Identifier
Created
Classification
Origin
07SUVA372
2007-07-26 16:17:00
CONFIDENTIAL
Embassy Suva
Cable title:  

FIJI "LOOKING NORTH" TO CHINA - DOES THE REALITY

Tags:  PREL ECON ETRD MARR FJ CH 
pdf how-to read a cable
VZCZCXRO3735
RR RUEHPB
DE RUEHSV #0372/01 2071617
ZNY CCCCC ZZH
R 261617Z JUL 07
FM AMEMBASSY SUVA
TO RUEHC/SECSTATE WASHDC 0198
INFO RUEHBJ/AMEMBASSY BEIJING 0282
RUEHBY/AMEMBASSY CANBERRA 1740
RUEHPB/AMEMBASSY PORT MORESBY 1312
RUEHWL/AMEMBASSY WELLINGTON 1510
RUEHIN/AIT TAIPEI 0001
RHHJJAA/JICPAC HONOLULU HI
RHHMUNA/HQ USPACOM HONOLULU HI
C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000372 

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/25/2017
TAGS: PREL ECON ETRD MARR FJ CH
SUBJECT: FIJI "LOOKING NORTH" TO CHINA - DOES THE REALITY
MATCH THE RHETORIC?

REF: A. 06 SUVA 156

B. SUVA 354

C. SUVA 353

Classified By: DCM Ted Mann, per 1.4 (B) and (D)

Summary
-------
C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000372

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/25/2017
TAGS: PREL ECON ETRD MARR FJ CH
SUBJECT: FIJI "LOOKING NORTH" TO CHINA - DOES THE REALITY
MATCH THE RHETORIC?

REF: A. 06 SUVA 156

B. SUVA 354

C. SUVA 353

Classified By: DCM Ted Mann, per 1.4 (B) and (D)

Summary
--------------

1. (C) The appointment of Sir James Ah Koy to be Fiji's
next Ambassador to China has fueled renewed discussion about
attempts by the Fiji interim government (IG) to gain
assistance from China in place of aid from Australia, New
Zealand and other donors. Ah Koy says Fiji hopes to borrow
up to USD $155 million from the PRC at concessionary rates.
It also hopes to bring in hundreds of thousands of Chinese
tourists. Ah Koy has targeted Chinese investors and farmers
to help develop infrastructure and Fiji's agricultural
sector, respectively. Finally, Fiji has nominated military
spokesman Major Neumi Leweni to serve in Fiji's Embassy in
Beijing, apparently in an effort to build stronger military
to military relations. The PRC Embassy in Beijing is
downplaying prospects for vastly increased aid or for any
significant influx of Chinese tourists. The PRC hopes to
increase assistance to Fiji over the next several years, but
PRC Embassy staff insist China has no interest in trying to
fill in the aid gap caused by the IG's poor relations with
other donors. PRC Embassy staff say Beijing has not approved
the establishment of a defense attache position at Fiji's
Embassy in Beijing. End summary.

Ah Koy Says Chinese Aid, Tourism Can
Replace Links with Australia, NZ
--------------

2. (SBU) Ever since Fiji's interim government (IG)
nominated Sir James Ah Koy to be Fiji's next Ambassador to
China earlier this month, Ah Koy has been on a public
relations offensive. He has stressed the importance of
Fiji-China relations, implying that Fiji needs to turn away
from long-time development and trading partners Australia and
New Zealand in favor of the PRC. Ah Koy is a former Finance
Minister, one of Fiji's leading businessmen, and the U.S.
Embassy landlord. He is half ethnic Chinese and has numerous
business interests in China.



3. (U) In numerous interviews and IG press releases this
month, Ah Koy has noted Fiji's intention to apply for FJ$240
million (about US$155 million) from the RMB 3 billion (about
USD 400 million) soft loan facility for Pacific Island States
that Chinese Premier Wen Jiabao announced during his visit to
Nadi last year (ref A). Given the size of Fiji's economy
compared to the other countries in the Pacific, the amount
Fiji is asking for (about 40% of the total facility) is
reasonable, said Ah Koy. Ah Koy said the funds, at a
concessionary 2% rate for 20 years with a five year grace
period, would be used for road construction, water projects,
shipyards, and housing. He downplayed problems related to
PRC conditions attached to the loan, including a Fiji
government guarantee requirement, saying "we'd be fools" not
to take up the opportunity offered by the PRC loan program.


4. (U) A second major theme of Ah Koy's public statements
has been the need to increase Chinese tourism to Fiji. Ah
Koy told reporters July 9 that an extra marketing allocation
given by the IG to the Fiji Visitors Bureau should be spent
in China, and not in Australia and New Zealand as planned.
Ah Koy said if 2% of the 31 million PRC nationals who travel
abroad each year were to come to Fiji, that would result in
an influx of 620,000 tourists - more than the visitors bureau
total global target this year. In a July 17 interview in the
Fiji Times, Ah Koy was even more explicit about his hope that
Fiji will focus on China instead of other traditional tourism
markets. "Tourism is a quick-fix solution to our economic
woes and needs to be supported. We are being shunned by New
Zealand and Australia so we need to cut the umbilical chord
with them and look elsewhere. We have been treated as a
pariah by these two countries so it would be wise to look
elsewhere. We did not ask to be treated like a leper." Ah
Koy called on the Fiji Immigration Department to relax entry
requirements for Chinese nationals, allowing visa free entry
for short-term visits, as is currently given to citizens of
Australia, NZ, the United States and several other countries.

