VZCZCXRO4425
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #5176/01 2200926
ZNR UUUUU ZZH
R 080926Z AUG 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 0569
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RHEHNSC/NSC WASHDC
RUEHFR/AMEMBASSY PARIS 4151
RUEHKO/AMEMBASSY TOKYO 1518
RUCNDT/USMISSION USUN NEW YORK 1799

UNCLAS SECTION 01 OF 02 BEIJING 005176 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
TOKYO FOR USAID AANENSON 
STATE FOR EAP/CM AND EB/IFD/OMA 
STATE FOR EAP/EP, AF/EPS, NEA/RA, WHA/EPSC 
TREASURY FOR DEPUTY CHIEF OF STAFF TAIYA SMITH AND OASIA/ISA 
DOHNER/YANG/CUSHMAN 
STATE PASS TO USAID FOR NICHOLSON 
BANGKOK FOR USAID/RDMA CARDUNER AND WHELDEN 
PARIS FOR USOECD 
MANILA FOR ADB USED 
NSC FOR SHRIER, TONG 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN EAID CH
SUBJECT: INFORMAL FOREIGN AID DISCUSSIONS CONTINUE 
 
REF: BEIJING 3587 and previous 
 
SUMMARY 
------- 
 
¶1. (SBU) A Ministry of Commerce (MOFCOM) official responsible for 
foreign aid told a visiting USAID official that the Chinese 
Government would welcome efforts by the United States to cooperate 
with China on economic development initiatives.  The August 2 
meeting followed a positive exchange with a Treasury official in May 
after a long period of reluctance on MOFCOM's part to discuss 
foreign aid issues (reftel).  According to the MOFCOM 
representative, the Chinese Government is interested in bilateral 
cooperation on development work in Africa, and the United States 
Government and China should begin to discuss possible projects for 
cooperation.  Separately, Chinese press reports also indicate that 
the China Development Bank (CDB) has increased its stake in Africa 
through the launch of the new China-Africa Development Fund.  END 
SUMMARY. 
 
MORE POSITIVE SIGNS ON DEVELOPMENT COOPERATION 
--------------------------------------------- - 
 
¶2. (SBU) Charles Aanenson, Counselor for Development Cooperation, 
Embassy Tokyo, followed up on the May 8-9 visit of Deputy Assistant 
Secretary of Treasury Kenneth Peel (reftel) to further encourage 
 
SIPDIS 
Chinese government officials to cooperate on development assistance 
with the United States.  Liu Junfeng, Director, Department of Aid to 
Foreign Countries, Ministry of Commerce (MOFCOM), said he is 
optimistic about future cooperation and expressed his appreciation 
for Aanenson's overview of development cooperation between the 
United States and Japan.  (Note:  Prior to the Peel meeting in May, 
MOFCOM's Department of Aid to Foreign Countries routinely refused 
Embassy requests for meetings.  Liu Junfeng, who also participated 
in Peel's May 9 meeting with the Department's Director General, Wang 
Shichun, met with Aanenson in place of Wang, who was traveling on 
August 2.  End Note.) 
 
USAID'S COOPERATION WITH JAPAN 
------------------------------ 
 
¶3. (SBU) Aanenson explained to Liu that his office's role in Tokyo 
is to develop bilateral cooperation projects with Japanese aid 
agencies and to avoid duplication of work in the developing world. 
While Japan's economic assistance strength is its yen loan program, 
the United States' strength is technical assistance.  The United 
States Government is eager to learn if it can forge a similar 
partnership with China, Aanenson said. 
 
OPPORTUNITIES IN AFRICA 
----------------------- 
 
¶4. (SBU) Liu thanked Aanenson for his overview of the United States' 
development cooperation with Japan, and he reiterated China's 
foreign aid priorities as stated by Wang in the May 9 meeting 
(reftel).  Liu pointed to Africa as a region where development 
cooperation between the United States and China might be most 
effective, as China's advantages with regard to strong bilateral 
relations and low project costs could be partnered with technical 
assistance from the United States.  Liu said that China and the 
United States should further explore possible cooperation in Africa 
and begin to identify specific projects and perhaps propose 
feasibility studies to recipient countries.  Liu offered the caveat 
that such cooperation would of course be subject to the agreement of 
the recipient country.  He asked Aanenson to provide a list of 
specific countries and specific projects as examples of possible 
cooperative ventures, saying he would discuss the idea further with 
his superiors. 
 
NOTE:  MORE ON AFRICA 
--------------------- 
 
¶5. (SBU) According to Liu, 48 countries in Africa have accepted ODA 
from China to date, but the number of projects is not very large. 
 
BEIJING 00005176  002 OF 002 
 
 
He reemphasized a point Wang made previously that MOFCOM is under a 
tremendous amount of pressure to deliver aid to Africa following the 
November 2006 China-Africa Forum.  A July 26 Caijing magazine 
article reported that the China Development Bank launched the 
China-Africa Development Fund in June with an initial investment of 
USD 1 billion and a goal of reaching USD 5 billion.  In doing so, 
CDB broadened the scope of its international outreach, which CDB 
officials had highlighted to Peel in May (reftel).  END NOTE. 
 
RANDT