VZCZCXRO6597
PP RUEHCN RUEHMR RUEHPA RUEHRN RUEHTRO RUEHVC
DE RUEHGH #0291/01 1360914
ZNY CCCCC ZZH
P 160914Z MAY 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC PRIORITY 5814
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6214

C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000291 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM, AF 
NSC FOR DENNIS WILDER 
 
E.O. 12958: DECL:  5/16/2017 
TAGS: PREL ECON CH XA
SUBJECT: CHINA HOSTS AFRICAN DEVELOPMENT BANK MEETING 
 
SHANGHAI 00000291  001.2 OF 002 
 
 
CLASSIFIED BY: Simon Schuchat, Deputy Principal Officer ,  , 
U.S. Consulate Shanghai. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (C) Summary. Chinese Premier Wen Jiabao opened the African 
Development Bank (AFDB) 2007 Annual Meetings in Shanghai on May 
16 with a speech that stressed China's sincere commitment to 
helping Africa develop and acknowledged that China needed to 
further implement its own financial sector reforms, including 
greater market-driven exchange rate flexibility.  During an 
AFDB-sponsored ministerial roundtable on May 15, African 
representatives welcomed more Chinese assistance, but cautioned 
that there should be more coordination among African nations to 
ensure that Africa's partnership with China would lead to 
sustainable growth and not just "some holes in the ground and 
jobs in other countries."  This cable reports on Premier Wen 
Jiabao's statements and the interaction between China and 
African nations at the AFDB meetings.  We defer to our 
colleagues at the Treasury Department for reporting on the 
technical and non-China aspects of the meeting.  End Summary. 
 
CHINA COMMITTED TO AFRICA 
-------------------------- 
 
¶2.  (SBU) During the Opening Ceremony of the African Development 
Bank's (AFDB) opening ceremony 2007 Annual Meetings in Shanghai 
on May 16, Chinese Premier Wen Jiabao delivered a speech that 
laying out China's commitment to helping Africa develop. 
Rwandan President Paul Kagame, Cape Verde President Pedro Pires, 
Madagascar President Marc Ravalomanana, and Shanghai Mayor Han 
Zheng also attended the ceremony.  Premier Wen applauded Africa 
for its steady progress in maintaining peace and stability and 
promoting regional cooperation.  He called on the international 
community, in particular developed nations, to take more 
measures to assist Africa, including providing more financial 
assistance, cancel debts, and increase technology transfer. 
 
¶3.  (SBU) Premier Wen noted that China has had a long 
relationship with African nations.  Since it began establishing 
diplomatic relations on the continent five decades ago, China 
has participated in 900 infrastructure and public projects, 
provided 20,000 government scholarships to 50 countries and sent 
16,000 medical personnel to 47 countries to treat 180 million 
people.  It extended zero-tariff treatment to the exports of 
some of the least developed nations and provided market access 
to many African nations.  China also has already cancelled RMB 
10.9 Billion in debt and recently announced additional debt 
relief of RMB 10 Billion. 
 
¶4.  (SBU) Premier Wen stressed that China would fully deliver on 
the commitments made at the China-Africa Forum in Beijing in 
November 2006, which included doubling assistance by 2009 and 
setting up a USD 5 billion fund to finance African countries 
development and support Chinese enterprises in Africa.  At the 
forum, China promised to establish a new type of strategic 
relationship with Africa that emphasized political cooperation, 
a win-win economic relationship, and increasing cultural 
exchanges.  China and Africa needed to do more to explore new 
areas of cooperation.  Government assistance and business 
cooperation should also go "hand-in-hand" with the government 
providing guidance to businesses investing in Africa.  Priority 
for cooperation should be placed on certain areas including 
infrastructure, education, environment, medical, and technical 
cooperation.  In addition, this cooperation should be conducted 
in an open and transparent manner.  Finally, China was "truly 
sincere" in its intentions of helping Africa to obtain 
sustainable development. 
 
