US embassy cable - 05KINGSTON386

C O N F I D E N T I A L SECTION 01 OF 04 KINGSTON 000386 
 
SIPDIS 
 
WHA/CAR (BENT), EAP/CM, WHA/PDA (MJOHNSON) 
 
E.O. 12958: DECL: 01/13/2015 
TAGS: PREL, BTIO, EAID, KPAO, CH, JM 
SUBJECT: JAMAICA COMMITTED TO STRONGER TIES WITH CHINA 
 
Classified By: Charge Thomas C. Tighe for Reasons 1.4 (b) and (d). 
 
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Summary 
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1. (C) Eager to attract Chinese investment in Jamaica's 
economy and tourists to its beaches, Prime Minister P.J. 
Patterson and Foreign Minister K.D. Knight rolled out the red 
carpet for Chinese Vice President Zeng Qinghong and his 
150-member Chinese trade delegation, which visited Kingston 
February 2-5.  Jamaica has seized the opportunity to 
encourage Chinese investment, and the clearest indication yet 
of the GOJ's ambition to expand its relationship with China 
is its co-sponsoring of the China-Caribbean Trade Fair and 
Forum, led by Zeng, the highest-ranking PRC official ever to 
visit Jamaica.  The Jamaica Defense Force Chief of Staff is 
planning to visit the PRC in 2005, possibly seeking an 
alternative for military assistance should the GOJ not enter 
into an Article 98 agreement.  End Summary. 
 
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GOJ Welcomes the Chinese (Investment) 
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2. (C) The GOJ and GOC co-hosted a China-Caribbean Economic 
and Trade Cooperation Forum and Trade Fair February 2 through 
5.  The Forum, which had a ministerial and business 
conference component, was held at the Jamaica Conference 
Centre and the Trade Fair was held at the National Arena in 
Kingston. The Chinese delegation was led by the 
highest-ranking PRC official ever to visit Jamaica, Vice 
President Zeng Qinghong.  Robert Stephens, Senior Vice 
President of the Port Authority of Jamaica (PAJ) and Chairman 
of the event's planning committee told Poloff beforehand that 
this forum presented a golden opportunity for private sector 
interests in Jamaica and the Caribbean to forge ties with 
China. 
 
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Prelude to the Visit:  the Jamaica-China Relationship 
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3. (C) With Grenada's recent switch from recognizing Taipei 
to establishing full diplomatic relations with Beijing (Ref 
A) continuing a regional trend, Jamaica is proud of its long 
relationship with the People's Republic of China (PRC).  The 
PRC and Jamaica formally established diplomatic relations on 
November 21, 1972 and in 1973 China opened its Embassy in 
Jamaica.  But unofficial ties long predated either Jamaican 
independence or the establishment of the PRC after the Second 
World War.  Chinese immigrants first settled in Jamaica in 
1854 as indentured laborers; second and third generation 
Chinese now account for approximately two percent of 
Jamaica's population.  In May of 1992, the Jamaican 
government accredited its ambassador to Japan as its 
non-resident ambassador to China.  China is currently 
building a large new embassy in Kingston which may soon 
become the second largest mission on the island, after the 
U.S. Embassy.  Jamaica has announced that it would be opening 
an Embassy in Beijing in the fall. 
 
4. (U) In a recent press release, Chinese Ambassador to 
Jamaica Zhao Zhenyu stated that Jamaica has been certified as 
an approved destination for Chinese tourists.  (The PRC 
allows its citizens to undertake group travel only to 
countries having this status.)  In November 2004, FM Knight 
stated discussions with the Cuban government at the "highest 
level" will continue in the pursuit of a joint Cuban/Jamaican 
tourism package.  Prime Minister PJ Patterson added that this 
development would open the Caribbean region to a potential 
new market and valuable source of tourism revenue. 
 
5. (C) The GOJ sees China as an important source of what it 
badly needs at this time, employment opportunities for its 
13.1 percent unemployed population, and also seeks to 
leverage the island's location in the Caribbean to enhance 
its relationship with Beijing.  Robert Stephens, Senior Vice 
President at the Port Authority of Jamaica (PAJ), recently 
told Poloff that due to Jamaica's geographical location, 
Jamaica will continue to concentrate on expanding its 
commercial free zone facilities to be able to provide 
logistics services for companies from China to bring their 
goods in bulk to Jamaica and use it as the distribution hub 
throughout the Americas.  The China-Caribbean Trade Fair and 
Forum, Stephens noted, is the "foundation on which all of 
this is built." 
 
