US embassy cable - 05DHAKA1707

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 001707 
 
SIPDIS 
 
E.O. 12958: DECL: 04/11/2015 
TAGS: PREL, ENRG, ETRD, CH, BG 
SUBJECT: CHINESE PM'S VISIT REAFFIRMS STRONG BILATERAL TIES 
 
 
Classified By: P/E Counselor D.C. McCullough, reasons 1.4 b, d. 
 
1. (C) SUMMARY: The Chinese premier's two-day visit to Dhaka 
ended with a joint communiqu, nine accords, and renewed 
bilateral warmth after last year's tiff over the now-closed 
Taiwan trade office.  The commercial payoff appears to be 
modest, in part because Bangladesh's economy is increasingly 
diversified and private-sector oriented.  BDG officials 
welcomed the visit as a counter to Indian pressure on water 
and other issues.  END SUMMARY 
 
ECONOMIC AGREEMENTS 
------------------- 
 
2. (SBU) On April 7-8, PRC Premier Wen Jiabao visited Dhaka 
to commemorate the 30th anniversary of Sino-Bangladeshi 
relations.  He met with Government, business, and civil 
society leaders, including Awami League President Sheikh 
Hasina, to reaffirm China's commitment to a broad bilateral 
partnership.  The nine accords signed during the visit 
include five agreements, two MOUs, a telecom contract, and an 
exchange of letters on economic and technical cooperation, 
agriculture, the Chinese Baropukuria coal mine venture, water 
management, and the start of direct commercial flights 
between Dhaka and Kunming.  Bangladesh runs a huge trade 
deficit with China, exporting only $46 million in a nearly $2 
billion trade relationship, but when Bangladeshis pressed for 
more concessions, Wen replied that "China is also a poor 
developing country." 
 
3. (C) On April 11, Chinese Embassy Econ/Commercial Second 
Secretary Sucai Yang told poloff that the most significant 
 
SIPDIS 
agreements were a dollar equivalent 1.5 million project 
support grant and the dollar equivalent 30.2 million 
concessional loan for the construction of a di-aluminum 
phosphate (DAP) plant in Chittagong.  The other accords, he 
said, were "just frameworks" for future hopes, particularly 
the cooperation agreement on peaceful uses of nuclear energy. 
 He anticipated slow progress in drawing down China's 
long-term concessional credits for installing digital 
telephone exchanges in metropolitan cities and other locales 
and the new agreement to provide 500,000 landlines because of 
differences among the Prime Minister's Office, the Bangladesh 
Telecommunications Regulatory Commission, and the Bangladesh 
Telegraph and Telecom Board. 
 
POLITICS PREDOMINATE 
-------------------- 
 
4. (C) The visit was more significant for Bangladesh 
politically than economically, BDG officials stated.  On 
April 10, PMO Principal Secretary Kamaluddin Siddiqui 
downplayed to visiting SA DAS Gastright the BDG,s interest 
in Chinese supplier credits by noting that Bangladesh has 
alternative sources of financing from the IFIs and that "we 
don't want to be dependent on only their goods--we want the 
best goods possible."   Foreign Secretary Hemayetuddin 
separately told Gastright that the Wen visit reaffirmed a 
strong Sino-Bangladeshi relationship and the BDG,s one-China 
policy after last year's tiff over the briefly opened Taiwan 
trade office.  (Note: The BDG decided to allow the trade 
office after the reported payment of a substantial bribe to 
the Prime Minister's son and heir apparent, Tariq Rahman.) 
"Bangladesh opposes Taiwan's membership in any international 
and regional organizations open to sovereign countries only 
and fully supports China's peaceful reunification," the BDG 
publicly stated. 
 
5. (C) Siddiqui welcomed the "very successful" visit as 
balance to alleged pressure from India on water and other 
issues, and highlighted language in the joint communiqu 
asserting that water disputes should not be settled 
unilaterally.   "We need China when our big neighbor tries to 
bully us," he said.  Longtime China watcher and senior 
diplomatic correspondent Amir Khasru speculated to poloff 
that China's interest in Bangladesh partly stems from concern 
about India regional power aspirations.  A joint agreement to 
build a road through Burma serves a dual strategic and 
commercial purpose, he said.  Khasru claimed there was an 
unpublicized agreement to sell seven Chinese military 
aircraft (NFI) to Bangladesh (Note: We have no information to 
corroborate this claim). 
 
6. (C) Ruling-BNP MP Akmal Yusuf, and member of Parliament's 
MFA Standing Committee, told poloff the BDG continues to 
pursue its "Look Asia" policy for strategic and commercial 
reasons, in part to deflect pressure from India and to make 
Bangladesh less vulnerable to Western pressure on human 
rights and governance issues.  Yusuf put into this context PM 
Zia's recent trip to Singapore and the BDG's request for 
Chinese support to join the Asean Regional Forum (ARF). 
 
Comment 
------- 
 
7. (C) Wen is the most important head of government to visit 
Bangladesh since his predecessor came in 2002.  Bangladeshi 
satisfaction with the visit was heightened by the fact it was 
seen to refute the Indian claim that Dhaka was too insecure 
to hold the SAARC summit as scheduled. 
THOMAS