Identifier
Created
Classification
Origin
07NDJAMENA676
2007-08-17 10:47:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

CHINA IN CHAD: AN ECONOMIC AND COMMERCIAL

Tags:  CD CH ECON ETRD PREL ENRG EPET 
pdf how-to read a cable
VZCZCXRO2974
RR RUEHGI
DE RUEHNJ #0676/01 2291047
ZNR UUUUU ZZH
R 171047Z AUG 07
FM AMEMBASSY NDJAMENA
TO RHEBAAA/DOE WASHDC
RUEHC/SECSTATE WASHDC 5642
INFO RUEHAR/AMEMBASSY ACCRA 0521
RUEHGI/AMEMBASSY BANGUI 1418
RUEHBJ/AMEMBASSY BEIJING 0056
RUEHKH/AMEMBASSY KHARTOUM 0483
RUEHLC/AMEMBASSY LIBREVILLE 1026
RUEHLO/AMEMBASSY LONDON 1731
RUEHFR/AMEMBASSY PARIS 2237
RUEHYD/AMEMBASSY YAOUNDE 1597
UNCLAS SECTION 01 OF 03 NDJAMENA 000676 

SIPDIS

SENSITIVE
SIPDIS

LONDON AND PARIS - FOR AFRICA WATCHERS; ACCRA - FOR
GEOFFREY HUNT; DEPT OF STATE/OES - FOR JEFF MIOTKE AND ANN
COVINGTON; EAP - FOR JOY YAMAMOTO; EEB - FOR TED SAEGER;
DEPT OF ENERGY - FOR CAROLYN GAY

E.O. 12958: N/A
TAGS: CD CH ECON ETRD PREL ENRG EPET
SUBJECT: CHINA IN CHAD: AN ECONOMIC AND COMMERCIAL
PERSPECTIVE

REF: A. A. NDJAMENA 468

B. B. NDJAMENA 666

C. C. NDJAMENA 649

UNCLAS SECTION 01 OF 03 NDJAMENA 000676

SIPDIS

SENSITIVE
SIPDIS

LONDON AND PARIS - FOR AFRICA WATCHERS; ACCRA - FOR
GEOFFREY HUNT; DEPT OF STATE/OES - FOR JEFF MIOTKE AND ANN
COVINGTON; EAP - FOR JOY YAMAMOTO; EEB - FOR TED SAEGER;
DEPT OF ENERGY - FOR CAROLYN GAY

E.O. 12958: N/A
TAGS: CD CH ECON ETRD PREL ENRG EPET
SUBJECT: CHINA IN CHAD: AN ECONOMIC AND COMMERCIAL
PERSPECTIVE

REF: A. A. NDJAMENA 468

B. B. NDJAMENA 666

C. C. NDJAMENA 649


1. (SBU) SUMMARY: Mr. Huang Mingyuan, Economic and
Commercial Counselor of the Chinese (PRC) Embassy in Chad,
provided an overview of the current state of China's
activities here. Since reopening its embassy in N'djamena in
2006, China has responded to a variety of needs expressed by
the Chadian government, from health care to energy. In
addition, a Chinese company is negotiating a joint-venture
with Chad to build an oil refinery. He explained China is
providing aid in the form of donations of equipment and
scholarships while it is also entering into joint ventures
with Chadian entities. Regarding private investors, Mr.
Huang said the role of the Chinese Embassy in Chad is to
provide information on the economy and business opportunities
to Chinese companies. It is up to the companies to visit
Chad and decide for themselves whether they will invest here.
Mr. Huang expects Chinese investments in Chad to increase
but he noted the overall insecurity here is always a concern.
END SUMMARY.

--------------
PROVIDING SOCIAL SERVICES
--------------

2. (SBU) In the area of public health, China is providing
human resources, pharmaceuticals, and equipment. Mr. Huang
said China has sent nine doctors to work at one of the two
main hospitals in N'djamena (Hopital de la Liberte). Two
shipments of medicines have been sent, including routine
medicines and medicines for Malaria. Beijing is shipping
hospital equipment, such as x-ray machines, due to arrive via
air in one week. He noted the PRC had funded the
construction of Hopital de la Liberte in 1996 when they
previously had diplomatic relations with Chad. (Note: Taiwan
provided assistance to this hospital once China left. End
note).


3. (SBU) In education, China is providing scholarships to

30 Chadian students to study in China in various disciplines.
In the energy sector alone, China plans to train 1,000
Chadians in the coming years to develop expertise in oil
exploration and production. Mr. Huang commented the
returning graduates will be available to work on any oil
project and not just those financed by Chinese entities.
China will also build three schools in N'djamena and in rural
areas.

