C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000450

SIPDIS

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 7/18/2017
TAGS: PREL CH XV
SUBJECT: VANUATU OPENS A CONSULATE IN SHANGHAI


CLASSIFIED BY: Veomayoury Baccam, Acting Pol/Econ Section Chief,
U.S. Consulate , Shanghai .
REASON: 1.4 (b), (d)




1. (C) Summary: During the opening of the Vanuatu Consulate in
Shanghai on July 17, Vanuatu officials emphasized their strong
commitment to the One China Policy and encouraged more Chinese
investment, trade and tourism to the pacific island country.
The opening of the consulate comes on the heels of the visit of
the Vanuatu President to China and appears to be just the latest
indication of closer relations between the two countries. End
Summary.


2. (C) Poloff attended the opening of the Vanuatu Consulate
General in Shanghai on July 17. At the event were Vanuatu
Deputy Prime Minister and Foreign Minister Sato Kilman, Vanuatu
Ambassador to China Lo Chi Wai, Vanuatu Consul General Charles
Cheung, Chinese Deputy Foreign Minister Qiao Zhonghuai, and
Shanghai Vice-Mayor Tang Dengjie. Members of Shanghai's
diplomatic community as well as Chinese businessmen with
connections to Vanuatu were also in attendance.


3. (C) In his remarks, Vanuatu Deputy Prime Minister Kilman
said Vanuatu was "extremely satisfied" with its relationship
with China. This relationship has become more active in the
past two years. In August 2005, Vanuatu's Honorary Consulate to
Beijing was upgraded to an Embassy. The Embassy was officially
opened on January 16, 2006. The President of Vanuatu just
concluded his six-day visit to China last week in which he met
with President Hu Jintao.


4. (C) He hoped that this momentum would lead to a stronger
economic relationship. Noting that most of China's investment
was in the real estate and hospitality sector, he encouraged
China to send more trade delegations to Vanuatu to explore ways
of expanding investment. Consul General Cheung noted that
Vanuatu was upgrading its airport and would be able to have
direct flights from China to Vanuatu in 2008.


5. (C) All of the representatives from Vanuatu emphasized the
country's strong commitment to the One China Policy. (Comment:
Vanuatu appears to still be trying to assure China of its
loyalty. In 2004, its Prime Minister reached an agreement with
Taiwan to establish relations and cut off relations with the
Mainland. The treaty was never ratified by the Vanuatu
Parliament and the Prime Minister was eventually dismissed. End
Comment.) In a side conversation, Vanuatu Ministry of Foreign
Affairs Second Political Advisor John Jolame Shing said China
wanted Vanuatu to not only adhere to the One China Policy but
also persuade other pacific island nations to cut off ties with
Taiwan and establish relations with the Mainland. China was
also interested in developing Vanuatu's "marine resources",
primarily seafood. Shing was impressed with how the Chinese
hosts treated the delegation and noted that the hosts took care
of everything, including providing the delegation with 14 cars
for transportation.


6. (C) Shing noted Vanuatu's strong interest in attracting more
Chinese economic investment and assistance. In contrast to
Australia, which targeted assistance to infrastructure and other
public projects, Chinese assistance came mainly in the form of
economic investment. Chinese assistance also did not have any
"strings-attached." China also treated Vanuatu as an equal and
did not put any restrictions on Vanuatu people or businesses
wanting to enter the country. This was not the case with
Australia, which had strict immigration policies. Militarily,
Vanuatu still relied on Australia and Shing did not foresee any
changes in this area.


7. (C) In his short remarks, Chinese Deputy Foreign Minister
Qiao welcomed the establishment of a Consulate in Shanghai. He
promised that the Ministry of Foreign Affairs and Shanghai
government would work to actively promote the relationship and
encourage more investment in Vanuatu.


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8. (C) Comment: The opening of a consulate in Shanghai will
help the Vanuatu government to attract more investment from
China. It will also make it easier for Chinese businesses to
explore investment opportunities in Vanuatu. As a result,
Chinese presence in the region will continue to grow and could
affect regional relationships.
SCHUCHAT