KAGAME VISIT TO CHINA

UNCLAS KIGALI 000529

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV PREL RW
SUBJECT: KAGAME VISIT TO CHINA

REF: 06 KIGALI 0894


1. (U) Summary. President Paul Kagame paid a five day
visit to China May 14-19, visiting Beijing, Shanghai and
Shenzhen. The two governments signed several accords,
including debt cancellation, infrastructure development,
expanded trade links, and cultural exchanges. Kagame also
addressed the annual African Development Bank meeting, held
for the first time in China. Trade between the two nations,
while small, is growing, and Rwanda, as many other African
nations, is attracted by the Chinese development package of
soft loans, technical aid, and minimal conditionality. End
summary.


2. (SBU) Local press outlets carried extensive coverage of
President Kagame's state visit to China, his talks with
President Hu Jintao and other senior leaders in Beijing, and
Kagame's address of the African Development Bank annual
sessions in Shanghai. Kagame also visited the city of
Shenzhen, across from Hong Kong, where the Rwanda Investment
and Export Promotion Agency maintains an office. Contacted
by pol/econ chief upon the GOR delegations' return to Kigali,
presidential advisor David Himbara, who accompanied Kagame,
said that the trip had accomplished key GOR goals of
increased aid for infrastructure development, increased
scholarships for Rwandan students, and the expansion of trade
relations between the two nations. The visit to Shenzhen, a
booming center for foreign investment, had special resonance
for the Rwandan delegation, said Himbara, as it had formerly
been a small village located in a mountainous area of China.
President Kagame hoped that Kigali, small, underdeveloped,
and located in equally mountainous countryside, could one day
boast of a similarly booming economy.


3. (SBU) Echoing these comments, Chinese Embassy First
Secretary Xinming Wang told pol/econ chief June 1 that five

SIPDIS
agreements had been signed during Kagame's trip, including an
accord canceling Rwandan debt owed to China "up through
2005." The debt cancellation totaled USD 160 million, he
said. Other accords focused on infrastructure development,
particularly road building, and also trade development,
sports, and cultural and educational exchanges. Wang noted
that this was Kagame's first state visit since his election
in 2003, Kagame having paid unofficial visits several times
earlier, including in 2006. As a rule China hosted official
state visits for no more than three African heads of state
each year, he said ("although sometimes we go over"),so the
Rwandans had been pleased to be selected. Wang said that the
Chinese government had tried to interest the Rwandans in a
city other than Shenzhen, which Kagame had seen before, but
"the Rwandans insisted on seeing it again." Wang added that
while visits by Chinese businessmen to Rwanda had so far not
yielded much new investment, there were "more and more
businessmen coming to have a look." Wang also briefly noted
the May 22 visit to Kigali by three Chinese generals, a visit
he characterized as one focused on training opportunities for
the Rwandan military.


4. (SBU) Comment. China presents an attractive partner for
Rwanda, with grants, soft loans and technical aid, chiefly
for essential infrastructure development, and no great
emphasis on conditionality. Trade between the two nations
was USD 34 million, a modest sum but growing steadily.
Unfortunately for Rwanda, there is no Hong Kong adjacent to
Kigali, offering investment, expertise and ready access to
world markets, as well as cultural and language affinities.
Poor and underdeveloped in a poor, underdeveloped and
unstable neighborhood, the GOR is focusing intensive policy
efforts on an economic long-shot -- Rwanda as an entrepot
between anglophone East Africa and francophone Central
Africa. The will is there, as is the goodwill of
international partners, but it will be a long and difficult
task. End comment.
ARIETTI