China's Growing Presence in Cameroon

UNCLAS SECTION 01 OF 03 YAOUNDE 000095 SENSITIVE SIPDIS THIS MESSAGE IS BEING RESENT AS INFO BEIJING. ORIGINAL IS YAOUNDE 91. E.O. 12958: N/A TAGS: PGOV PREL CM ECON EFIS EINV CH ETRD ENRG EPET EAGR SUBJECT: China's Growing Presence in Cameroon ¶1. (SBU) Summary: China has a long bilateral friendship with Cameroon, reflected in the 2007 visit to Cameroon by President Hu Jintao. The Chinese government has provided grants or concessional loans to fund a number infrastructure projects (hospitals, schools, roads, and stadiums). China provides military training, equipment, and technical assistance. Chinese engagement has increased over the past year, with new infrastructure projects and broader commercial ties, including a 34% jump in bilateral trade from 2008 to 2009. Cameroonians appear increasingly suspicious of China's engagement. Despite China's growing importance in Cameroon, we and other major donors see no real opportunities for cooperation. This cable responds to reftel request for information in advance of a U.S.-China sub-regional dialogue in March. End summary. A History of Engagement ¶2. (SBU) China sees Cameroon as a longtime friend, with relations established in 1971. Cameroon has consistently supported the One China policy. China sees Cameroon as a linchpin in the Central African region, with a port and economy of regional importance. Chinese President Hu Jintao's January 30 - February 1, 2007 visit to Cameroon (and Cameroon President Biya's four visits to China) reflect this historical friendship and regional importance. ¶3. (U) President Hu Jintao signed eight bilateral accords during his 2007 visit worth over $129 million, nearly a quarter of which ($30.7 million) was debt forgiveness. The accords awarded concessional loans to build and equip a gynecological, obstetric and pediatric hospital in Douala, construct two rural primary schools, and increase technical and economic cooperation. The money also funded projects of the GRC's choosing, which included wireless (CDMA) phone technology for CAMTEL (developed by Huawei Technologies),a potable water project for Douala, and several small agricultural projects. ¶4. (U) China has funded other construction and infrastructure projects. The Lagdo hydroelectric dam was built by a Chinese construction company in the 1980s. China built the Guider Hospital in North Province, the Mbalmayo Hospital, the Yaounde Gyno-Obstetric Hospital, and the Yaounde Conference Center. China has also built a number of roads in Douala. Some small towns in Cameroon, such as Guider with a population of about 70,000 in North Region, benefit from resident Chinese doctors funded by the Chinese government. The Chinese are active in the fishing sector, including in Limbe. ¶5. (SBU) In other areas, China provides some scholarships for studying in China and has built a Confucius Institute at the Institute of International Relations (IRIC) for the study of Chinese language and culture. China has an ongoing military-military relationship with Cameroon, which includes training for Cameroonian military students each year in China, technical advisors to assist in repairing Cameroonian military vehicles and naval vessels, and Chinese military sales. New Initiatives: Cultural and Political ¶6. (U) Chinese engagement has intensified over the past year. The Embassy hosted high profile cultural events in Yaounde and Douala to mark the sixtieth anniversary of the Chinese Revolution, followed by an even higher profile opening of a major indoor sports stadium in Yaounde, funded by a Chinese government grant and built by a Chinese construction firm. China recently donated 510 books to the University of Maroua in the Far North Region as the basis of a local Confucius Institute. The Chinese Communist Party donated computers to the ruling Cameroon People's Democratic Movement (CPDM). Cameroon's President of the National Assembly, Caveye Yegui Djibril, made a widely publicized visit to China in December ¶2009. New Economic Ties YAOUNDE 00000095 002 OF 003 ¶7. (U) In August, 2009 the government awarded Chinese firm SinoHydro Corporation Ltd. a $302 million contract on a Build Own Operate basis to construct the Memve'ele hydroelectric dam in South Region. The project had previously been under negotiation with British firm Globelecq. In January 2010, China signed a $49 million preferential loan with Cameroon for the construction of the Mekin hydroelectric power plant in the South Region. In November 2009, Exim Bank China contributed financing worth more than $180 million for various projects, including the second phase of a Douala water project, the construction of two stadiums in Bafoussam and Limbe, and the construction of the Douala