VZCZCXRO3388
RR RUEHCN RUEHMR RUEHPA RUEHRN RUEHVC
DE RUEHGH #7122/01 3470104
ZNY CCCCC ZZH
R 130104Z DEC 06
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 5355
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0001
RUEHGH/AMCONSUL SHANGHAI 5683

C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 007122 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/CM 
NSC FOR WILDER 
 
E.O. 12958: DECL:  12/13/2016 
TAGS: PREL PGOV CH
SUBJECT: CSIS ROUNDTABLE ON CHINA-AFRICA 
 
SHANGHAI 00007122  001.2 OF 004 
 
 
CLASSIFIED BY: Mary Tarnowka, Chief, Political/Economic Section 
, U.S. Consulate Shanghai. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (C) Summary:  During a December 1 discussion between members 
of the Johns Hopkins Center for Strategic International Studies 
(CSIS) and Shanghai scholars, and representatives from BHP 
Billiton and other Shanghai-based economic consulting firms, 
participants disagreed about the impact of China's increased 
involvement in Africa.  CSIS delegation members noted that there 
was a great deal of exuberance about Africa in Beijing, but 
questioned whether China was prepared to deal with Africa's 
problems.  CSIS delegates noted that Chinese officials did not 
appreciate the role of NGOs and ignored the issue of human 
rights, and seemed oblivious to the negative impact of Chinese 
trade and investment on the local population.  Shanghai 
participants noted the allure of the China development model for 
African countries and said China was trying to play a positive 
role in the region.  Shanghai scholars said while China's 
involvement in Africa was currently focused on energy issues, it 
would become more pro-active on human rights in the future.  End 
Summary. 
 
 
 
¶2.  (SBU) A delegation from CSIS provided a briefing on their 
recent trip to Beijing to Shanghai scholars, and representatives 
from BHP Billiton and other Shanghai-based economic consulting 
firms at a round-table organized by Australian-headquartered 
global resource company BHP Billiton on December 1.  The 
delegation had participated in a conference on China in Africa 
sponsored by the Ministry of Foreign Affairs and the China 
Institute for International Studies on the margins of the 
China-Africa Development Forum in Beijing and had met with a 
number of Chinese African experts earlier that week.  The 
delegation consisted of representatives from prominent NGOs, 
academia, and businesses, including International Republican 
Institute President Lorne Craner, Oxfam America President 
Raymond Offenshesier, National Defense University Senior Vice 
President and Former U.S. Ambassador to Kenya William M. 
Bellamy, Manchester Trade Ltd. Vice President Anthony Caroll, 
CSIS Africa Program Director J. Stephen Morrison, and CSIS 
Freeman Chair in China Studies Bates Gill. 
 
 
 
----------------------- 
 
Exuberant Interlocutors 
 
----------------------- 
 
 
 
¶3.  (C) According to Morrison, the delegation arrived in Beijing 
just three weeks after the China-Africa Summit and interlocutors 
showed a great deal of exuberance and had a certain romanticism 
about Africa.  Interlocutors repeated over and over again the 
same talking points when discussing China's relationship with 
African countries.  First, China and its development model were 
very alluring to Africa.  China was able to transform itself 
from a chaotic, poor country into a developed, stable country. 
China also had a legacy of solidarity with African nations and 
had never been involved in a conflict in Africa.  In addition, 
China's non-interference policy meant that it provided 
assistance with no strings attached.  This was in contrast to 
Western countries which were too developed and had been involved 
in conflicts in Africa. 
 
 
 
¶4.  (C) Interlocutors also stressed that the recent summit was 
the most important China-Africa summit since these summits were 
launched in 2000.  This summit cemented the relationship. 
Chinese experts also stressed that Africa itself had crossed a 
threshold and was now in a period of enduring stability.  While 
interlocutors acknowledged that there were cultural and language 
problems, they were upbeat overall about the relationship and 
the prospects for future cooperation. 
 
 
 
--------- 
 
Problems? 
 
