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