--------------
ENERGY
--------------

4. (SBU) As reported in reftel B, Chinese companies are
investing in exploration of new oil fields (CNPC is
undertaking seismic studies) and they are considering a
joint-venture oil refinery project. According to Esso (the
ExxonMobil-led oil consortium) officials in N'djamena, they
have heard talk of the Chinese refinery project and expect
the Chinese may ask the Chadian government for another bloc
or more in return for carrying out the project. In an
interview on official radio August 16, Minister of Petroleum
Emmanuel Nadingar announced the agreement for this refinery,
to be located east of N'djamena (between Douggia and
Djarmaya) would be signed in September. It would produce
20,000 barrels a day. The Minister also noted the
newly-created national oil company, Societe Tchadienne
d'Hydrocarbure, would be involved in the exploration,
production and distribution of petroleum products including
the creation of filling stations. Foreign companies
interested in oil exploration in Chad would be able to enter
into partnerships with the new company.


5. (SBU) Esso officials said they have an ongoing dialogue
with CNPC about shipping CNPC's eventual crude oil via the
Chad-Cameroon pipeline. When asked about the pipeline, Mr.
Huang said the plan was for some of the Chinese crude to be
shipped out of Chad via the pipeline and some would be

NDJAMENA 00000676 002 OF 003


processed in the refinery. Econoff also asked about reports
China may try to connect its oilfields in Chad with pipelines
in Sudan and Mr. Huang replied that would not be feasible.


6. (SBU) Following up on information requested in reftel B
on China's impact on natural resources, an international
group charged with overseeing Chad's use of its oil reserves
recently visited Chad. The group, the International Advisory
Group (IAG),noted the Chadian government's National
Technical Committee for Monitoring and Control (French
acronym: CTNSC) has only staff person in N'djamena who is
able to make only a few site visits. He has conducted a few
inspections of CNPC's operations with the goal of ensuring
oil companies are complying with Chad's "Environmental
Management Principles" which is one of the CTNSC's
preogatives on behalf of the government. The IAG further
noted due to the government's almost total lack of oversight
of oil activities, the government is unable to protect its
own interests and those of its citizens in the oil zone. It
is also unable to ensure companies comply with the
government's own regulations and there is little indication
of a long-term solution to this problem. The IAG pointed
out, however, under Chad's new petroleum code enacted May 2,
2007, that environmental requirements are now more stringent
and will be applicable starting with the exploration phase.
These new environmental requirements have not resulted in
Chad's implementation of oil spill response mechanisms as the
National Oil Spill Response Plan (NOSRP) has still not been
approved four years after production began at the Doba
fields, nor has it finalized implementing decrees for Law
14/PR/98 which defines broad environmental protection
principles.

--------------
INFRASTRUCTURE
--------------

7. (SBU) According to Mr. Huang, China plans to build six
roads covering ten kilometers in N'djamena. Construction
will start after the rainy season ends (around
October/November).

--------------
CEMENT FACTORY
--------------

8. (SBU) A Chinese company has submitted a proposal to the
Chinese Exim bank for a loan at preferential rates to build a
cement factory. The factory would be near Pala, in southern
Chad near the Cameroonian border.

--------------
TELECOMS
--------------

9. (SBU) Mr. Huang said another Chinese company will invest
in the government telecommunications parastatal, providing
the "third generation" of telecoms, including cell phone,
land lines, and internet services. This investment would
also benefit from preferential loans.

--------------
CANCELLATION OF DEBT
--------------

10. (SBU) Another facet of China's assistance to Chad,
according to Mr. Huang, is debt cancellation. China has
canceled all of Chad's bilateral debt on loans outstanding as
of 2005. As all its other new activities (hospitals, roads,
schools, etc.) are donations and the rest are private
ventures, he said Chad now has no outstanding loans owed to
China.

--------------
PREFERENTIAL TARIFFS AND TRADE FAIRS
--------------

11. (SBU) China has a list of 442 Chadian products that
would benefit from preferential tariffs. China is planning
to hold a trade fair this year to which Chad will be invited.
More than 40 Chadians have gone to seminars in China in
various fields including embroidery, water (hydraulics),and

NDJAMENA 00000676 003 OF 003


management of the cotton sector.

--------------
ONLY CARROTS, NO STICKS
--------------

12. (SBU) COMMENT: As reported in reftel B, the Chinese
Embassy is sensitive to criticisms of its activities in
Africa, and Chad in particular, in terms of human rights and
transparency. With China's policy of non-interference in
Chad's internal affairs, it will be interesting to see what
role Chinese oil firms play, if any, in the implementation of
Chad's Extractive Industries Transparency Initiative (EITI -
see reftel C). The Chinese have an ambitious program in
Chad, ranging from humanitarian projects to potentially
profit-making ventures. They seem to be seizing the moment
to realize results of these efforts, perhaps before Chad
replaces them (again) by the Taiwanese. END COMMENT.
TAMLYN