SHANGHAI 00007122  002.2 OF 004 
 
 
 
--------- 
 
 
 
¶5.  (C) According to Morrison, delegation members were concerned 
with several aspects of their discussions.  First, Chinese 
interlocutors seemed to have a simplistic view of African public 
opinion.  According to the interlocutors, everyone in Africa 
loved China and there was no differentiation in the opinions of 
African people.  This did not seem genuine.  Later in the 
conversation, Manchester Trade Ltd. Vice President Anthony 
Carroll said he had talked to many African trade ministers who 
often complained that China was flooding the African markets 
with counterfeit textiles.  This had caused the textile sector 
to collapse and hurt domestic cotton production.  African trade 
ministers told him that they did not raise this issue with their 
Chinese counterparts because they did not want to anger China. 
They believed China was a potentially valuable economic ally and 
were looking past these irritants to maintain the relationship. 
 
 
 
¶6.  (C)  Second, there was a great absence of data about how 
projects would be implemented.  Interlocutors could not provide 
detailed information on targets for cooperation, where the money 
would go, or the priorities for cooperation.  Third, China did 
not appear to be prepared to deal with any future conflict. 
Although Africa was currently in a period of stability, this 
stability needed to be consolidated and the situation could 
quickly deteriorate.  At a later point in the conversation, 
Craner noted that by the second day of discussions, 
interlocutors appeared to realize that China would encounter 
problems in Africa in the future and were more open about 
discussing how to deal with them. 
 
 
 
¶7.  (C) Fourth, delegation members, many of whom came from NGOs, 
were disappointed with Chinese interlocutors' lack of knowledge 
about NGOs or civil society.  Oxfam America President 
Offenhesier said it was hard to have discussions with Chinese 
officials about NGOs as they did not have a "common vocabulary." 
 A delegate from the Open Society Policy Center noted that 
Chinese interlocutors only discussed issues from the government 
perspective.  To resolve problems in Africa, there needed to be 
people from all sectors at the table.  Delegates noted the 
reluctance of interlocutors to discuss human rights and Craner 
said it was clear that China's Africa policy was dominated by 
strategic considerations. 
 
 
 
¶8.  (C) Fifth, Morrison said it was unclear whether the Chinese 
government was coordinating the actions of its companies or was 
aware of the damage the companies were causing through corrupt 
business practices, and lack of adherence to international labor 
and environmental standards.  A business sector delegate said 
that there appeared to be competition among these companies for 
resources in Africa and it was not clear if there was any 
coordination.  There needed to be more transparency in this 
area.  He was also concerned that interlocutors did not have an 
appetite to discuss how to deal with conflicts if they broke 
out.  Chinese companies would likely face the same problems as 
Western companies who have had to deal with civil violence and 
attacks on their installations. 
 
 
 
¶9.  (C) Some delegation members noted that there was a lack of 
understanding by PRC companies of the concept of Corporate 
Social Responsibility (CSR).  During the delegation's meeting 
with a CNOOC Vice President, the Vice President said CNOOC 
aspired to be an international, globally responsible company. 
However, when the delegation pushed him on this issue, he could 
not provide a clear definition on what this meant.  According to 
Carroll, the Chinese government was vulnerable to criticism 
because of the rapacious business practices of some Chinese 
companies and needed to be more active in supervising these 
companies. 
 
 
 
------------------------------- 
 
China Model Suitable for Africa 
 
 
SHANGHAI 00007122  003 OF 004 
 
 
------------------------------- 
 
 
 
¶10.  (C) BHP Billiton China President Clinton Dines said that 
the Chinese development model was indeed alluring, and, perhaps, 
more relevant then the Western model to African countries. 
Chinese companies and the government were very proud of their 
model and had no doubts that China would continue to expand.  In 
addition, Chinese companies were able to build factories and 
goods very cheaply.  While these products might not be better 
then Western products, their price made them suitable for 
developing country consumers.  For example, a Chinese company 
could build a factory at a third of the price and twice as 
quickly then a company like BHP Billiton.  While the factory 
might not have all of the "bells and whistles" of a BHP Billiton 
factory, it would be able to get the job done.  Dines added that 
frankly, Western involvement in Africa had been undistinguished 
and it was understandable for African nations to want an 
alternative model. 
 
