CHINA'S LIMITED INFLUENCE IN CHAD

UNCLAS NDJAMENA 001492 SIPDIS SENSITIVE DEPARTMENT FOR AF, AF/C, EAP, INR, DRL; LONDON AND PARIS FOR AFRICAWATCHERS E.O. 12958: N/A TAGS: EAGR ECON CD EFIN EMIN ENRG ETRD ETTC PREL SENV AF CH ENIV SUBJECT: CHINA'S LIMITED INFLUENCE IN CHAD REF: A. STATE 153199 ¶B. NDJAMENA 1210 ¶1. (SBU) Summary: Since 1997, N'Djamena's official recognition of Taiwan has limited Chinese influence in Chad. Chinese firms, however, are interested in becoming involved in Chad's oil sector. Chad is not taking the People's Republic of China up on recent overtures. End Summary. ¶2. (SBU) Chad recognized Taiwan and cut off diplomatic relations with China in 1997. Prior to the break up, China funded a number of programs in Chad, including the construction of the current National Assembly building and the National Sports Stadium. In the late 1990s, the Government of Chad obtained a bilateral development assistance package of USD 72 million from Taiwan over a six-year period. Chad's acceptance of this financing and recognition of Taiwan prompted the severing of diplomatic and economic ties. ¶3. (SBU) Taiwanese funding has been used for construction of bridges, roads, and rural and urban water distribution systems; payment of teachers' salaries, and disaster-relief type grants. The Taiwanese have an agricultural and medical attache within their diplomatic mission in N'Djamena. Overseas Engineering and Construction Company, a Taiwanese firm, finalized a multi-million dollar contract with the GOC to develop a number of roads within the capital. Taiwanese firms also plan to develop hotels and restaurants in the future. ¶4. (SBU) Taiwanese and Chinese firms have become increasingly interested in investment opportunities in Chad's oil sector. Chinese investors with a company called Great Wall Drilling are partial owners of an oil exploration consortium in partnership with Encana, a major Canadian oil company. Taipei's Chinese Petroleum Corporation signed a "preliminary cooperation agreement" for exploration purposes in October 2004. Taiwanese officials have privately expressed their frustration with the ability of Taiwanese companies to seek further exploratory contracts, complaining that the EssoChad consortium has already laid claim to most of the market. ¶5. (SBU) Tan Sun (Mark) Chen, Taiwan's Foreign Minister visited Chad in July to see an agricultural development project and cement the relationship with gifts of vehicles and generators, promises of future exchanges, the paving of more roads, and possibly a new National Assembly building. (Ref B). ¶6. (SBU) Taiwanese officials have expressed their growing concern that China wants to become more active in Chad. Taiwanese diplomats warn that China' objective is to extract resources for its own economic gain, not provide development programs. In particular, China wants to be more involved in the extraction of oil resources and to find other ways to profit from investment opportunities in Chad. Chinese companies have recently won contracts to construct roads outside N'Djamena. Chad's former Foreign Minister Yagoum Yamassoum told Ambassador Wall about recent Chinese overtures in New York and Libreville and claimed that Chad had dismissed them. ¶7. (SBU) Comment: Chad will remain in Taiwan's corner for the foreseeable future. We will continue to watch for Chinese investment. We are still awaiting more detailed information on Taiwanese assistance to Chad and will forward it when it is received. WALL NNNN