Identifier
Created
Classification
Origin
09WINDHOEK118
2009-04-09 12:15:00
CONFIDENTIAL
Embassy Windhoek
Cable title:  

UPDATE ON CHINESE ACTIVITIES IN NAMIBIA

Tags:  PREL PGOV MARR WA CH 
pdf how-to read a cable
VZCZCXRO3713
RR RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHWD #0118/01 0991215
ZNY CCCCC ZZH
R 091215Z APR 09 ZDS
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC 0442
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHBJ/AMEMBASSY BEIJING 0086
RUEHGH/AMCONSUL SHANGHAI 0001
RUEKJCS/SECDEF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
C O N F I D E N T I A L SECTION 01 OF 03 WINDHOEK 000118 

C O R R E C T E D C O P Y (Classification Markings 1st Par)

SIPDIS

STATE FOR AF, EAP/C, INR
DOD FOR OSD/AF

E.O. 12958: DECL: 03/16/2019
TAGS: PREL PGOV MARR WA CH
SUBJECT: UPDATE ON CHINESE ACTIVITIES IN NAMIBIA

WINDHOEK 00000118 001.4 OF 003


Classified By: Ambassador Dennise Mathieu for reasons 1.5 (b) and (d)

Summary
--------

C O N F I D E N T I A L SECTION 01 OF 03 WINDHOEK 000118

C O R R E C T E D C O P Y (Classification Markings 1st Par)

SIPDIS

STATE FOR AF, EAP/C, INR
DOD FOR OSD/AF

E.O. 12958: DECL: 03/16/2019
TAGS: PREL PGOV MARR WA CH
SUBJECT: UPDATE ON CHINESE ACTIVITIES IN NAMIBIA

WINDHOEK 00000118 001.4 OF 003


Classified By: Ambassador Dennise Mathieu for reasons 1.5 (b) and (d)

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


1. (C) China provided significant financial support to the
ruling SWAPO party during the liberation struggle, and today
it continues to maintain close political, financial, and
commercial ties to SWAPO. The Chinese government has given
the GRN over 1 billion Namibian dollars since independence
(USD 100 million),and Beijing has funded a number of large
construction projects involving government buildings,
including a new official residence for the President and a
promised military academy. Bilateral trade soared from USD
74 million in 2003 to nearly USD 400 million four years
later. Resentment against Chinese companies, which maintain
a heavy presence in Namibia's construction sector, is
growing, as the general public believes they receive
preferential treatment in awarding of government tenders and
fail to comply with Namibia's labor laws. The size of the
Chinese community in Namibia is estimated at between 3,000
and 4,000. End Summary.


Chinese Relations with Namibia
--------------


2. (C) China enjoys excellent relations with Namibia based on
historical ties and current bilateral trade and development
assistance. The embassy, established since independence, has
23 officers according to the Diplomatic List. Ambassador Ren
Xiaoping, who presented her credentials in November 2007,
speaks English fluently and actively engages with GRN
officials. The Chinese are here to stay, as evidenced by the
new Chinese embassy compound being built in Windhoek. The
structure, which dwarfs those of its diplomatic counterparts,
is slated to be completed next year. All Chinese diplomats
will live on the compound, reportedly for protection from
Windhoek's crime threat. The number of Chinese citizens
living in Namibia is somewhere between 3,000 and 4,000,
according to Xiaoping, and they are mainly involved in the
construction and retail sales businesses.


Trade
--------------


3. (SBU) China's trade with Namibia is steadily increasing.
According to open sources, in 2003, bilateral trade between
China and Namibia totaled USD 74 million, and in 2007, that
figure had risen to almost USD 400 million. China is
importing minerals, such as copper and manganese, marble,
uranium, and some fish and fur products. The Chinese
purchased USD 554,414 worth of fish in 2004, with that figure
rising to USD 943,383 in 2007 and USD 893,683 in just the
first half of 2008. In 2004, the Rossing uranium mine sold
uranium to the Chinese national nuclear industry for the
first time-- 106 tons in 2004 and 109 tons in 2005. Figures
for subsequent year are unavailable, but Rossing expects the
highest industry growth over the next few years to come from
China and Russia. Indeed, in 2008, China acquired a 12
percent stake in the Rio Tinto Group, which owns a 69 percent
interest in Rossing. Chinese exports to Namibia include
clothing, appliances, and low-priced, light manufactured
goods sold in thousands of retail shops across the country.

