CHINESE ENGAGEMENT IN LIBERIA

UNCLAS SECTION 01 OF 02 MONROVIA 000188 SIPDIS E.O. 12958: N/A TAGS: ECON EAID PREL LI SUBJECT: CHINESE ENGAGEMENT IN LIBERIA REF: (A) 10 STATE 10152; (B) 09 MONROVIA 844; (C) 08 MONROVIA 753 ¶1. (SBU) SUMMARY: In advance of the U.S.-China sub-regional dialogue to be held March 4, Embassy Monrovia prepared answers to ref A request on Chinese engagement in Liberia. China's active engagement in Liberia reflects an interest in the country's abundant natural resources, its status as a destination for affordable Chinese exports, and commercial opportunities provided by donor-funded reconstruction efforts. The Chinese Embassy has invested in "showpiece" infrastructure projects, provided assistance to the agricultural and educational sectors, and assisted Chinese companies in securing lucrative iron ore concessions and road building contracts. China has demonstrated active support for Liberia's reconstruction since 2003. Post collaborates with the Chinese Embassy on a university construction project, and there are opportunities for further collaboration, particularly in the energy sector. END SUMMARY. ¶2. (U) China and Liberia reestablished diplomatic ties in October 2003, a prerequisite for China's support for UNSC Resolution 1509, establishing the United Nations Mission in Liberia (UNMIL). Since that time, China has provided a contingent in UNMIL. Sino-Liberian relations depend on Liberia's commitment to the One-China policy, which has been passed twice by the legislature in August 2005 and October 2006. China and Liberia have participated in several high level visits including the historic February 2007 visit of President Hu Jintao to Liberia reciprocating President Johnson Sirleaf's October 2006 visit to China. China has recently built an impressive new embassy compound to house its approximately 25 resident diplomats. ¶3. (U) The PRC offers several high-profile assistance projects in Liberia. The Chinese Embassy is building a new $50 million campus complex for the University of Liberia, in Fendell, about 10 miles outside of Monrovia. The Chinese are also working on an Agriculture Technology Center at the Central Agricultural Research Institute (CARI) in Suacoco, Bong County. They have also refurbished three high schools in Montserrado County and have Chinese volunteers working in several ministries. Previous showcase projects include the 2007 renovation of the Samuel K. Doe (SKD) sports complex in Paynesville and the Tubman Military Barracks Project near Gbarnga, Bong County in December 2008. 
 ¶4. (U) Private Chinese investment also tends to focus on large infrastructure projects. The China Henan International Cooperation Group of Companies Limited (CHICO) was contracted by the World Bank to rehabilitate roads in Monrovia, as well as key arteries that facilitate national transit, such as the road to Roberts International Airport, and the Monrovia-Buchanan highway. CHICO's ubiquitous signs have given many Liberians the impression that road construction is funded by the Chinese, rather than the World Bank. CHICO is also now engaged in mining exploration. ¶5. (U) The GOL proactively seeks foreign direct investment and assistance from China. Recently, Vice President Boakai called on Chinese shipbuilders to consider establishing a ship building plant in Liberia, and officials in Grand Bassa County have been trying to persuade China for several years to establish a special economic zone around the port of Buchanan. ¶6. (SBU) However, some Chinese investments have run into problems. The largest Chinese investment, the $2.6 billion iron-ore Bong Mine, struggled to overcome the economic crisis and delayed paying the GOL its initial $47 million in fees. Agriculture Minister Chenoweth complained the Ministry was not involved in the planning of CARI. And while Liberia imported nearly $530 million in goods from China in 2006, there is a widespread sentiment that Chinese goods, particularly electronics and pharmaceuticals, are of poor quality. ¶7. (U) U.S.-China collaboration is robust, epitomized by the new University of Liberia Fendell campus. The Chinese built an expansive complex complete with lecturers' quarters, students' dormitories, an administration building, classrooms, water tower and a multi-purpose sports stadium. USAID, through the Liberia MONROVIA 00000188 002 OF 002 Community Infrastructure Program (LCIP),is establishing a "center of excellence" for engineering and road maintenance at the School of Engineering at Fendell. Additionally, the Chinese Embassy has consulted a U.S. Trade and Development Agency feasibility study on how to renovate the Mt. Coffee Hydroelectric Dam (ref B). The China Development Fund and China Union have approached the GOL with a build-operate-transfer agreement that would permit electricity from Mt. Coffee to power Bong Mines for 15 years. ¶8. (U) There is tremendous potential for further U.S.-Chinese cooperation in Liberia, particularly in the areas of agriculture and energy. For example, there is mutual interest in rebuilding Mt. Coffee. If the USG is to partner with China, it must be in a trilateral arrangement (with the host country being the third leg of the partnership). USAID is working with the Ministry of Agriculture and the Ministry of Lands, Mines and Energy to take leadership in fostering such partnerships. The U.S. and Chinese Ambassadors will both give opening remarks at an Africa-China-U.S. Trilateral Dialogue in Monrovia February 24-25. The two-day event is sponsored by the Leon H. Sullivan Foundation and the Chinese Academy of Social Sciences, and will focus on corporate social responsibility. THOMAS-GREENFIELD