China Interested in Estonian Port

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E.O. 12958: DECL: 2019/11/06
TAGS: EINV ETRD ECON PREL CH EN
SUBJECT: China Interested in Estonian Port

CLASSIFIED BY: Marc Nordberg, Political/Economic Chief; REASON:
1.4(B),(D)

Classified by Charge Karen Decker for Reasons 1.4 B & D.




1. (SBU) Chinese Vice Prime Minister Zhang Dejiang and Vice Foreign
Minister Zhang Zhijun visited Tallinn November 2 - 3. While in
Estonia, they met PM Andrus Ansip, President Toomas Ilves, visited
the Port of Muuga, attended a business forum, and Zhijun met with
FM Urmas Paet. Dejiang and Ansip signed MOUs on investment and
trade development. Dejiang also led a delegation of 70 Chinese
businessmen.




2. (C) Pol/Econ Chief met November 6 with MFA China desk officer
Siiri Konigsberg for a read-out of the visit. Konigsberg, who was
present in all meetings, said the overriding topic was economic
relations. Estonia has no large Chinese investments, just a
handful of Chinese-owned shops. Likewise, trade volumes are low
and Estonia runs a trade deficit with China (in 2008 Estonia
imported USD 431 million and exported USD 79 million to China).
The one bright spot for economic relations, according to
Konigsberg, is potential Chinese investment in Tallinn's Muuga Port
(Tallinn's cargo harbor). In January 2008 Muuga and China's Ningbo
Port signed a letter of intent for Ningbo to invest up to USD 218
million in an expanded container port at Muuga. While the
companies have remained in contact, nothing concrete has come of
that agreement. During this visit Dejiang visited Muuga and
announced the Chinese Communist Party approved of the Muuga
investment, but he offered no specific details. Because of this
lack of action, the Port of Tallinn (owner of Muuga) has been
seeking investors from other Chinese port companies. Chinese
companies currently ship some air cargo through Tallinn Airport,
and Ansip asked about the possibility of increasing such transit.
Dejiang replied that over-flight permission from Russian was a
problem.




3. (C) Konigsberg said the Chinese delegation briefly raised
investment in telecommunications, transport, and tourism, but again
there were no specific details. PM Ansip raised the possibility of
Estonia sharing technology for using oil shale, and Dejiang said
the idea was worth exploring. Estonian energy company Eesti
Energia has visited China and is making contacts for oil shale
cooperation. Dejiang also inquired about Estonia's e-government
program, claiming China wants to explore e-government as a way of
getting closer to its citizens. The delegations discussed
increasing academic exchanges. Currently 104 Chinese students
study in Tallinn, 40 of them at the Music Academy.




4. (C) Politics played a minor role in the visit. Zhijun told FM
Paet that China would like Estonia to be their "bridge" to the
European Union, but Konigsberg said she had the impression Zhijun
just did not understand how to communicate with Brussels. Zhijun
also asked Paet if Estonia is optimistic the COP-15 climate change
conference would prove successful, but did not speak about China's
position. Paet intended to raise North Korea and Iran, but ran out
of time.




5. (C) Konigsberg stated the Chinese delegation was extremely
friendly and spoke about their desire to increase trade and
investment in Estonia. However, she received the distinct
impression Estonia is too small a market for China, and noted that
the Chinese promised nothing concrete or detailed. The GOE is very
interested in increasing economic ties with China, and will host
the next semi-annual Estonia-China Joint Economic Commission in the
first half of 2010 to focus on follow-through from this visit.
Konigsberg also said is was likely either PM Ansip or President
Ilves would lead an Estonian business delegation to the 2010
Shanghai EXPO.
DECKER