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China-Caribbean Trade Fair and Forum - Much Ado About Nothing? 
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6. (C) Ambassador Peter Black, Ministry of Foreign Affairs 
and Foreign Trade (MFAFT) Undersecretary for Bilateral and 
Regional Affairs, told Poloff that Jamaica was chosen to host 
this forum because it is China's largest trading partner in 
CARICOM.  Over the past two years, he said, China provided 
technical and financial assistance to Jamaica, all towards 
the goal of expanding trade and increasing political and 
economic ties.  As China continues to seek expansion of its 
production base by outsourcing some of its production 
activities, said Black, the Forum and Trade Fair is an 
excellent opportunity for Jamaica to attract Chinese 
investment. 
 
7. (C) A ministerial-level forum which convenes every four to 
five years, alternating between China and a Caribbean 
country, took place on February 2.  The forum's aim was to 
promote and deepen economic exchanges between China and 
Caribbean countries.  The forum included workshops where 
senior government officials along with business interest 
groups, agencies and individuals, addressed topics such as: 
how to do business with China; the Caribbean investment 
environment; investment and trade; tourism; aviation; 
agricultural and fishing cooperation; finance and human 
resources; and business networking.  In preparation for the 
Forum and Trade Fair, the GOJ in collaboration with the PRC 
held numerous "sensitization seminars" which focused on 
cultural awareness, business principles and practices in 
China and the Caribbean, as well as customs and immigration 
issues. 
 
8. (C) Although press briefing materials and the PAJ's 
Stephens claimed over 50 exhibitors from China would 
participate along with over 500 buyers and business partners 
from the Caribbean region, there were only 17 exhibitors from 
China and approximately ten from the Caribbean, including 
Jamaica.  (Note:  According to Nicholas Baylis, Assistant 
Vice President of Security at the PAJ, during a post-Fair 
meeting, the President of the PAJ criticized Stephens for 
being "duped by the Chinese" regarding the number of Chinese 
exhibitors that were promised. However, the PAJ stated in a 
February 10 press release that the Fair was a success 
reiterating their claim that over 80 Chinese exhibitors were 
present.  End Note.)  Poloff attended both the opening 
ceremony and the last day of the fair.  Readily apparent was 
the absence of many Jamaican business people.  The Chinese 
exhibitors surveyed on the last day of the fair told Poloff 
that many visitors to the booths were more interested in 
purchasing the goods on display than on entering into 
business partnerships. 
 
9. (C) Liu Jian Ling, Marketing Agent for the China National 
Construction and Agricultural Machinery Import and Export 
Corporation, said that she was "very anxious to enter into a 
partnership with the Jamaicans, but not much Jamaican 
interest right now."  Although Jamaica has been certified an 
approved Chinese tourist destination, a representative from 
the China Commercial International Travel Service said that 
she had not received any real interest in partnering from 
Jamaican tourism agencies.  Tellingly, an editorial cartoon 
that appeared in a leading Jamaican daily during the 
conference depicted a forlorn-looking Prime Minister 
Patterson, seated at an empty conference table, facing Vice 
President Zeng, whose table is laden with Chinese-made shoes, 
computers and other goods ready for sale to Jamaicans. 
 
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Forging Stronger Ties 
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10. (U) During the opening ceremony of the Trade Forum on 
February 2, Vice President Zeng called for continued and 
substantive progress in China's relationship with the 
Caribbean.  He proposed the exploration of new forms of 
cooperation; the need for governments to seek to expand the 
ways they are providing quality services; and the need to 
encourage cultural exchanges.  He also proposed that the 
Caribbean region should engage in greater consultation and 
cooperation with China "in order to safeguard common 
interests." 
 
11. (U) During the trade delegation's visit to Kingston: 
 
-- Antigua, Bahamas, Barbados and St. Lucia signed the 
Approved Destination Status (ADS) memorandum that facilitates 
Chinese nationals wanting to travel to the Caribbean; 
 
-- Jamaica's Ministry of Transport and Works and the China 
National Machinery Equipment Corp Group (CNMEC) signed a 
Memorandum of Understanding for the rehabilitation and 
reconstruction of the island's railway system.  CNMEC will 
provide passenger coaches, cargo, wagons and locomotives for 
the system.  GOJ officials claim the PRC initially expressed 
an interest in this project.  Other MOUs were signed between 
Jamaica and China ranging from tourism cooperation to Chinese 
language training; and 
 
-- PAJ and COSCO, China's national shipping line, signed a 
Memorandum of Understanding for China to conduct a 
feasibility study for further development of the 
transshipment terminal. 
 