 
 
¶11.  (C) According to CLSA China Macro Strategist Andy Rothman, 
China's Africa policy was not solely driven by strategic 
considerations, since there were real commercial interests in 
Africa.  In particular, Chinese companies were interested in 
becoming global players and looked to places like Africa and 
Venezuela as attractive places to invest.  Unlike Western 
countries, African countries welcomed Chinese investment.  He 
noted that the Chinese government had also become savvier about 
monitoring companies investing overseas.  The government 
provided many of these companies with loans to go abroad.  In 
the past, there were few repercussions for companies who 
defaulted on loans.  Now, if a company defaulted on a loan, the 
government would no longer lend to it.  Finally, the Chinese 
government's involvement in Africa was driven, in part, by its 
desire to become a responsible stakeholder.  It was trying to 
improve relations with all of its neighbors and saw Africa as a 
place where it could demonstrate that its policies were 
constructive. 
 
 
 
¶14.  (C) Paul French, an analyst from Access Asia, added that 
some Chinese companies did understand CSR and were taking on 
some CSR concepts.  He said as Chinese companies became more 
global, they began to pay more attention to their images.  These 
companies understood that consumers did not want to buy products 
from a company that had bad business practices.  Therefore, some 
companies such as Haier had become increasingly involved in 
charities and paid attention to environmental issues. 
 
 
 
--------------------------------------------- - 
 
Shanghai Scholars: Energy Needs Driving Policy 
 
--------------------------------------------- - 
 
 
 
¶15.  (C) Shanghai Scholars noted the important role played by 
African nations in the UN.  Jiaotong University Center for 
Rim-Pac Studies Vice Director Zhuang Jianzhong said that China 
owed Africa because many African countries supported its bid to 
become a member of the UN.  Fudan Center for American Studies 
President Shen Dingli added that African votes were needed to 
defeat attempts by Taiwan to join the UN General Assembly and 
were critical in overcoming Japan's attempts to become a 
permanent member of the UN Security Council.  Both scholars 
touched on human rights issues.  Zhuang said China still viewed 
the world as a state-based system and therefore was reluctant to 
interfere in other countries' affairs.  For example, China had 
not interfered in Darfur because the Sudanese government opposed 
international intervention.  He added that China also believed 
that every country had its own democratic process and agenda 
which should not be decided by outside countries. 
 
 
 
¶16.  (C) Shen said that, for the present, China was focused on 
its own economic development and cared less about value-added 
international relations issues such as human rights.  China 
needed energy resources to sustain its growth and for this 
reason countries such as Angola and Sudan had become very 
 
SHANGHAI 00007122  004.2 OF 004 
 
 
important.  China did care about human rights and, in the long 
term, would become more active in this area.  Shen added that 
this mercantilist attitude had led some African countries to 
criticize Beijing for implementing a "new colonialism."  Shen 
said that this was an important message and China needed to 
improve its Africa policy.  First, while China still believed in 
non-interference, it had been active in encouraging African 
nations to act responsibly.  For example, during the 
China-Africa Summit, President Hu Jintao had a one-hour meeting 
with the President of Sudan on the domestic situation in the 
country.  Second, the government had strengthened its 
supervision of Chinese companies in the region.  If a company 
embarrassed the Chinese government, then the government would 
become involved to try to correct the situation.  Finally, the 
Chinese government understood that it could not just exploit 
African countries, but also needed to help these countries 
develop their economies. 
 
 
 
¶17.  (C) A BHP Billiton Chinese-national analyst criticized the 
delegation as being too U.S. centered and asked why the 
U.S.-China relationship should dominate the China-Africa 
relationship.  Africa could be the next largest market for 
Chinese consumer goods and China could help Africa to develop 
quicker and better than could the West.  He added that China was 
still in the process of developing and improving its own human 
rights.  It was not qualified nor did it desire to teach Africa 
any human rights lessons.  Human rights should not be a 
pre-condition to development.  Another BHP Billiton 
Chinese-national analyst said that there was no need to panic 
about Chinese companies.  These companies had just begun to 
invest in Africa and it was too early to determine what effect 
they were having on African countries. 
JARRETT