Identifier
Created
Classification
Origin
06BEIJING17108
2006-08-21 06:41:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

(C) PROSPECTS FOR COORDINATION WITH CHINA ON

Tags:  EAID ECON PREL CH AF 
pdf how-to read a cable
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PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #7108/01 2330641
ZNY CCCCC ZZH
P 210641Z AUG 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 4294
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RUEHLO/AMEMBASSY LONDON PRIORITY 2922
RUEHKO/AMEMBASSY TOKYO PRIORITY 0792
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 1459
RUEHGV/USMISSION GENEVA PRIORITY 1273
C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 017108 

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/21/2016
TAGS: EAID ECON PREL CH AF
SUBJECT: (C) PROSPECTS FOR COORDINATION WITH CHINA ON
FOREIGN AID LIMITED

REF: A. (A) BEIJING 16824

B. (B) BEIJING 2948

C. (C) BEIJING 1238

D. (D) 05 BEIJING 16339

E. (E) 05 BEIJING 16254

Classified By: (C) CLASSIFIED BY ACTING MINISTER-COUNSELOR FOR ECONOMIC
AFFAIRS CHRISTOPHER BEEDE; REASON 1.4 (B) AND (D)

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 017108

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/21/2016
TAGS: EAID ECON PREL CH AF
SUBJECT: (C) PROSPECTS FOR COORDINATION WITH CHINA ON
FOREIGN AID LIMITED

REF: A. (A) BEIJING 16824

B. (B) BEIJING 2948

C. (C) BEIJING 1238

D. (D) 05 BEIJING 16339

E. (E) 05 BEIJING 16254

Classified By: (C) CLASSIFIED BY ACTING MINISTER-COUNSELOR FOR ECONOMIC
AFFAIRS CHRISTOPHER BEEDE; REASON 1.4 (B) AND (D)


1. (C) Summary: Chinese government officials indicated to a
visiting USAID official that while they welcome the
opportunity to discuss development assistance as part of an
overarching U.S.-China dialogue, the prospects for
coordination with China on foreign aid appear to be limited
in the near term, a view that was reinforced in meetings with
other bilateral donors. The Ministry of Commerce (MOFCOM)
Department of Foreign Aid, the primary agency responsible for
implementing China's nascent aid program, declined to meet
the USAID official. The Ministry of Foreign Affairs (MF)
Asian Department was willing to discuss posible U.S.-China
bilateral cooperation on humanitarian assistance in
Afghanistan. However, a more senior official in the MFA
International Organizations Department, though not
specifically referring to assistance in Afghanistan,
expressed China's general preference to coordinate Chinese
foreign aid with multilateral bodies, including the United
Nations. End Summary.


2. (C) Norman Nicholson, Director for Donor Coordination at
USAID, attended the Global Issues Forum in Beijing on August
9-10 and presented U.S. views on aid programs and
international development cooperation (Ref A). On August 8
and 11, Nicholson met with Chinese officials at the MFA Asian
Department, a professor at People's University who also
serves as a consultant on foreign aid issues to MOFCOM, and
representatives of the British and Japanese aid agencies. He
spoke informally on the sidelines of the forum with the
Deputy Director Generals of both the MFA Department of
International Organizations and Conferences and MOFCOM
Department of International Economic and Trade Relations.

U.S.-China Dialogue on Foreign Aid a Positive Step...
-------------- --------------



3. (C) Chinese officials at the Global Issues Forum voiced
their appreciation for hearing U.S. views on international
development cooperation (Ref A) and noted that dialogue on
foreign aid coordination would yield positive gains in the
long run. In order to improve its aid effectiveness, China
wants to learn from the experiences of other donors,
including the United States, said Wang Xiaolong, Deputy
Director General of the MFA's Department of International
Organizations and Conferences. Wang and other officials
reiterated the often expressed Chinese position that China's
foreign aid program remains relatively small due to its own
economic constraints, but that China's overseas economic
assistance will grow commensurate with continued domestic
economic development. MFA contacts stated that opening a
dialogue with the United States on development assistance at
this stage of China's aid program is a positive step.

