US embassy cable - 05COLOMBO813

UNCLAS SECTION 01 OF 02 COLOMBO 000813 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/INS 
PACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, EAID, CH, CE, External Relations 
SUBJECT: TSUNAMI AID AND STATUARY:  CHINESE PREMIER'S VISIT 
HIGH ON OPTICS; THIN ON SUBSTANCE 
 
REF: BEIJING 4272 (NOTAL) 
 
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SUMMARY 
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1.  (SBU) Chinese premier Wen Jiabao's April 8-9 visit here 
yielded some modest tsunami aid and debt relief, mutually 
reinforcing public condemnations of the "evil" of separatism, 
and a new bust of Chou Enlai for a Chinese-built conference 
center in Colombo.  For the Sri Lankans, who face a hefty 
trade deficit and skyrocketing competition in the export 
garment sector from the Chinese, the main "deliverables"" of 
this high-level visit--including a noncommittal statement of 
support for an Asian UN Secretary General and an invitation 
to the President for a visit to Beijing in September--seem 
primarily of symbolic significance.  End summary. 
 
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"SINCERE MUTUAL SUPPORT AND 
EVERLASTING FRIENDSHIP" 
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2.  (U) The April 8-9 official visit to Sri Lanka of Chinese 
premier Wen Jiabao produced--in addition to a flowery 
24-point joint communique proclaiming an "All Round 
Cooperation Partnership Featuring Sincere Mutual Support and 
Everlasting Friendship"--about USD 6 million in grant aid for 
as-yet unidentified projects, a USD 300 million credit line 
for "cooperatioin between Chinese and Sri Lankan 
enterprises," and about USD 34 million in debt relief, 
according to Anura Rajakaruna, Director of East Asia and 
Pacific at the Ministry of Foreign Affairs.  The two 
governments signed a total of six agreements during the 
visit, including a broad agreement to develop economic and 
trade relations, as well as an "Exchange of Letters on the 
Project of Making Sculptures of the Late Leaders" to adorn a 
Chinese-built conference center here.  (The first such 
bust--of Chou Enlai--was unveiled during the visit.)  Besides 
discussions with President Chandrika Kumaratunga, the Chinese 
premier, who was in Sri Lanka for less than 24 hours, met 
with Prime Minister Mahinda Rajapakse, Opposition Leader 
Ranil Wickeremesinghe, and made a brief trip to Panadura, a 
fishing town about 25 km south of Colombo.  The Premier's 
visit, which was only the most recent in a steady stream of 
foreign dignitaries who have visited Sri Lanka since the 
December 26 tsunami, drew relatively modest press coverage. 
 
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ECONOMIC/TRADE RELATIONS 
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3.  (SBU) From Rajakaruna's sparse description of the 
framework Agreement on the Further Development of Bilateral 
Economic and Trade Relationship signed by the two leaders, it 
does not appear that addressing trade disparities between Sri 
Lanka and China is an element of the "Sincere Mutual Support" 
announced in the communique.  Much of the economic 
cooperation envisioned, not surprisingly, appears to focus on 
Chinese enterprises' participation in large infrastructure 
projects.  During the visit an MOU for one such project--the 
development of fuel bunkers for Hambantota Port in 
southeastern Sri Lanka--was signed.  Other possible 
initiatives still under discussion include a sewerage system 
for a Colombo suburb; a phosphate mining/fertilizer venture; 
a coal power project; and the construction of an expressway 
between the capital and the international airport.  (Note: In 
2004 Sri Lanka imported USD 554 million from China, while 
exporting only USD 21 million.  The most significant economic 
threat China poses lies in its greater competitiveness in the 
garment sector, Sri Lanka's largest export.)  Sri Lanka is 
also attempting to encourage tourism from China, Rajakaruna 
noted, although so far no substantial success can be 
reported.  (Note:  China accounted for less than 2 percent of 
all tourist arrivals in 2004.  Sri Lanka's national airline 
is expected to begin flights to Beijing in June.) 
 
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TSUNAMI AID 
 
SIPDIS 
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4.  (SBU) The Chinese government is committed to providing 
"urgent relief work" related to the tsunami, Li Qinfeng, 
Chief of the Political Section, told poloff after the visit. 
Work has already begun to rehabilitate the fishing harbor in 
Panadura in Kalutara District, he said; other projects will 
be identified later.  (According to Rajakaruna, the Chinese 
had pledged approximately USD 18 million in relief for Sri 
Lanka at the tsunami conference in Jakarta.)  The premier was 
personally touched by seeing "the common people" who were 
victimized by the tsunami in Panadura, Li emphasized.  (Note: 
Panadura is a relatively small fishing harbor on the 
outskirts of Colombo that suffered comparatively moderate 
damage during the tsunami. Of the eight districts identified 
as "tsunami-affected," Panadura's home district of Kalutara 
accounts for only about 1 percent of the total fatalities 
island-wide.  Neither the MFA nor the Chinese Embassy could 
give us an estimate of how much money the Chinese would spend 
to rehabilitate the harbor, but our guess is that it cannot 
be very much.  End note.)  In addition, the Chinese Red Cross 
will build a China-Sri Lanka Friendship Village in an 
undesignated location. 
 
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NO SEPARATISM FOR TIGERS, TAIWAN 
--------------------------------- 
 
5.  (SBU) The premier's visit was part of a Chinese "campaign 
to define our relations with friendly countries," Li said, to 
offset "some suspicions" of Chinese aims and objectives among 
its neighbors.  Among South Asian countries in particular, 
bilateral "economic relations were relatively backward 
compared to the political status of relations," Li observed. 
Although the official line is that the Chinese government 
regards Government of Sri Lanka (GSL) efforts toward a 
negotiated settlement with the Liberation Tigers of Tamil 
Eelam (LTTE) as "an internal matter," the joint communique 
condemned the "evils of terrorism, separatism and extremism" 
and reiterated Chinese support for Sri Lankan "sovereignty, 
national unity and territorial integrity."  When poloff asked 
if one could infer from that statement Chinese opposition to 
the Tigers' proposal for an Interim Self-Governing Authority 
(ISGA), Li stonewalled, merely repeating the text of the 
communique.  The Tigers have made no effort to contact the 
Chinese, Li said, or draw them into the debate, although the 
anti-LTTE, pro-Marxist Janatha Vimukthi Peramuna (JVP) has. 
The Embassy enjoys warm relations with the JVP, he added, and 
expressed surprise when poloff told him the Indians had 
sponsored a JVP delegation to visit West Bengal recently.  A 
separate paragraph in the communique reaffirms the GSL's 
specific support for the One China policy and China's 
Anti-Secession Law, along with its categorical opposition to 
"Taiwan independence of whatever form."  (Government media in 
the run-up to the visit was effusive in its support of the 
Anti-Secession Law.) 
 
 
6.  (U)  Although Rajakaruna confirmed that GSL Peace 
Secretariat Head Jayantha Dhanapala's candidacy for UN 
 
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Secretary General was raised during the visit, the GSL was 
 
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apparently able to extract little more from the Chinese than 
an anodyne agreement that "the next Secretary General should 
be from the Asian region."  The premier also extended a 
formal invitation to President Kumaratunga to make a state 
visit after attending the Women's Conference in Beijing in 
September. 
 
ENTWISTLE