US embassy cable - 05RANGOON1248

C O N F I D E N T I A L RANGOON 001248 
 
SIPDIS 
 
STATE FOR EAP/MLS; PACOM FOR FPA 
 
E.O. 12958: DECL: 10/18/2015 
TAGS: ECON, ETRD, PREL, PGOV, EFIN, BM, CM, Economy 
SUBJECT: BURMA AND CHINA MAKE ECONOMIC DEALS AT NANNING EXPO 
 
REF: A. RANGOON 1073 
 
     B. 2004 RANGOON 1014 
 
Classified By: Econoff TLManlowe for Reasons 1.4 (b,d) 
 
1. (C) Summary: At the second China-ASEAN Business and 
Investment Summit and Expo in Nanning on October 18-20, 2005, 
the governments of Burma and China signed a framework 
agreement for a concessional 1 billion yuan ($124 million) 
loan to finance a fertilizer plant near Rangoon.  The Myanmar 
Chamber of Commerce and Industry reportedly signed over $140 
million in sales contracts with Chinese traders at the same 
event.  The summit highlighted China's increasing trade with 
Burma, and the loan agreement further strengthened China's 
financial support of Burma's economy.  End summary. 
 
2. (SBU) Prime Minister General Soe Win led the Burmese 
delegation to the second annual China-ASEAN Business and 
Investment Summit and Expo on October 18-20 in Nanning, in 
Guangxi Zhuang Autonomous Region.  At the Expo, Burma's 
Economic Minister U Soe Tha and Chinese Commerce Minister Bo 
Xilai signed a framework agreement for a one billion yuan 
($124 million) concessional loan.  The Export-Import Bank of 
China will provide the 15-year funds at 2% interest for a 
fertilizer factory located near Rangoon. 
 
At The Summit: PM Highlights Bilateral Trade 
-------------------------------------------- 
3. (U) Prime Minister General Soe Win was one of the highest 
ranking officials at the event, which also included the Lao 
Vice President and the Thai Deputy Prime Minister.  In his 
opening speech, the PM noted that China is now Burma's second 
largest trading partner after Thailand, accounting for almost 
14% of Burma's exports (Note: The GOB Central Statistics 
Organization says it is really about 10%. End note).  Over 
25% of Burma's imports come from China.  Soe Win expressed 
confidence that Burma and China will reach their goal of $1.5 
billion in bilateral trade this year.  Observing that Burma's 
hydroelectric, oil and gas sectors are the most attractive 
for Chinese investment, the PM expressed hopes that 
manufacturing will also interest Chinese investors.  The PM 
noted successful bilateral efforts to normalize border trade 
between the two nations (Ref A). 
 
At the Expo: Burma Gets Export Orders 
------------------------------------- 
3. (U)  The Burmese delegation included over 100 business 
reps, who reportedly signed over $140 million in sales 
contracts with Chinese traders.  According to the Myanmar 
Chamber of Commerce and Industry (MCCI), agreements were made 
primarily for the export of Burmese gems and jewelry, seafood 
and agricultural products.  The MCCI also signed a MOU on 
cooperation with the China General Chamber of Industry and 
Commerce.  The team of 28 Burmese companies won the "Best 
Exhibition Award" at the Expo. 
 
4. (C) Comment: That Prime Minister General Soe Win led the 
delegation underscores the importance of Burma-China economic 
relations, to Burma, at least.  Former PM Khin Nyunt also 
focused heavily on economic deal making during his frequent 
trips to China (Ref B).  The PM's statements reflected the 
GOB's continuing efforts to raise revenue from increased 
trade and investment from China and from border trade 
"normalization."  The PM's attendance at the expo also gave 
him an opportunity to see how far Burma lags behind its 
neighbors: in his public statements, he noted (certainly with 
some envy) Guangxi's significant economic development over 
the past year.  End comment. 
VILLAROSA