Chinese President Hu Makes 24-hour Visit to

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TAGS: PREL PGOV CH MZ
SUBJECT: Chinese President Hu Makes 24-hour Visit to
Mozambique

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1. (U) Summary: Chinese President Hu Jintao stopped by for
an overnight in Maputo February 8/9 before departing for the
Seychelles, the final leg of his two-week Africa tour. In
remarks to government officials, both Hu and Mozambican
President Guebuza praised the two countries' "profound
friendship" and longstanding warm relations. Hu's stay
produced a bundle of agreements totaling some $230 million
in Chinese assistance - mainly in the form of technical
assistance and concessionary loans spread over several
years. Just what the Chinese gained in return is not clear,
apart from more influence and opportunities for a growing
number of Chinese businessmen looking for deals in offshore
fishing, agriculture, timber, infrastructure and
Mozambique's hydro-electric sector. End summary.


2. (U) Hu and his entourage met with their Mozambican
government counterparts and members of the ruling party in
the Chinese-built National Assembly building. However, the
GRM would not reveal Hu's schedule in advance, and he held
no press conference. Despite extensive press coverage in
the days before his arrival, the visit was far more a
private than a public affair.


3. (U) According to press reports, the Chinese pledged to
provide Mozambique the following:

-- debt forgiveness on $20 million in past loans;

-- $40 million in new Chinese Eximbank loans;

-- $15 million for a new national outdoor sports stadium;

-- $120 million in "concessionary" loans for businesses in
2007-2009;

-- duty-free import privileges for a wide range of
Mozambican products;

-- technical and vocational training and assistance in
agriculture, and training for 100 Mozambicans in China.

Prime Minister Diogo, in thanking the Chinese for their
assistance, praised China for offering aid "without
conditions."


4. (U) Very little was mentioned about what the Chinese
received in return. Prime Minister Diogo, speaking to a
gathering of Chinese businessman, said, vaguely, that
opportunities would be provided them in agriculture, hydro-
electrical work and on infrastructure projects. Comment:
We, and other diplomats in town, suspect that the Chinese
are developing agro-business schemes for the Zambezi river
valley. The local press every several months carries
stories about prospective Chinese investment along the
Zambezi, sometimes linking Chinese deals to plans for the
building of another dam below Cahora Bassa dam at Mpanda
N'cua (for which the Chinese, in 2006, pledged a $2 billion
Chinese Eximbank loan). End Comment.


5. (U) Local commentators have expressed mixed views about
China's growing presence. In the week prior to the visit,
several independent media profiled an NGO-sponsored report,
actually released back in 2005, titled "Chinese Take Away,"
decrying the Chinese exploitation of Mozambique's valuable
timber in central Zambezia province; weekly paper Savana
dedicated its front page and inside stories to the report.
Several papers dedicated their editorials to China,
deploring Chinese employers' treatment of Mozambican
workers. Other writers, however, expressed gratitude for
Chinese increased assistance and emphasized the benefits of
Chinese friendship for Mozambique that stretches back to the
independence struggle before 1975. (Note: A senior official
at the Ministry of Foreign Affairs told us last week that
the ruling party had a longstanding debt of gratitude to
China because China had supplied Mozambican independence
fighters, operating out of Tanzania, with weapons in the
late 1960's and early 1970's. End note.)


6. (SBU) Comment: Officially, bilateral trade between China
and Mozambique was approximately $200 million in 2006. It
may have been worth much more than this - Chinese fishing
vessels (and others) are thought to be pillaging the marine
fishery off Mozambique's coast and Chinese businesses are
believed to be heavily involved in illegally logging

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Mozambican hardwoods. In his speech, Hu characterized
relations between both countries as based on "pragmatic
cooperation," which suggests to us that Chinese assistance
comes with strings attached.

Dudley