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


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