VZCZCXRO6131
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0191/01 0441426
ZNR UUUUU ZZH
R 131426Z FEB 07
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 6858
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP  0154

UNCLAS SECTION 01 OF 02 MAPUTO 000191 
 
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SENSITIVE 
 
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MCC FOR SGAULL 
USAID FOR AFR/SA 
 
E.O. 12958: N/A 
TAGS: PREL PGOV CH MZ
SUBJECT: Chinese President Hu Makes 24-hour Visit to 
Mozambique 
 
MAPUTO 00000191  001.2 OF 002 
 
 
Sensitive But Unclassified - Handle Accordingly 
 
¶1. (U) Summary: Chinese President Hu Jintao stopped by for 
an overnight in Maputo February 8/9 before departing for the 
Seychelles, the final leg of his two-week Africa tour.  In 
remarks to government officials, both Hu and Mozambican 
President Guebuza praised the two countries' "profound 
friendship" and longstanding warm relations.  Hu's stay 
produced a bundle of agreements totaling some $230 million 
in Chinese assistance - mainly in the form of technical 
assistance and concessionary loans spread over several 
years.  Just what the Chinese gained in return is not clear, 
apart from more influence and opportunities for a growing 
number of Chinese businessmen looking for deals in offshore 
fishing, agriculture, timber, infrastructure and 
Mozambique's hydro-electric sector.  End summary. 
 
¶2. (U) Hu and his entourage met with their Mozambican 
government counterparts and members of the ruling party in 
the Chinese-built National Assembly building.  However, the 
GRM would not reveal Hu's schedule in advance, and he held 
no press conference.  Despite extensive press coverage in 
the days before his arrival, the visit was far more a 
private than a public affair. 
 
¶3. (U) According to press reports, the Chinese pledged to 
provide Mozambique the following: 
 
-- debt forgiveness on $20 million in past loans; 
 
-- $40 million in new Chinese Eximbank loans; 
 
-- $15 million for a new national outdoor sports stadium; 
 
-- $120 million in "concessionary" loans for businesses in 
2007-2009; 
 
-- duty-free import privileges for a wide range of 
Mozambican products; 
 
-- technical and vocational training and assistance in 
agriculture, and training for 100 Mozambicans in China. 
 
Prime Minister Diogo, in thanking the Chinese for their 
assistance, praised China for offering aid "without 
conditions." 
 
¶4. (U) Very little was mentioned about what the Chinese 
received in return.  Prime Minister Diogo, speaking to a 
gathering of Chinese businessman, said, vaguely, that 
opportunities would be provided them in agriculture, hydro- 
electrical work and on infrastructure projects.  Comment: 
We, and other diplomats in town, suspect that the Chinese 
are developing agro-business schemes for the Zambezi river 
valley.  The local press every several months carries 
stories about prospective Chinese investment along the 
Zambezi, sometimes linking Chinese deals to plans for the 
building of another dam below Cahora Bassa dam at Mpanda 
N'cua (for which the Chinese, in 2006, pledged a $2 billion 
Chinese Eximbank loan).  End Comment. 
 
¶5. (U) Local commentators have expressed mixed views about 
China's growing presence.  In the week prior to the visit, 
several independent media profiled an NGO-sponsored report, 
actually released back in 2005, titled "Chinese Take Away," 
decrying the Chinese exploitation of Mozambique's valuable 
timber in central Zambezia province; weekly paper Savana 
dedicated its front page and inside stories to the report. 
Several papers dedicated their editorials to China, 
deploring Chinese employers' treatment of Mozambican 
workers.  Other writers, however, expressed gratitude for 
Chinese increased assistance and emphasized the benefits of 
Chinese friendship for Mozambique that stretches back to the 
independence struggle before 1975.  (Note: A senior official 
at the Ministry of Foreign Affairs told us last week that 
the ruling party had a longstanding debt of gratitude to 
China because China had supplied Mozambican independence 
fighters, operating out of Tanzania, with weapons in the 
late 1960's and early 1970's.  End note.) 
 
¶6. (SBU) Comment:  Officially, bilateral trade between China 
and Mozambique was approximately $200 million in 2006.  It 
may have been worth much more than this - Chinese fishing 
vessels (and others) are thought to be pillaging the marine 
fishery off Mozambique's coast and Chinese businesses are 
believed to be heavily involved in illegally logging 
 
MAPUTO 00000191  002.2 OF 002 
 
 
Mozambican hardwoods.  In his speech, Hu characterized 
relations between both countries as based on "pragmatic 
cooperation," which suggests to us that Chinese assistance 
comes with strings attached. 
 
Dudley