CHINA'S ECONOMIC DEVELOPMENT 
---------------------------- 
 
¶5.  (SBU) Premier Wen reported that China's overall economic and 
financial systems were good, but there continued to be problems. 
 China had made significant reforms in the financial sector to 
modernize its banking system and improve the market.  However, 
the economy suffered from a growing imbalance in international 
payments, rapid accumulation of foreign exchange reserves, and 
excessive liquidity.  There needed to be deeper reforms in 
China's financial sector.  In particular, China needed to 
improve the foreign exchange mechanism, giving greater scope to 
the role of the market and introducing greater interest rate 
flexibility. 
 
AFRICAN NATIONS ENTHUSIASTIC, BUT CAUTIOUS 
------------------------------------------ 
 
SHANGHAI 00000291  002.2 OF 002 
 
 
 
¶6.  (C) During the May 15 AFDB Ministerial Roundtable on the 
theme of "Africa and Asia: Partners in Development", African 
representatives were enthusiastic about China's increased 
attention to the continent.  A few speakers from African nations 
said the fact that China was hosting the AFDB meetings was 
evidence of the strength of the relationship between China and 
Africa.  Many spoke about the Asian model of development and 
wondered whether this model was more appropriate for Africa than 
those of Western nations.  A representative from Kenya asked how 
long Africa's orientation towards its former masters would 
continue.  Kenya believed that Africa should look all around to 
the North, East, South and West for assistance. Economist 
Jeffrey Sachs said China had one trillion in foreign reserves 
and a large savings rate.  If China provided even one percent of 
this money to Africa, it would provide Africa with a chance to 
have massive growth. 
 
¶7.  (C) Bank of China Governor Zhou Xiaochuan also participated 
in the roundtable.  He said that Asia and Africa had many 
similarities and common interests which would serve as a base 
for long-term mutually beneficial partnership.  Closer 
China-Africa relations were a part of a greater trend in which 
economic comparative advantages were shifting from the West to 
Asia.  For example, factories that used to be in Japan in the 
1950's, had shifted to South Korea, then to China and now to 
Vietnam.  Perhaps, these factories would move to Africa in the 
future.  Cooperation should be mutually beneficial; China was 
ready to play an even more active part in helping Africa develop. 
 
¶8.  (C) Some African representatives had a rather cautious 
attitude to China's increased attention to Africa.  One 
representative said African nations must enhance cooperation 
among themselves before entering into any cooperative 
relationship with Asia or any other non-African country.  While 
the rapid rise of China and India, provided enormous 
opportunities for sustainable growth, it was also a significant 
threat to Africa.  African countries should adopt a strategic 
approach to this relationship to maximize the positive benefits. 
 A representative from South Africa had a similar view and said 
that African nations must look to themselves to ensure that the 
relationship was mutually beneficial.  Otherwise, African 
nations would just end up with "some holes in the ground and 
jobs in other countries."  Africa needed to develop a regional 
economic community and not negotiate 53 separate agreements with 
countries like China.  His comments garnered a great deal of 
applause from the mostly African audience members. 
 
CONFERENCE ATMOSPHERICS 
----------------------- 
 
¶9.  (C) There were few Chinese participants in the meetings 
attended by Poloff and most of the discussions were technical 
and African-specific. Participants with whom Poloff spoke were 
pleased overall with their Chinese hosts. One member of the U.S. 
delegation told Poloff that this conference was more "pomp and 
ceremony" than other AFDB conferences and appeared to be good PR 
for China. 
 
COMMENT 
------- 
 
¶10.  (C) Premier Wen's presence at the meeting and the fact that 
China agreed to host the meeting are all indications of the 
great importance that China has placed on its relationship with 
Africa.  China is clearly trying its best to woo African 
nations.  Shanghai is China's most developed city and a 
testament to China's development policies and economic strength. 
 African delegates were clearly impressed by the city and took 
note that much of Shanghai's development had taken place in the 
past 15 years. 
JARRETT