...But MOFCOM Not Interested in Donor Coordination Efforts
-------------- --------------


4. (C) MOFCOM officials, however, were reluctant to discuss
possible cooperation with the United States on development
assistance. MOFCOM's representatives at the Global Issues
Forum were not from the Department of Foreign Aid, which is
charged with delivering overseas economic assistance.
Instead the Deputy Director General of MOFCOM's Department of
International Trade and Economic Affairs (DITEA) represented
the Ministry at the GIF. The Department of Foreign Aid
refused to meet separately with Nicholson, and officials from
the Department DITEA said that they would not be able to
facilitate a meeting with the Department of Foreign Aid even
though both departments are part of the same ministry.


5. (C) Representatives from other bilateral donors, including
the UK Department for International Development (DFID) and
Japan International Cooperation Agency (JICA),all agreed
that it is difficult if not impossible to work with the
MOFCOM Department of Foreign Aid. A JICA official, for
example, said that Japanese efforts to coordinate development
assistance with China have been unsuccessful to date, largely
due to the reluctance of the MOFCOM Department of Foreign Aid
to engage. "JICA is a little bit at a loss of what to do,"

BEIJING 00017108 002 OF 002


stated Akimitsu Okubo, JICA Deputy Country Representative.
"We want to cooperate with China on aid to other countries,
but the MOFCOM Department of Foreign Aid is not transparent."
DFID, which has been more successful in encouraging mutual
cooperation on China-Africa economic relations, has some
collaboration with MOFCOM on projects in Ghana and Tanzania,
but Chris Athayde, DFID's Deputy Country Director, agreed
that working with MOFCOM has been difficult.


6. (C) Interlocutors largely agreed that even if the MOFCOM
Department of Foreign Aid becomes more transparent, it would
remain unclear which agency in the Chinese Government would
have the lead on foreign aid issues. MOFCOM remains the
primary approval and implementing agency. Other ministries,
however, such as the Ministry of Health, also may implement
sector-specific projects, and the Ministry of Finance (MOF)
and MFA also have input in the project formulation process,
said Zha Daojiong, a senior advisor on Chinese development
assistance and professor at People's University (Refs C and
D). Chinese embassies in developing countries also
contribute to the process, said Zha, as Ambassadors overseas
route requests for development projects in their assigned
countries back to Beijing through the MFA.

MFA: Opportunity for Cooperation in Afghanistan
-------------- ---


7. (C) At the MFA, Zhang Yiming, Asian Department Director
for Pakistan, Afghanistan, and Bangladesh, said that China
would be interested in cooperating with the United States on
development assistance in Afghanistan, particularly in the
area of humanitarian assistance in drought stricken areas.
China has obligated USD 68 million of grants to Afghanistan
out of its USD 150 million total pledge made in January 2002.
Most of the remaining amount consists of soft loans that
China has not yet distributed due to concerns about
Afghanistan's weak banking sector and increasing the debt
burden in Afghanistan, Zhang said. In addition, China
pledged an additional USD 80 million at the London Conference
on Afghanistan in January 2006. China also is seeking other
means to be helpful to Afghanistan, Zhang stated, including
according zero tariff treatment on 278 items and promoting
educational exchanges. Zhang lamented that problems with
internal coordination between MFA, MOFCOM, and MOF dilute
China's aid effectiveness overseas.

China Focuses on Multilateral Dialogues on Foreign Aid
-------------- --------------


8. (C) MFA and MOFCOM officials emphasized that to the extent
that Beijing coordinates its aid efforts with other
countries, the PRC would prefer to work with multilateral
agencies. At the Global Issues Forum, Wang Xiaolong stated
that he expects Chinese coordination on foreign aid issues to
be limited to discussions with UN agencies in the near term.


9. (C) Liang Hong, Division Director in MOFCOM's Department
of International Trade and Economic Affairs, who also
attended the GIF, agreed that China's current approach to
donor coordination is a multilateral one. China already has
a history of working with UNDP and UNICEF on incoming aid,
which makes them more likely partners, Liang said. As an
example, the UNDP Representative Office hosted a seminar on
China-Africa Economic Relations in Beijing on August 15.


10. (C) USAID Director for Donor Coordination Norman
Nicholson cleared this cable.

SEDNEY
SEDNEY