Construction: Ever Present but Engendering Resentment
-------------- --------------


4. (C) Chinese involvement in the construction sector garners
considerable attention in the Namibian press. It is estimated
that China now controls as much as 70% of the market share,
and complaints that Chinese construction firms skirt labor
regulations are often heard. For instance, Chinese plans to
build a military academy for Namibian officers in the town of
Okahandja have been marred by accusations in the press of
unfair competition and non-compliance with Namibia's labor
laws. According to Namibia's major English language daily,
the Chinese construction companies involved in the project
allegedly have failed to pay minimum wage and make social
security and pension contributions to Namibian workers. Other
Chinese construction firms supposedly hire fewer than 50
permanent workers to avoid inspections by the Ministry of
Labour and Social Welfare. These same firms then employ

WINDHOEK 00000118 002.2 OF 003


several hundred temporary workers, however, to complete
construction projects.


5. (SBU) In Namibia's High Court two local construction firms
are challenging a decision by the government's Tender Board
and the Ministry of Works and Transport to award to China
Nanjing International a 74 million (Namibian dollars)
contract to build a head office for the Ministry of Lands and
Resettlement. The companies claim that the Government of
Namibia (GRN) gives preferences to Chinese construction firms
by overlooking certain requirements, such as adherence to the
Affirmative Action and Labour acts.


6. (C) The Chinese Embassy has been quietly critical of some
Chinese companies operating in Namibia, admitting some were
"irresponsible employers" who sometimes forget or ignore the
fact that they are subject to Namibian law. According to Lin
Jing, outgoing DCM, the Chinese Embassy regularly tries to
educate Chinese employers about Namibian laws to which they
are subject by placing information in a local Chinese
language newspaper. Moreover, Lin stated that the embassy
maintains an ongoing dialogue with the GRN about these firms
and the challenges they face working in a foreign
environment. Lin expressed sympathy with the desire of
Chinese firms to hire Chinese workers, who, he said, have a
stronger work ethic than their Namibian counterparts.

Aid from Beijing
--------------


7. (SBU) Since independence, China has given Namibia two
grants of 30 and 50 million yuan, an interest-free load of 30
million yuan, and one billion yuan as a concessional loan.
This is in addition to a one billion yuan credit line offered
by President Hu Jintao during his state visit to Namibia in
February 2007, which Director of the National Planning
Commission Peter Katjavivi told us has not been used yet.
Xioaping told journalists recently that perhaps the credit
line could be used to upgrade and expand the port in Walvis
Bay. The grant for the 50 million yuan was signed in February
2009, and Xioaping said the two governments have not decided
how the funds will be spent. Part of the 30 million yuan
grant has gone towards the construction of the President's
residence, which will be part of the North Korean-built State
House complex.


8. (SBU) In July 2001, construction was completed on a
satellite tracking and command station in Swakopmund. The
station cost USD 1.2 million and covers an area of 150 meters
by 85 meters. (Note: The site was chosen as it was on the
orbital track of a manned spacecraft during its reentry
phase. End note)


9. (SBU) On a stretch of communal land between Windhoek and
Rehoboth, the Chinese have been constructing a storage
facility for a nearby military base since 2006. The GRN has
promised to acquire additional land to give to nearby
residents upon whose properties the building is encroaching.