Gyno-Obstetric Hospital. ¶8. (U) Also in the past year, Chinese companies have gotten agreements to explore for iron ore near Kribi and oil in the Far North region. With the collapse of the timber market in Europe as a result of the global financial crisis, sources tell us that more Cameroonian timber has been exported to China. Chinese nationals have also been given large tracts of land for agricultural production, including rice, mushrooms and corn. Other Chinese road projects are also in the works. ¶9. (U) China and Cameroon signed a trade agreement in 2002 giving each other "most favored nation" trading status. According to Chinese government trade statistics for the first three quarters of 2009, Chinese trade with Cameroon totaled $1.5 million in 2009 (up 34%),with 916 million in Chinese exports to Cameroon (up 17%) and $5.9 million in imports from Cameroon to China (up 71%). According to 2008 WTO data, China is Cameroon's third largest source of imports (9.1%); according to the Chinese Embassy here, China is Cameroon's sixth largest export market. Cameroon's main Chinese imports are building materials, chemicals, machinery, textiles, and electronics. Cameroon's main exports to China are oil, timber, rubber, cotton and agricultural products. ¶10. (U) China's commercial presence in Cameroon ranges from restaurants, small shops and vending operations, to at least 15 Chinese public works companies with business totaling over $16 million. According to Xinhua News Agency, the number of Chinese in Cameroon doubled from 2006 to 2008 to around 2,000. We would guess this has increased significantly since 2008, with Chinese citizens much more evident in the country over the past year. Cameroon's Views of China ¶11. (SBU) Cameroonians seem increasingly suspicious of China's presence and intentions in Cameroon. There is concern about the growing activity of small-scale businesses and the larger numbers of Chinese in Yaounde and Douala. There is also frustration with competition from cheap Chinese goods, problems with counterfeit Chinese imports, and the small number of Cameroonians employed in Chinese projects. China's image was damaged when Chinese were discovered smuggling ivory from Cameroon to China in 2006 and 2007. Many Cameroonians also resent illegal Chinese fishing in Cameroonian waters. Pol/Econ LES witnessed this fishing when accompanying visiting NOAA officials on a boat trip off the coast of Kribi. In October 2008, the Cameroonian Navy also made a very high profile and well-publicized seizure of a Chinese fishing trawler that was illegally operating near Kribi. Traditional Cameroonian fishermen are especially antagonistic towards large-scale Chinese fishing operations. The Cameroonians believe that the Chinese are over-harvesting the coastal areas and making it difficult for traditional fishermen to survive. ¶12. (SBU) The GRC seeks to benefit from a full range of partners and sees its relationship with China as a way to balance its friendly relations with France and the United States. It appreciates China's infrastructure support. No doubt some in government also appreciate the Chinese willingness to look the other way on corruption, democracy and human rights. However, there is also a certain degree of caution among government contacts. In a recent meeting with Ambassador, President Paul Biya expressed frustration with China's global role. YAOUNDE 00000095 003 OF 003 Areas for Cooperation ¶13. (SBU) We are friendly with Chinese diplomats on a personal level and invite them to many of our events. The Chinese invite us to their large diplomatic receptions and occasionally to smaller events. However, there are no areas in which we formally coordinate or cooperate. Both the USG and the Chinese government support often complementary efforts in the health, energy and agriculture sectors, and in principle we and other donors believe it would be positive to have a more collaborative relationship. However, we see little scope for this at the moment. Our approaches to development and attitudes toward corruption and acceptable business practices are on opposite ends of the spectrum. These divergences are compounded by differences in language and working styles, as well as lingering mutual suspicions. ¶14. (SBU) Other donor embassies also see little room for cooperation with the Chinese. The recently departed EU Chief of Mission privately discouraged engaging the Chinese as they were not "like-minded." The Multi-Donor Committee, established to coordinate aid pursuant to the Paris Declaration, rarely sees Chinese participation. French development officials, who carry great weight in the development community in Cameroon, recently said they too saw no prospect for cooperation with China. GARVEY