NEW CHINESE AMBASSADOR WANTS IMPROVED INVESTMENT

C O N F I D E N T I A L DHAKA 000402 SENSITIVE SIPDIS E.O. 12958: DECL: 04/22/2019 TAGS: PREL PINR BG CH SUBJECT: NEW CHINESE AMBASSADOR WANTS IMPROVED INVESTMENT CLIMATE IN BANGLADESH -------------- SUMMARY -------------- ¶1. (C) The new Chinese ambassador to Bangladesh told Ambassador Moriarty on 4/21 Bangladesh should improve its climate for foreign investors. Although Bangladesh was seeking nuclear energy assistance from China and Russia, the Chinese ambassador said, less expensive power sources were more appropriate for one of the world's poorest countries. He hoped the Awami League government would bring much-needed stability to Bangladesh. -------------- SEEKING A MORE STABLE INVESTMENT CLIMATE -------------- ¶2. (C) Chinese Ambassador Zhang Xianyi, who arrived in March 2009 after ambassadorial postings in Lesotho and Zimbabwe, said Chinese investment in Bangladesh in 2008 was about $30 million, primarily in textiles and, to a lesser extent, porcelain. He expressed a desire to promote Chinese investment in Bangladesh, but added that the environment for foreign investment could be much improved. For example, he noted that the Bangladesh Export Processing Zones Authority had ordered 14 foreign investors, including two Taiwanese companies that had subsequently complained to him, to suspend construction of factories because the Food Ministry claimed it had rights to the land. He also said government instability after the February 25-26 border guard mutiny and unfocused policy-making had dampened investor enthusiasm. -------------- NOT ENTHUSIASTIC ABOUT NUCLEAR ENERGY AID -------------- ¶3. (C) Although the Chinese have expressed a willingness to help Bangladesh develop peaceful nuclear energy (most recently when former Chief Adviser Fakhruddin Ahmed visited Beijing in September),Zhang indicated he thought other energy sources were more appropriate for Bangladesh. He noted nuclear power plants were relatively expensive and technology-intensive, adding that traditional energy sources such as coal and some alternative sources such as solar and sea waves would be a better fit for an impoverished developing country such as Bangladesh. He added that Russia, tolo, did not appear serious about helping Bangladesh develop nuclear power plants. -------------- COMMENT: COMMON THEMES -------------- ¶4. (C) China and the United States have at least some areas of common interest in Bangladesh, the most obvious being to improve treatment for foreign investors and to promote government stability. Ambassador Zhang said he looked forward to maintaining contact with Ambassador Moriarty to exchange notes and to support Government of Bangladesh policies that not only serve U.S. and PRC interests but in so doing boost Bangladesh's development prospects. Although he spoke English, he obviously enjoyed the opportunity to speak Chinese with U.S. diplomats. MORIARTY