CHINESE PREMIER JIABAO VISIT FOCUSED ON TRADE AND

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 001065 SIPDIS SENSITIVE SIPDIS DEPT FOR EB, AF/EPS FOR T HASTINGS AND AF/E FOR B YODER BEIJING, LONDON, PARIS FOR AFRICA WATCHERS E.O. 12958: N/A TAGS: PGOV PREL EAID ETRD ECON CH TZ SUBJECT: CHINESE PREMIER JIABAO VISIT FOCUSED ON TRADE AND REVITALIZING TANZANIA-ZAMBIA RAILWAY REF: 05 DAR ES SALAAM 01904 Summary -------------- ¶1. (SBU) The Chinese Premier Wen Jiabao's overnight visit, June 22 to 23, in Tanzania centered on improving trade and revitalizing construction projects between the two countries rather than military or strategic issues. While President Jakaya Kikwete hurried back from the legislative capital of Dodoma after bidding farewell to Irish President, Dr. Mary McAleese, at the conclusion of her well-publicized State visit, to host Premier Jiabao at a State House dinner, the official discussions were conducted with the Premier's counterpart, Prime Minister Edward Lowassa. Jiabao announced that the Peoples' Republic of China (PRC) has lifted the duties on all products imported into China from Tanzania. Five pre-negotiated technical agreements were signed in the health, transport and communications sectors. The press on Jibao's visit was primarily photographic coverage and short standard texts, as opposed to the visit of the Irish President, that was covered with front-page stories for four days including the publication of the full text of her speech to the Parliament in Dodoma. END SUMMARY. Seven African Nations in as Many Days -------------- 2.(U) Welcomed at the airport by President Kikwete and with a modest banner declaring "Long live the Friendship Between China and Tanzania," Premier Jiabao's short stay in Dar es Salaam was his sixth stop on a one-week seven country tour including also Egypt, Ghana, the Republic of Congo, Angola, South Africa and Uganda. His entourage of officials, businessmen and his own entertainment troop reached 185 persons all arriving in one official plane. The headline news of the Jibao visit was the announcement that China has scrapped import taxes for all Tanzanian goods sent into China. The Premier urged Tanzania to exploit the "great Chinese market" by exporting quality goods; for his part, he would encourage Chinese tourists to visit Tanzania. ¶3. (U) Jiabao had discussions with President Kikwete at the State House, just prior to the State diner in his honor. The Chinese provided an entertainment troupe of dancers and acrobats to enliven the event. On June 23 Prime Minister �00A;Edward Lowassa presided at the official meetings between the two governments and escorted Jiabao around the World Cup class (60,000 seat) national stadium that the Chinese are constructing. The total cost of the 2 1/2 year long stadium construction is approx. USD 48 million (Tsh 56.4 billion) with Tanzania contributing USD 22 million and the PRC the balance of USD 26 million. The stadium should be completed in early 2007 in time for some "friendly matches" in the run-up to the World Cup Finals in South Africa in 2010. Five Technical Agreements Signed -------------- ¶4. (U) On June 23, Tanzania's Minister for Foreign Affairs and International Cooperation, Hon. Asha-Rose Migiro, and the PRC Minister of Trade, Bo Xilai, signed a loan agreement for USD 10 million (Yuan 80 million) to finance various technical assistance projects including an agricultural training center, a center for the prevention and treatment of malaria, provision of anti-malarial medications and construction of primary schools in one or more villages. An agreement was also signed between Trade Minister Xilai and Zanzibar's State Minister of Economy and Finance to carry out restoration work on the Amani Stadium in Stonetown and to provide Zanzibar's CCTV-9 with television equipment and a 50 KW transmitter. The two governments also initialed a special loan agreement worth approximately USD 6.25 million to revitalize the Tanzania-Zambia Railway (TAZARA). ¶5. (U) Just before his departure, Premier Jiabao visited the Chinese Experts Cemetery to lay a wreath at the graves of 49 Chinese experts who lost their lives during the construction of the Tanzania-Zambia Railway (TAZARA) in the late 1960's and/or during other major construction projects in Tanzania. Two-way Trade between Tanzania and PRC holding steady -------------- -------------- DAR ES SAL 00001065 002 OF 002 ¶6. (U) The two-way trade between Tanzania and China reached approximately USD 210 million in 2005 as compared to USD 245 million in 2004. In 2004, China exported to Tanzania USD 173.3 million worth of goods (vehicle parts, tires, footwear, fishing nets, data processing machines and railway goods and wagons, etc.) while Tanzania sold USD 71.16 million worth of primarily metals, ores, sisal and carded or combed cotton to China. In 2002, the two-way trade between the two countries was only USD 128 million, but began a steady rise since that year (reftel). Comment -------------- ¶7. (SBU) Compared to the "same week" visit (June 19 to 22) of the Irish President, Premier Jiabao's visit was relatively low key. It appeared that many of the technical agreements were prearranged and close to what were signed in several of the other six countries he visited. While announcing the elimination of import duties on Tanzanian goods makes good headlines, similar to the problems Tanzania faces in trying to increase its exports to the U.S. under the African Growth and Opportunity Act (AGOA),the country overall has few processed or semi-processed goods ready to be sold to China, Europe or the U.S. The two-way trade between Tanzania and China is primarily raw materials heading East--wood, sisal, minerals, ores and gemstones--and Chinese light manufactured goods flooding East African markets. Ms. Inger Tveit, First Secretary at the Norwegian Embassy, expressed the view of SIPDIS many Western observers: it is clearly in China's interest to revive the TAZARA railway to ensure that inexpensive Chinese goods can reach landlocked countries of East and Southern Africa and that sought-after raw materials to fuel the Chinese economy, can arrive at the port of Dar es Salaam more quickly. WHITE