that many visitors to the booths were more interested in
purchasing the goods on display than on entering into
business partnerships.


9. (C) Liu Jian Ling, Marketing Agent for the China National
Construction and Agricultural Machinery Import and Export
Corporation, said that she was "very anxious to enter into a
partnership with the Jamaicans, but not much Jamaican
interest right now." Although Jamaica has been certified an
approved Chinese tourist destination, a representative from
the China Commercial International Travel Service said that
she had not received any real interest in partnering from
Jamaican tourism agencies. Tellingly, an editorial cartoon
that appeared in a leading Jamaican daily during the
conference depicted a forlorn-looking Prime Minister
Patterson, seated at an empty conference table, facing Vice
President Zeng, whose table is laden with Chinese-made shoes,
computers and other goods ready for sale to Jamaicans.

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Forging Stronger Ties
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10. (U) During the opening ceremony of the Trade Forum on
February 2, Vice President Zeng called for continued and
substantive progress in China's relationship with the
Caribbean. He proposed the exploration of new forms of
cooperation; the need for governments to seek to expand the
ways they are providing quality services; and the need to
encourage cultural exchanges. He also proposed that the
Caribbean region should engage in greater consultation and
cooperation with China "in order to safeguard common
interests."


11. (U) During the trade delegation's visit to Kingston:

-- Antigua, Bahamas, Barbados and St. Lucia signed the
Approved Destination Status (ADS) memorandum that facilitates
Chinese nationals wanting to travel to the Caribbean;

-- Jamaica's Ministry of Transport and Works and the China
National Machinery Equipment Corp Group (CNMEC) signed a
Memorandum of Understanding for the rehabilitation and
reconstruction of the island's railway system. CNMEC will
provide passenger coaches, cargo, wagons and locomotives for
the system. GOJ officials claim the PRC initially expressed
an interest in this project. Other MOUs were signed between
Jamaica and China ranging from tourism cooperation to Chinese
language training; and

-- PAJ and COSCO, China's national shipping line, signed a
Memorandum of Understanding for China to conduct a
feasibility study for further development of the
transshipment terminal.

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China's Impact on Jamaica's Economy
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12. (C) Jamaica has become China's biggest Caribbean trading
partner, exporting alumina and bauxite while importing
textiles, clothing and industrial products. A GOJ analysis of
Jamaica's alumina shipments by destination revealed that
China accounted for about 21 percent of volume shipments
originating from Jamaica in the first eleven months of 2004,
making China Jamaica's second largest market after Canada.
The PAJ is developing larger free zone areas to accommodate
the expected increase in required capacity it expects that
Chinese investment will bring in the next five to ten years.
Trade between Jamaica and China was US$210 million in 2003,
up thirty percent from 2002. Meanwhile, the Jamaican House
of Representatives approved a US$21 million loan agreement
between the PAJ and the Export/Import Bank of China. The
loan will facilitate the purchase of four new gantry cranes
that will be installed at the north and south terminals of
the Kingston container terminal. The cranes will be provided
by the Shanghai Zhenhua Port Machinery Company. The purchase
of these cranes will assist in expansion of the ports.
Stephens said that the Chinese are looking for an area to use
as a distribution hub for the Americas, and "what better
place than Jamaica?" Twenty of Jamaica's 22 ports have been
certified International Ship and Port Facility Security
(ISPS) compliant. The GOJ has taken ISPS compliance very
seriously and recognizes that this status will attract more
trade through its ports.

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From Table Tennis to Sports Complexes
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13. (C) The PRC has not been shy in showing its commitment to
the GOJ in ways other than trade. In 2004, Ambassador Zhao
provided badminton equipment worth JM$1.5 million to the
Jamaica Badminton Association to assist in development of the
sport in Jamaica. During this announcement, Ambassador Zhao
formally introduced two Chinese coaches secured by the
Jamaica Table Tennis Association (JTAA) to teach table tennis
on a two-year contract. Under the agreement, the PRC will be
responsible for their salaries and accommodation. On January
4, Minister of Foreign Affairs and Foreign Trade K.D. Knight,
in a joint press event with Ambassador Zhao, signed a
contract for the PRC to fully fund and construct a J$222
million (approximately U.S.$3 million) multi-sports complex
in the Sligoville, St. Catherine area by spring of 2006. The
complex will house the first dedicated cricket and soccer
fields on the island. Interestingly, the planned sports
complex is to be built in a rural and semi-remote locale, but
which is in the parliamentary constituency of FM Knight.


14. (C) China has also funded a language laboratory at the
University of the West Indies and has agreed to send a
teacher from the PRC. The lab is scheduled to be
commissioned sometime in February, after the Trade Forum.

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China and Jamaica's Military
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15. (C) In addition to increasing trade ties with Jamaica, on
November 29, 2004, China and Jamaica signed a Memorandum of
Understanding wherein the PRC will provide US$362,000 in the
form of uniforms, teaching aids and tents to the Jamaica
Defense Force (JDF). This is the second grant for the JDF
from the Chinese government. The first MOU was signed
December 5, 2002, and provided US$234,000 for uniforms,
computers, radios and other non-operational, non-combat
equipment. The JDF has sent one officer to Chinese Command
and General Staff College in China. JDF Chief of Staff, Rear
Admiral Hardley Lewin's visit to China in April, 2005 will be
totally funded by the PRC. DATT and MLO report that Lewin's
visit may be to investigate options should Jamaica lose
military assistance from the U.S. if the GOJ decides not to
enter into an Article 98 agreement. China does not have a
military attach assigned to Jamaica; however, as China steps
up aid to the JDF, one may be assigned in the future.

Comment
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16. (C) GOJ interest in pursuing closer ties with China is
genuine given the size of the Chinese market, and also
because the PRC offers a potential alternative for providing
military assistance for the resource-starved Jamaica Defense
Force, in the event GOJ nonresponsiveness (thus far) to
concluding an Article 98 agreement should lead to a reduction
in certain military assistance from the USG. From the GOJ's
perspective, the meat of the trade delegation's visit can be
found in the agreements concluded under its auspices. Still,
the GOJ's failure to match its lofty rhetoric about fostering
"trade partnerships" with at least a respectable number of
visitors to the fair itself, spoke volumes about Jamaica's
current readiness to make the most of trade ties with China.
The GOJ is seeking to expand its export market and ensure
that it has a leading and secure port facility in the
hemisphere as well as increased capacity in its commercial
free zone facilities, factors which will tie in with
Jamaica's growing economic relationship with the PRC.
TIGHE