INPUT FOR HIRC CHINESE TESTIMONY

C O N F I D E N T I A L SECTION 01 OF 02 MASERU 000245

SIPDIS

DEPT FOR AF/RSA - JOHN NAY AND KATHLEEN MOODY AND
PDAS - M. RANNEBERGER

E.O. 12958: DECL: 5/12/2015
TAGS: PREL LT CH
SUBJECT: INPUT FOR HIRC CHINESE TESTIMONY

REF: MAY 11 E-MAIL FROM AF/RSA

CLASSIFIED BY: JUNE CARTER PERRY, AMBASSADOR, EXEC, STATE.
REASON: 1.4 (b),(d)



CLASSIFIED BY: JUNE CARTER PERRY, AMBASSADOR, EXEC, STATE.
REASON: 1.4 (b),(d)



--------------
SUMMARY
--------------


1. (C) China continues to demonstrate significant interest in
Lesotho as noted in Para. 2. In addition to those activities,
post has observed that senior members of government have
participated in travel to China over the past 12 months. These
officials included the Prime Minister, the Deputy Prime
Minister, the Foreign Affairs Minister, the Finance Minister and
the Commander of the Lesotho Defense Force. The Chinese
Ambassador has been quite open in discussing with us China's
plans, particularly their involvement in revamping the
communications sector. This particular activity, which is
expected to take a number of years, will give China a
significant footprint in Lesotho. The Chinese are also
bolstering their efforts in the area of education by offering
training to Basotho in China, a result (from the PRC's view) of
tighter USG visa requirements. They expect to continue
educational efforts with the people of Lesotho, particularly in
terms of the National Defense College near Beijing. We expect
that China will continue to press the GOL towards a closer
bilateral relationship and will do this by continuing to offer
sweeteners and tangible incentives. There are approximately
5,000 Chinese in country with the majority of those being
resident throughout the nation. Their presence is visible
outside the capital in many small businesses, and in Maseru
itself, they are primarily present in the textile industry.
U.S. Interests: We should continue to show visible results of
our major initiatives in order to keep the GOL and the public
keenly aware of our long-term interest in Lesotho's future. END
SUMMARY

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

2. (SBU) Lesotho Input for Preparations for HIRC Hearing on
China in Africa
-------------- --------------
-------------- --------------

Trade: Trade varies significantly, as the only significant
commerce involves fabric provided by Chinese factories to some
garment manufacturers here. Level of factory activity and type
of orders thus influence the amount and value of China-Lesotho
trade.

Exports: Lesotho does not export any goods to China.

Director Investment: Little or none by private sector or state
companies, as the garment factories are mainly owned by
Taiwan-based companies, plus elsewhere in Asia excluding China.

Humanitarian and Development Assistance: Humanitarian
assistance is sporadic and not large-scale. Some Chinese
doctors work at hospitals in Lesotho. China occasionally makes
humanitarian food assistance donations, but is not a significant
donor overall.

Development assistance is significant. China has announced
plans to help Lesotho revamp and upgrade its radio and
television technology infrastructure. The Chinese government
paid for the construction of a convention center in Maseru and
is funding construction of new facilities for the National
Library and Archives. The GOL has approached the Chinese
Embassy (and other diplomatic missions) about support for a new
Parliament building.

China's Presence: Chinese number over 5,000 in Lesotho,
according to the Chinese Embassy. Present not only in the
garment industry, but now operating small business, some in
remote areas of the country.

Mil-Mil Relationship: On the increase. China donated light
trucks and other equipment to LDF within the last ;year. LDF
Commander visited China in March 2005. Mid-level military
personnel have been to China for training.

Perceptions: Strongly mixed views. GOL appreciates the amount
of intention and assistance China provides (see projects,
military aid described above); general population can be
suspicious of Chinese, seen as clannish, culturally insensitive
and taking business opportunities away from Basotho.

MASERU 00000245 002 OF 002



Corruption: No real effect on corruption in Lesotho.

Business Community: "Chinese" business community is a mix of
Taiwanese and PRC nationals. The former are more prominent,
e.g., as owners/top managers of garment factories. The two
groups seem to operate without conflict.

China/Taiwan: Although the GOL supports a one-China policy, it
enjoys a good relationship with Taiwanese-dominated garment
industry. PRC Embassy seems to take a hands-off approach to the
garment industry as well. Note: A significant number of PRC
nationals work in the factories, despite the plants being
Taiwanese-owned. The PRC Embassy considers itself to have
responsibility for both Taiwanese and PRC nationals.

Impact on U.S. Interests: Competition to some extent for
influence with the GOL, as China appears to have "deep pockets"
and is willing to finance projects that other donors would not:
e.g., convention center, library and archives. Also, a majority
of high-level GOL officials (including the Prime Minister,
Deputy PM, Minister of Foreign Affairs, LDF Commander, and
others) have visited China, at the PRC's expense.

Countering Activities: MCC, AGOA, and expanded assistance to
fight HIV/AIDS give U.S. considerable influence with GOL. GOL
reiterates frequently that it considers USG one of its strongest
allies, due to long history of assistance and continuous
diplomatic presence. (Many diplomatic missions closed in
Lesotho after the end of apartheid.) USG's credibility as a
proponent of democratization (boosted by our financial support
for election-related activities) is another strong element of
the bilateral relationship.