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China's Impact on Jamaica's Economy 
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12. (C) Jamaica has become China's biggest Caribbean trading 
partner, exporting alumina and bauxite while importing 
textiles, clothing and industrial products. A GOJ analysis of 
Jamaica's alumina shipments by destination revealed that 
China accounted for about 21 percent of volume shipments 
originating from Jamaica in the first eleven months of 2004, 
making China Jamaica's second largest market after Canada. 
The PAJ is developing larger free zone areas to accommodate 
the expected increase in required capacity it expects that 
Chinese investment will bring in the next five to ten years. 
Trade between Jamaica and China was US$210 million in 2003, 
up thirty percent from 2002.  Meanwhile, the Jamaican House 
of Representatives approved a US$21 million loan agreement 
between the PAJ and the Export/Import Bank of China.  The 
loan will facilitate the purchase of four new gantry cranes 
that will be installed at the north and south terminals of 
the Kingston container terminal.  The cranes will be provided 
by the Shanghai Zhenhua Port Machinery Company.  The purchase 
of these cranes will assist in expansion of the ports. 
Stephens said that the Chinese are looking for an area to use 
as a distribution hub for the Americas, and "what better 
place than Jamaica?"  Twenty of Jamaica's 22 ports have been 
certified International Ship and Port Facility Security 
(ISPS) compliant.  The GOJ has taken ISPS compliance very 
seriously and recognizes that this status will attract more 
trade through its ports. 
 
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From Table Tennis to Sports Complexes 
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13. (C) The PRC has not been shy in showing its commitment to 
the GOJ in ways other than trade.  In 2004, Ambassador Zhao 
provided badminton equipment worth JM$1.5 million to the 
Jamaica Badminton Association to assist in development of the 
sport in Jamaica.  During this announcement, Ambassador Zhao 
formally introduced two Chinese coaches secured by the 
Jamaica Table Tennis Association (JTAA) to teach table tennis 
on a two-year contract.  Under the agreement, the PRC will be 
responsible for their salaries and accommodation.  On January 
4, Minister of Foreign Affairs and Foreign Trade K.D. Knight, 
in a joint press event with Ambassador Zhao, signed a 
contract for the PRC to fully fund and construct a J$222 
million (approximately U.S.$3 million) multi-sports complex 
in the Sligoville, St. Catherine area by spring of 2006.  The 
complex will house the first dedicated cricket and soccer 
fields on the island.  Interestingly, the planned sports 
complex is to be built in a rural and semi-remote locale, but 
which is in the parliamentary constituency of FM Knight. 
 
14. (C) China has also funded a language laboratory at the 
University of the West Indies and has agreed to send a 
teacher from the PRC.  The lab is scheduled to be 
commissioned sometime in February, after the Trade Forum. 
 
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China and Jamaica's Military 
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15. (C) In addition to increasing trade ties with Jamaica, on 
November 29, 2004, China and Jamaica signed a Memorandum of 
Understanding wherein the PRC will provide US$362,000 in the 
form of uniforms, teaching aids and tents to the Jamaica 
Defense Force (JDF).  This is the second grant for the JDF 
from the Chinese government.  The first MOU was signed 
December 5, 2002, and provided US$234,000 for uniforms, 
computers, radios and other non-operational, non-combat 
equipment.  The JDF has sent one officer to Chinese Command 
and General Staff College in China.  JDF Chief of Staff, Rear 
Admiral Hardley Lewin's visit to China in April, 2005 will be 
totally funded by the PRC.  DATT and MLO report that Lewin's 
visit may be to investigate options should Jamaica lose 
military assistance from the U.S. if the GOJ decides not to 
enter into an Article 98 agreement.  China does not have a 
military attach assigned to Jamaica; however, as China steps 
up aid to the JDF, one may be assigned in the future. 
 
Comment 
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16. (C) GOJ interest in pursuing closer ties with China is 
genuine given the size of the Chinese market, and also 
because the PRC offers a potential alternative for providing 
military assistance for the resource-starved Jamaica Defense 
Force, in the event GOJ nonresponsiveness (thus far) to 
concluding an Article 98 agreement should lead to a reduction 
in certain military assistance from the USG.  From the GOJ's 
perspective, the meat of the trade delegation's visit can be 
found in the agreements concluded under its auspices.  Still, 
the GOJ's failure to match its lofty rhetoric about fostering 
"trade partnerships" with at least a respectable number of 
visitors to the fair itself, spoke volumes about Jamaica's 
current readiness to make the most of trade ties with China. 
The GOJ is seeking to expand its export market and ensure 
that it has a leading and secure port facility in the 
hemisphere as well as increased capacity in its commercial 
free zone facilities, factors which will tie in with 
Jamaica's growing economic relationship with the PRC. 
TIGHE