10. (SBU) In December 2008, the China Friendship Development
International Engineering Design Consultation Corporation
donated USD 50,000 worth of computer equipment to the
Ministry of Justice. At the handover ceremony, Xioaping noted
that China also planned to give 200 Namibians the opportunity
to study in China.


11. (C) The governor of the Kavango region told us that China
provided a USD 5 million grant last year for the construction
of regional council offices in Namibia. The GRN considered
Kavango and the Omusati region to be priorities, and thus the
funds were divided between them.


12. (C) China has committed to upgrading and expanding the
aforementioned USD 650,000 Namibian Defense Force military
school into a more prestigious defense academy. Lin explained
that after years of discussion and planning, construction on
the academy was stalled. "They change plans every time we
meet," he said. However, a Chinese-built air base in the town
of Karibib, northwest of Windhoek, is nearly finished.
Beijing also provides Namibia a substantial number of
training slots in its military courses in China -- 68 in

2007. In addition, there are regular exchanges of visits by
senior Chinese and Namibian military officers. China also is

WINDHOEK 00000118 003.2 OF 003


assisting Namibia in building an Air Force fighter fleet, and
it provided 100 trucks to the Namibian Defense Forces
recently.


13. (SBU) China is about to begin construction on a school
and a 70-bed hospital in Omuthiya in the Oshikoto region with
a grant of USD 7 million. Two more schools will be built in
Tsumkwe, while the Kamutjonga Inland Fisheries Institution,
an aquaculture research center in the Kavango region, was
recently equipped by China. More aid is in the pipeline for
the construction of a USD 13 million youth training center.


14. (C) Asked how the Chinese determine the focus of their
assistance to Namibia, Lin told us that the embassy and the
GRN agree to a list of projects, and the GRN is then given
funds directly to implement the projects. Lin described the
process as requiring little oversight or accountability.


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


15. (C) While the Government of Namibia supports China as a
friend and ally, it is clear that many Namibians resent the
growing Chinese presence in their country. In addition to
complaints that the Chinese unfairly win tenders, ignore
labor regulations, and "steal Namibian jobs," there is also a
perception that the Chinese, many of whom own shops in the
northern part of the country, near the Angolan border (over
500 retail stores in the small town of Oshikongo),do not
make an effort to assimilate or learn local languages. It is
also commonly believed that immigration authorities overlook
visa fraud and grant entry permits to Chinese who claim to be
investors when in reality they intend to open retail shops. A
recent study by the Labour Resources and Research Institute
(LaRRI) argued the retail outlets bring few individual
benefits, such as skill and technology transfers, and do not
contribute to the country's overall development.

16 (C) In a country in which anti-colonial rhetoric still
resonates, the refrain that the Chinese presence in Namibia
is growing too large and influential and that the country has
been sold to its Asian friends, is becoming increasingly
common. An April Fools Day joke in a local German-language
newspaper, which featured an article stating that Windhoek
street signs would soon be posted in Chinese, resulted in
numerous angry calls and letters to the editor. Business
owners, particularly those in the northern regions near the
Angolan border, and labor unions are becoming increasingly
outspoken on the issue and have begun asking the government
to intervene.


17. (C) Nevertheless, given the close historical ties between
SWAPO and Beijing, and the significant concrete benefits they
continue to produce for the Government of Namibia, the
growing public resentment is unlikely to translate into
policy changes in the near term. At the invitation of SWAPO,
a ministerial-level delegation from the Communist Party
attended the fourth SWAPO national congress in 2007. It is
unclear whether the Chinese government has made or will make
any contributions directly to SWAPO in the lead-up to the
presidential and parliamentary elections this November, as
they reportedly did in 2004 with a USD 30,000 contribution.
In March, Xioaping used the occasion of Namibia's
independence day to write an opinion piece in the New Era
newspaper in which she extolled SWAPO's accomplishments,
thanked Namibia for its sympathy during the 2008 Sichuan
earthquake and for its support on Tibet- and Taiwan-related
issues, and promised unwavering assistance despite tough
economic times.

MATHIEU