Namibia: Chinese Engagement and Potential Areas for

UNCLAS WINDHOEK 000132 SENSITIVE SIPDIS FOR AF/RSA LOUIS MAZEL, LAURA GRIESMER AND RYAN BOWLES E.O. 12958: N/A TAGS: PREL EAID CH WA SUBJECT: Namibia: Chinese Engagement and Potential Areas for Cooperation REF: A) STATE 10152; B) 09 WINDHOEK 118; C) 09 WINDHOEK 302 D) 09 WINDHOEK 424; E) 09 Windhoek 324; F) 09 Windhoek 302 ¶1. (SBU)Summary. Namibia and China enjoy excellent relations based on historical ties and current bilateral trade and development assistance. Those ties have only strengthened since 2007, when Chinese President Hu Jintao visited Namibia and the two governments signed an agreement for a concessionary loan and a credit line-- each valued at approximately USD 130 million-- as well as initiated several cooperative agreements on economic technology, human resources, education and tourism (ref B). There are currently no examples of U.S.-China collaboration in Namibia, but there is potential, and likely willingness on the part of the Chinese, to develop such a partnership. End summary. -------------- Trade and Commerce -------------- ¶2. (SBU) Trade between China and Namibia continues to grow at a remarkable pace. In 2007, bilateral trade totaled nearly USD 400 million, while in 2009, the volume of trade between Namibia and China exceeded USD 550 million, according to China's Ambassador to Namibia Ren Xiaoping. The balance of trade favors Namibian exporters, who in 2009 sold more goods-- mostly semi-processed minerals, such as uranium,-- to China. China, in turn, exported vehicles, trucks and equipment to Namibia. Rossing, Namibia's largest uranium mine, produced 4150 metric tons of uranium in 2009, and of that, China is estimated to have obtained approximately 1000 metric tons. In January 2010, Paladin Energy, which owns Namibia's second fully operational uranium mine (Langer Heinrich),announced that it would send a trial shipment of uranium to China "to test and demonstrate the efficiency of logistics from Africa to Chinese conversion facilities." China is also expected to purchase 35 percent of the Areva Trekkopje mine's uranium output, once the operation achieves full production levels in 2011. In addition, a number of Chinese-owned companies have mining exploration licenses. Chinese-owned Zhonghe Resources (Namibia) Development (Pty) Ltd has a exploration license that covers nuclear fuel (uranium). Other Chinese mining firms (Namibia East China Non-Ferrous Mineral Exploration and Development and Namibia-China Mineral Resources Inv. Dev Pty Ltd) hold exploration licenses for other minerals, such as copper. ¶3. (SBU) China has also deepened its cooperation with Namibia in the aquaculture sector. In January 2010, Vice Minister of Agriculture Niu Dun led China's first delegation to Namibia to discuss bilateral cooperation in the fishing industry. China reportedly offered Namibia student and information exchange programs as well as approximately USD 2 million for aquaculture development. Chinese firms continue to dominate the construction industry, which has engendered some public resentment. In a move seen to target Asian construction firms, the Tender Board announced in February that companies using unskilled and semi-skilled foreign laborers would no longer qualify for government tenders. It is unclear how this decision will affect construction projects financed by tied aid. ¶4. (SBU) Some Chinese business deals have recently come under harsh criticism and allegations of corruption (ref C). For instance, Namibia's Public Services Commissioner, her business partner and a Chinese national are alleged to have defrauded the Namibian government of USD 4.2 million in a deal involving the GRN's purchase of x-ray scanning equipment from NucTech, a Chinese government-owned company (refs E and F). -------------- Development Assistance -------------- ¶5. (SBU) China is showing growing interest in providing development assistance to Namibia. In December 2009, Namibia signed a grant agreement with China for USD 11 million. A portion of those funds has already been used to build rural schools, known as China Namibia Friendship Schools, in the towns of Tsumkwe and Omuthiya. The Chinese government has financed the building and refurbishment of several hospitals, and Chinese medical teams work in a number of Namibian health facilities. The Chinese are reportedly becoming more involved in rural development projects with women and youth. ¶6. (SBU) China has also provided Namibia with scholarships and other training opportunities. Since 2006, China has offered over 300 training opportunities to Namibians in fields such as public administration, economics, agriculture, aquaculture, mining, and health, according to Ambassador Xiaoping. In October 2009, major newspapers reported that the Chinese government had given several scholarships for study at Chinese universities to the children of prominent politicians, including the daughter of President Pohamba (ref D). ¶7. (SBU) In addition, Ambassador Xiaoping has announced that it is her goal to implement in Namibia all eight of the African development initiatives launched by President Hu in 2006 at the China Africa Summit held in Beijing. She also credits the Forum of China-Africa Cooperation with bringing "tangible benefits" to Namibia, such as the construction of: the regional council buildings in Kavango and Omusati, the president's official residence (which is part of the North Korean-built State House complex),a fishery laboratory in Kavango, a youth training center in Grootfontein, and a yet-to-be-constructed defense academy in Okahandja (ref B). -------------- Military Cooperation -------------- ¶8. (SBU) China has a permanently assigned military attach???? to its diplomatic presence in Namibia. The Chinese and Namibians often conduct exchanges of senior military officers and cooperate on professional military education initiatives (ref B ). -------------- U.S.- China Collaboration -------------- ¶9. (SBU) There are no examples of U.S.-China collaboration in the development sector. However, there is certainly potential for collaboration and a willingness on the part of senior officials at the Chinese Embassy to work with the USG. At a recent dinner hosted by Ambassador Xiaoping as well on several other occasions, Chinese diplomats have expressed interest in partnering on development projects. One possible area for collaboration is disaster preparedness, a sector in which the Chinese are becoming active internationally. USAID's Office of Foreign Disaster Assistance could assist perhaps in developing with the Chinese a training and capacity building program that supports ongoing multilateral efforts to empower the Red Cross in Namibia and in the region. ¶10. (SBU) There may also be possibilities to collaborate in the health sector, whereby China undertakes to upgrade health facilities, while the USG provides technical assistance to develop health professionals. Similarly, if the USG eventually expands its work in the broader health programs in Namibia, we could work with the Chinese on integrating services to rural clinics and health facilities. It should be noted that the Chinese have also inquired about the activities of the Peace Corps Volunteers in Namibia, ostensibly to gain a better understanding of how the organization works with a view to improving their own volunteer corps structure. A partnership may be possible in this realm as well. MATHIEU