US embassy cable - 04AMMAN6760

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 006760 
 
SIPDIS 
 
E.O. 12958: DECL: 08/09/2014 
TAGS: ETRD, EINV, EAID, JO, CH, KS, TH 
SUBJECT: JORDAN'S KING ABDULLAH VISITS ASIA SEEKING TRADE, 
AID, AND INVESTMENTS 
 
REF: BEIJING 13093 
 
 1. (U)  SUMMARY:  King Abdullah's swing through Asia was 
aimed at diversifying the Kingdom's trade and investment 
partners and seeking bilateral assistance.  The King 
succeeded in obtaining several grants and loans from China 
and South Korea; Jordan and Korea also signed a tax treaty. 
The King's stop in Hong Kong was to tap into Hong Kong's 
expertise in attracting foreign investment and its role as a 
trade entrepot.  END SUMMARY. 
 
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ABDULLAH VISITS KOREA 
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2.  (U)  During his July 23-26 visit to South Korea, Jordan's 
King Abdullah met with South Korean President Roh Moo-hyan 
and with the Chairmen of Hyundai and Samsung Electronics to 
discuss investment opportunities.  Jordan's Planning Minister 
Bassem Awadallah signed a grant agreement with Foreign 
Minister Ban Ki-moon where Jordan will receive USD five 
million to finance the computerization of Ministry of 
Political Development and Parliamentary Affairs operations, 
upgrade Ministry of Transport IT systems, refurbish several 
health centers, develop local knowledge centers under the 
King Abdullah Development Fund (these are rural centers for 
teaching computer skills), and support various training 
programs for government employees.  The two governments also 
signed a loan agreement for USD 24 million with a ten-year 
grace period and 30-year repayment plan to finance 
environmental projects aimed at protecting artesian water 
resources in Jordan and to provide sewage services to 
southern Amman.  In addition, the two sides signed a 
bilateral double taxation avoidance treaty. 
 
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CHINA: AID AND INVESTMENT 
------------------------- 
 
3.  (U)  In the course of his July 26-31 visit to China, King 
Abdullah met with President Hu Jintao and separately with 
Prime Minister Wen Jiabo.  Minister Awadallah signed a grant 
agreement with Minister of Trade Bu Tshali under which Jordan 
will receive USD 7.2 million to support several projects 
under Jordan's Social Economic Transformation Program for the 
years 2004-2006.  The two sides also signed a loan agreement 
for USD 24 million with a five-year grace period and 20-year 
repayment program to finance yet-to-be-agreed projects. 
According to press reports, during the visit, Planning 
Minister Awadallah pointed out that China already finances 
Jordan's Ma'an Industrial Estate (located in the south of the 
country), several water projects, and the Ain Al-Basha 
Hospital Project.  He added that Jordan also welcomed further 
Chinese investments in Jordan, particular in Jordan's 
Qualifying Industrial Zones (QIZs). 
 
4.  (U)  During talks with military officials, King Abdullah 
also expressed interest in diversifying Jordan's sources of 
military equipment and said that China could be a potential 
source (Reftel). 
 
5.  (U)  The King visited Hong Kong and met Chief Executive 
Tung Chee-Hwa and with business leaders in order to learn 
from that city's experience in attracting foreign investment 
and in developing highly efficient transport and maritime 
sectors.  The King was particularly interested in Hong Kong's 
efficient port operations and the lessons it could provide 
for Jordan's congested Aqaba port. 
 
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LITTLE GAINED IN THAILAND 
------------------------- 
 
6.  (U)  Stopping in Thailand on August 1, King Abdullah met 
with King Bhumibol Adulyadej but, according to press reports, 
no agreements were signed. 
 
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COMMENT 
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7.  (C)  In addition to watching his national soccer team 
compete in the Asian Cup, in his tour through Asia King 
Abdullah was in search of aid, trade and increasing Asian 
investment in Jordan.  Planning Minister Awadallah told 
Charge that Jordan is looking to the Chinese to establish 
industrial production facilities here, to manufacture 
possibly cars and cell phones.  He admitted that Egypt, also 
seeking such Chinese investments, was a strong competitor 
with a more established industrial base.  Royal Court 
Minister Samir Rifai told Charge the King is especially keen 
to develop IT technology deals between Jordan and China. 
8.  (C)  Judging from the grants and soft loans the King 
picked up, the trip can be judged a modest success.  However, 
economic and trade ties between Jordan and Asia remain 
minimal.  In a current dispute with the USG over a Jordanian 
pre-inspection program which affects imports from the U.S., 
shoddy Asian products are routinely cited as the reason the 
program is needed to protect the safety of Jordanian 
consumers. 
8.  (C)  In addition, the King's long stay in China reflects 
concern within Jordan about the expiration of the Multi-Fiber 
Arrangement at the end of this year and its impact on the 
23,000 Jordanians working in the textile sector.  QIZ 
managers throughout Jordan fear the end of the MFA will bring 
a flood of low-cost Chinese textiles on to the world market, 
undercutting Jordan's QIZ textile producers.  Explanations of 
the production increase safeguards which China accepted as 
part of its WTO accession only partially soothe Jordanian 
nerves. 
 
HALE