US embassy cable - 05DJIBOUTI995

C O N F I D E N T I A L SECTION 01 OF 02 DJIBOUTI 000995 
 
SIPDIS 
 
STATE FOR AF PDAS MICHAEL RANNEBERGER; STATE ALSO FOR AF/E 
AND AF/RSA; 
LONDON, PARIS FOR AFRICA WATCHER 
 
E.O. 12958: DECL: 10/03/2015 
TAGS: PREL, ECON, ETRD, EFIN, EMIN, EINV, ENRG, ETTC, PHUM, SENV, AF, CH, DJ 
SUBJECT: CHINA'S INFLUENCE IN DJIBOUTI 
 
REF: STATE 153199 
 
Classified By: Pol/Econ Erinn C. Stott for reasons 1.4 (b) and (d). 
 
1. (C) The Republic of Djibouti and the People's Republic of 
China have had diplomatic relations for 26 of the 28 years 
Djibouti has been independent. Over those 26 years, China has 
given a substantial amount of aid to Djibouti in the form of 
loans, grants, building projects and cooperative trade 
agreements. The Chinese influence in Djibouti is nowhere near 
as strong as the French or the U.S. influence, but it is 
visible, continuous and growing. Chinese influence is 
prevalent in both private and public sector projects. On the 
government-government level, each year in July/August the 
Chinese government invites officials from different 
departments of the Djiboutian Government for a 15-day tour in 
China. Travel and accommodations are paid for by the Chinese 
government. To Post's knowledge, members of the Defense 
Ministry, Parliament, the Presidency, and the Ministry of 
Foreign Affairs have visited China on these trips. 
 
2. (U) Prime Minister Dileita Mohamed Dileita recently 
concluded a 6-day visit to China that took him and his 
delegation to Beijing, Shanghai and Xian. He described 
Djibouti-China relations as excellent and exemplary in a 
recent interview with the State-run newspaper, La Nation. He 
said over the past 26 years relations had been developed 
under a sign of confidence and could be characterized by 
depth, vitality and concrete accomplishments. Since President 
Guelleh's visit in 2001, China has given not only 
non-reimbursable financing and implementation of projects but 
technical assistance in the area of health, youth, sports and 
professional training of Djibouti's workers. Dileita 
described the economic partnership between China and Djibouti 
as equally of large growth, including the Chinese company ZTE 
equipping Djibouti Telecom over the last few years through a 
project totaling $10 million dollars. Djibouti has also had 
talks with the Shanghai port authorities. 
 
3. (U) Dileita further commented that his 6-day visit was 
centered around reinforcing political dialogue and 
cooperation between Djibouti and China. Minister of 
International Cooperation in the Ministry of Foreign Affairs, 
Hawa Ahmed Youssouf, presided over the signing of an 
agreement giving Djibouti a 440 million Djibouti Franc 
(nearly $2.5 million dollars) grant for development projects. 
 
4. (U) During Dileita's visit, Djiboutian and Chinese 
officials agreed to maintain and augment economic cooperation 
with assurances that the Chinese government will continue to 
give financial aid for development projects, encourage and 
favor commercial exchanges and the importation of Chinese 
products, increase the number of high-level visits between 
China and Djibouti, and expand and intensify cooperation and 
visits between political parties, parliaments, chambers of 
commerce, media and other associations. Dileita also 
discussed Chinese financing and construction of a road in the 
Northern districts of Tadjourah and Obock. Also discussed 
were international and regional issues such as IGAD's role in 
Somalia. Djibouti also renewed its commitment to support 
China at the United Nations and pursue its one-China policy. 
 
5. (U) Dileita also reportedly had meetings with the Chinese 
Company, Hurricane Technologies, regarding a desalination 
project. Dileita said in the coming months Djibouti's Office 
National des Eaux (ONED) will discuss ultimate steps needed 
to advance the project, specifically financing. Dileita also 
met with the Chinese company, Huawei Technologies, where he 
visited their training center and discussed the possibility 
of assistance in reinforcing the infrastructure of Djibouti 
Telecom. Huawei Technologies has been invited the company to 
visit Djibouti and meet with the Djibouti Telecom officials. 
 
6. (C) During President Guelleh's 2001 visit to China, 
accompanied by a large delegation of Djiboutian business 
owners, the Djiboutian Chamber of Commerce and the Chinese 
Chamber of Commerce signed a cooperation and trade agreement. 
While this agreement did not result in concrete cooperation 
between the two Chambers of Commerce, it produced business 
ties on individual levels. Mr. Gamil Abdoulkarim Ali, who 
heads the Al Gamil group - one of Djibouti's largest 
importers, and who accompanied President Guelleh in 2001, was 
able to establish ties with several Chinese counterparts. He 
now imports cars and a wide variety of products from China. 
 
7. (C) In January 2005, the Chinese Government agreed to 
offer tax exemption for 190 different commodities to 25 least 
developed African countries, including Djibouti. This tax 
exemption is similar to the USG AGOA program and is aimed at 
helping African countries develop their economies. Djibouti 
has not taken advantage of this opportunity to date because 
of a lack of products to export. Recent statistics show that 
the Government of Djibouti imported from China $1.53 million 
dollars in 2001, $1.14 million in 2002 and $1.33 million in 
2003. Imported commodities for 2003 were mainly chemical 
products, textiles, shoes and equipment. There are also 
several Chinese companies present in Djibouti, mainly in the 
construction industry. 
 
Past Projects with the Government of China 
------------------------------------------ 
8. (C) Below is a list of projects paid for by the Chinese 
government since the early 1980s. This list does not include 
minor projects, feasibility studies, or renovation costs. 
- 1983-1985 Construction of the Palais du Peuple, a 
convention center in the capital city, financed by a $10 
million dollar loan. 
- 1991-1993 Construction of the Stadium in the capital city, 
financed by an $11 million dollar loan. 
- 1994 A grant for Food Aid totaling $0.5 million dollars. 
- 1996-1998 Construction of 55 social housing units, financed 
by a $2.6 million dollar loan. 
- 1997 Construction of a medical wing for Peltier Hospital in 
the capital city, financed by a grant of $0.45 million 
dollars. 
- 1981 and 2000 Various types of military, sports and 
computer equipment, financed by a grant of $5 million dollars. 
- 2001-2003 Construction of the Ministry of Foreign Affairs, 
financed by a grant of $2.41 million dollars. 
- 2001 China and Djibouti sign an agreement with Djibouti 
Telecom for a fiber optics project, financed by a loan of 
$12.048 million dollars. Expected completion date is 2007. 
- 2003 Donation of sanitation trucks and equipment, financed 
by a grant of $0.678 million dollars. 
- 2004 Construction of an Omnisport Center in Dikhil 
district, financed by a grant of $0.91 million dollars. 
- 2004 Grant of $0.622 million dollars to the Girls' 
Orphanage for the construction of an Art Center. 
- 2004 Donation of education material, financed by a grant of 
$0.120 million dollars 
RAGSDALE