CHINA IN DJIBOUTI

UNCLAS DJIBOUTI 000181 SENSITIVE SIPDIS DEPARTMENT FOR AF/E AND AF/RSA E.O. 12958: N/A TAGS: PREL EAID ECON DJ CH SUBJECT: CHINA IN DJIBOUTI REF: 10 STATE 10152; 08 DJIBOUTI 430 ¶1. (SBU) SUMMARY. China cemented diplomatic ties with Djibouti one year after independence in 1977, and for thirty years has provided bilateral gift aid and loans, mostly in the form of popular standalone infrastructure and building projects. In 2009, China's involvement in Djibouti continued to deepen--both through additional aid projects, and through growing interest from Chinese companies in the transport, construction, and energy sectors. While there is likely some room for coordination between USAID's health programming and Chinese investments in health infrastructure, there is generally little overlap between bilateral U.S. assistance (largely in health, education, and democracy and governance, with a focus on capacity building) and China's focus on one-off construction projects in Djibouti. END SUMMARY. -------------- -------------- --- CHINA IN DJIBOUTI: PUBLIC BUILDINGS, PARTNERSHIPS ON INFRASTRUCTRURE AND ENERGY -------------- -------------- -- ¶2. (SBU) Many of Djibouti's best-known public buildings were financed through Chinese loans or gifts, including the "People's Palace" conference center (USD 10 million, constructed 1983), Djibouti's main sports stadium (USD 11 million, constructed 1991), a new wing of the main public hospital, the Ministry of Foreign Affairs, and several middle schools, including in Holl-Holl and Yoboki. Non-construction-based aid from China includes student exchanges, as well as a Chinese medical team operating in the Chinese-built hospital wing. Chinese businesses are also active in Djibouti, notably in the construction sector. President Guelleh visited China with a group of government officials and business people in 2001. Djibouti Telecom, the state-run telecommunications monopoly, has invested heavily in Chinese technologies, partnering with the Chinese companies ZTE and Huawei. ¶3. (SBU) China's most recent bilateral aid to Djibouti includes a May 2009 donation of construction equipment to the Ministry of Transport. In addition, China agreed in August 2009 to finance USD 4.3 million in renovations of the Chinese-built "People's Palace" conference center. The building had been damaged in a July 2009 electrical failure, possibly due to shoddy wiring. In June 2009, Djiboutian President Guelleh inaugurated construction work on a new Chinese-funded regional hospital in the town of Arta. The USD 8.2 million project will include four buildings, seven annexes, an emergency room, and a total of 104 beds. The GODJ inked several high-profile agreements with Chinese companies in 2009, notably a July 2009 deal between Chinese firm CGCG and the Ministry of Energy on geothermal/mining exploration and construction of a fuel terminal and 150 megawatt gas generator. China Railway International also signed an agreement in April 2009 with the Ministry of Transport on construction of a 12 km spur linking Djibouti's new container terminal to an existing rail line. -------------- COORDINATION OPPORTUNITIES -------------- ¶4. (SBU) Djibouti's small diplomatic community affords many opportunities for informal coordination. However, there are no current examples of USG-China partnership on development initiatives, and areas of interest are generally fairly divergent. With China's significant investment in a new regional hospital and USAID's ongoing health programming, there may be increased opportunities for cooperation in the health sector. -------------- COMMENT -------------- ¶5. (SBU) The GODJ's signature diplomatic style is to maintain friendly relations with a dizzying range of partners. Djiboutians appreciate Chinese investment in critical infrastructure priorities, as well as China's general tendency to give "things" rather than providing capacity-building. However, China's reliance on Chinese workers and companies to build its projects is less esteemed. Although Chinese products may be cheaper, Djiboutians often consider them less reliable and of lower quality than French or American goods. While the GODJ lauded China's quick support to renovate a building that showcases Sino-Djiboutian cooperation, they also perhaps grumbled in private that faulty Chinese electrical wiring likely caused the destructive fire in the first place. END COMMENT. SWAN