BURMA AND CHINA MAKE ECONOMIC DEALS AT NANNING EXPO

C O N F I D E N T I A L RANGOON 001248

SIPDIS

STATE FOR EAP/MLS; PACOM FOR FPA

E.O. 12958: DECL: 10/18/2015
TAGS: ECON ETRD PREL PGOV EFIN BM CM
SUBJECT: BURMA AND CHINA MAKE ECONOMIC DEALS AT NANNING EXPO

REF: A. RANGOON 1073


B. 2004 RANGOON 1014

Classified By: Econoff TLManlowe for Reasons 1.4 (b,d)


1. (C) Summary: At the second China-ASEAN Business and
Investment Summit and Expo in Nanning on October 18-20, 2005,
the governments of Burma and China signed a framework
agreement for a concessional 1 billion yuan ($124 million)
loan to finance a fertilizer plant near Rangoon. The Myanmar
Chamber of Commerce and Industry reportedly signed over $140
million in sales contracts with Chinese traders at the same
event. The summit highlighted China's increasing trade with
Burma, and the loan agreement further strengthened China's
financial support of Burma's economy. End summary.


2. (SBU) Prime Minister General Soe Win led the Burmese
delegation to the second annual China-ASEAN Business and
Investment Summit and Expo on October 18-20 in Nanning, in
Guangxi Zhuang Autonomous Region. At the Expo, Burma's
Economic Minister U Soe Tha and Chinese Commerce Minister Bo
Xilai signed a framework agreement for a one billion yuan
($124 million) concessional loan. The Export-Import Bank of
China will provide the 15-year funds at 2% interest for a
fertilizer factory located near Rangoon.

At The Summit: PM Highlights Bilateral Trade
--------------

3. (U) Prime Minister General Soe Win was one of the highest
ranking officials at the event, which also included the Lao
Vice President and the Thai Deputy Prime Minister. In his
opening speech, the PM noted that China is now Burma's second
largest trading partner after Thailand, accounting for almost
14% of Burma's exports (Note: The GOB Central Statistics
Organization says it is really about 10%. End note). Over
25% of Burma's imports come from China. Soe Win expressed
confidence that Burma and China will reach their goal of $1.5
billion in bilateral trade this year. Observing that Burma's
hydroelectric, oil and gas sectors are the most attractive
for Chinese investment, the PM expressed hopes that
manufacturing will also interest Chinese investors. The PM
noted successful bilateral efforts to normalize border trade
between the two nations (Ref A).

At the Expo: Burma Gets Export Orders
--------------

3. (U) The Burmese delegation included over 100 business
reps, who reportedly signed over $140 million in sales
contracts with Chinese traders. According to the Myanmar
Chamber of Commerce and Industry (MCCI),agreements were made
primarily for the export of Burmese gems and jewelry, seafood
and agricultural products. The MCCI also signed a MOU on
cooperation with the China General Chamber of Industry and
Commerce. The team of 28 Burmese companies won the "Best
Exhibition Award" at the Expo.


4. (C) Comment: That Prime Minister General Soe Win led the
delegation underscores the importance of Burma-China economic
relations, to Burma, at least. Former PM Khin Nyunt also
focused heavily on economic deal making during his frequent
trips to China (Ref B). The PM's statements reflected the
GOB's continuing efforts to raise revenue from increased
trade and investment from China and from border trade
"normalization." The PM's attendance at the expo also gave
him an opportunity to see how far Burma lags behind its
neighbors: in his public statements, he noted (certainly with
some envy) Guangxi's significant economic development over
the past year. End comment.
VILLAROSA