Trade, Agricultural Ties
--------------

5. (U) Ah Koy is promoting increased trade ties between Fiji

SUVA 00000372 002 OF 003


and the PRC. China, he told reporters July 17, is a "one
stop shop" for Fiji's import needs, and should be chosen over
Fiji's traditional Australian and New Zealand suppliers. "It
does not make sense at the moment because of the fractured
relationship we have with New Zealand and Australia, to spend
our meager dollars in that (sic) market..." Ah Koy is
leading a trade and investment delegation to China in August
in his current role as Chairman of the Fiji Trade and
Investment Board. Ah Koy has also endorsed the "Go Farm
Fiji" initiative approved by the interim cabinet July 3 (ref
B). That initiative involves having Chinese farmers develop
unused farmland under a "build, operate, transfer" (BOT)
arrangement, after which the land would be returned to Fijian
landholders. Funds for this agricultural development would
be drawn from the PRC soft loan facility.

Bainimarama Jumps on the Bandwagon
--------------

6. (U) In a speech July 20, Interim PM Bainimarama noted the
strength of China-Fiji ties. He struck several of the same
themes as Ah Koy, including Fiji's desire to tap into the PRC
soft loan facility for the Pacific, and to attract tourists
from China. Bainimarama said the IG had decided to relax
certain visa requirements for PRC citizens in order to make
it easier for Chinese tourists to visit Fiji. He did not
give specific details on the new procedures.

Some See Danger in Growing PRC Influence:
Military Pursuing Tiananmen Tactics?
--------------

7. (C) Not all local observers are as positive as Ah Koy
about the perceived improvement in Fiji-China relations. One
of the points made by several former Members of Parliament
who met with Codel Payne in early July was the danger of
closer Fiji-China ties (ref C). If Fiji can count on higher
levels of aid from the PRC in the coming years, they said,
the pressure from Australia, New Zealand, the EU and other
donors to hold early elections and resume a democratic form
of government will be much less effective. The MPs urged the
United States to press the PRC not to provide increased aid
to the IG.


8. (SBU) One critic of the IG even raised the image of the
1989 Tiananmen crackdown to describe the impact of closer
PRC-Fiji ties. Unionist Taniela Tabu, engaged in a war of
words with the IG over a labor dispute, said television
footage of military exercises in preparation for a possible
strike reflected Chinese influence. "Those intimidating
tactics (of the military) is similar to the brutal force used
by communist China at Tiananmen Square in 1989 where their
armed forces killed hundreds of democratic protesters," he
said. The PRC Embassy in Suva felt compelled to respond to
this attack, stating in a July 24 press release "it is
totally wrong and absurd to link this (exercises by the Fiji
military) with the incident at Tiananmen Square."

PRC Embassy Downplays IG Rhetoric
--------------

9. (C) PRC Embassy Charge Fei Mingxing and Public Affairs
Officer Hu Lihua told us July 20 that much of the rhetoric
from Ah Koy and others does not match reality. China wants
to fulfill commitments it made to Fiji during Premier Wen's
visit, said Fei. That means implementing a number of stalled
projects and finding new projects that could be supported by
the RMB 3 billion soft loan facility for the Pacific.
Unfortunately, the IG has come forward with very few workable
proposals. In the months immediately after the coup, he
said, there was relatively little contact between the PRC
Embassy and the IG. In recent weeks there have been more
discussions, but talks remain quite preliminary. Nothing has
been nailed down.


10. (C) Fei insisted that China has no intention of trying
to fill the void caused by the withdrawal of donor assistance
from Australia, New Zealand, the EU and others. "Why would
we want to do that?" he asked rhetorically. Fei said the
PRC's "neutral" policy toward Fiji and its commitment not to
be involved in "Fiji's internal affairs" means that while the
PRC won't condemn the IG for its actions, it won't fully
endorse them either. The IG, therefore, should not expect
unlimited funding from the PRC, he said.

Tourism Prospects Are Dim
--------------

11. (C) Fei said he is far less optimistic than Ah Koy about

SUVA 00000372 003 OF 003


the possibility of vastly increased tourism from China,
though he noted that a charter flight filled with Chinese
tourists would arrive in Nadi next month. Prospects for
regular flights between China and Fiji are very dim, he said.
There simply is not enough demand to fill up the seats. Fei
agreed with Ah Koy that Fiji has not been very welcoming
toward Chinese visitors. The PRC embassy has long sought
simplified visa requirements for PRC citizens, but Fiji's
Immigration Department has been very unhelpful, said Fei.
(Note: Bainimarama's announcement that visa requirements
would be relaxed came after our meeting with Fei and Hu.)

Military Attache in Beijing? First We've Heard of It
-------------- --------------

12. (C) Fei said reports that RFMF Spokesman Leweni would
accompany Ah Koy to China as his defense attache had caught
the embassy by surprise. "Fiji can't just decide on its own
to establish a defense attache position in Beijing. They
need to ask our permission." Fei said the embassy had not
yet received a communication from the IG about Leweni's
posting. (Note: Interim Foreign Minister Nailatikau told
reporters July 21 that Leweni would be sent to Beijing to
fill an existing first secretary position, not to be defense
attache, as Ah Koy had earlier indicated.)

Comment
--------------

13. (C) The PRC appears to be taking a cautious stance on
Fiji-China relations and has said little publicly to
encourage the rhetoric emanating from Suva. The interim
government clearly is looking for more help from China to
help it through Fiji's current economic and diplomatic
difficulties. It remains to be seen whether the PRC will
prove to be the generous partner the IG is looking for. End
comment.













DINGER