VZCZCXRO4135
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHDR #0160/01 0681410
ZNR UUUUU ZZH
R 091410Z MAR 09
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC 8328
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHJB/AMEMBASSY BUJUMBURA 2840
RUEHKM/AMEMBASSY KAMPALA 3361
RUEHLGB/AMEMBASSY KIGALI 1288
RUEHNR/AMEMBASSY NAIROBI 1200
RUEHBJ/AMEMBASSY BEIJING 0354
RUEHDS/USMISSION USAU ADDIS ABABA
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHINGTON DC
RUEHLMC/MCC WASHINGTON DC

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000160 
 
SIPDIS 
 
DEPARTMENT FOR AF/E JLIDDLE; INR/RAA FOR FEHRENREICH; AF/EPS 
STATE PASS USAID/EA, USTDA, USTR 
 
E.O. 12958: N/A 
TAGS: EAID ECON ETRD PGOV PINR PREL TZ CH
SUBJECT: TANZANIA-CHINA RELATIONS REMAIN STRONG DESIPTE GROWING 
CONCERNS 
 
REF: A) 2008 Dar es Salaam 0284; B) 2007 Dar es Salaam 0305; C) Dar 
es Salaam 0153 
 
DAR ES SAL 00000160  001.2 OF 002 
 
 
¶1. Summary: Chinese President Hu Jintao recently made a 36-hour stop 
in Tanzania as part of his five-nation African tour.  The purpose of 
his visit was to solidify bilateral ties by reiterating past 
promises and by offering an additional USD 22 million in aid. 
President Kikwete warmly welcomed President Hu and praised Chinese 
no-strings-attached aid policy.  Although Tanzanians are becoming 
increasingly wary of China's growing footprint and raising questions 
about its motives and the effects of its presence in the Tanzanian 
market, the long bilateral relationship continues to have 
substantial domestic support. 
 
Context: China in Tanzania 
--------------------------- 
¶2. China and Tanzania have maintained strong diplomatic ties since 
Tanzanian independence in 1964, signaled by mutual visits, bilateral 
trade, and Chinese-supported projects in Tanzania (See ref a).  Main 
Chinese-supported projects include: the 1,860 km Tanzania-Zambia 
Railway (Tazara), the Urafiki (Friendship) Textile Mill, and, most 
recently, the brand new USD 56.4 million, 60,000-seat Tanzanian 
National Stadium, for which the Chinese provided just over USD 33 
million.  In 2006, the two countries signed five agreements in which 
China promised assistance in the fight against malaria and agreed to 
help upgrade the TAZARA railway (See ref b).  Tanzania continues to 
be among the top African recipients of Chinese foreign aid. 
 
¶3. Tanzania is at the forefront of the increasing Chinese footprint 
in Africa.  After Angola and South Africa, Tanzania is China's 
third-largest trading partner. In 2005, the total trade volume 
between the two countries was USD 474 million.  By 2007, that number 
had nearly doubled, to approximately USD 800 million.  According to 
Bank of Tanzania figures, in 2005 and 2006 Tanzanian imports from 
China were about 2.5 times its exports.  At least 40 Chinese firms 
are currently investing in Tanzania. 
 
Promises Made 
------------- 
¶4. President Hu was the first Chinese Head of State to visit 
Tanzania.  In a speech delivered at his welcome ceremony in Dar es 
Salaam, Hu called the Sino-Tanzanian relationship a "model for 
China-Africa cooperation" and underscored Chinese commitment to 
actively pursue increased engagement in economic, political, and 
cultural areas.  He noted the "swift" Chinese reaction to the global 
financial crisis and pledged to work to promote development of the 
world economy.  Finally, drawing on a history of exchange programs, 
President Hu invited 50 Tanzanian students to China over the course 
of the next year. 
 
¶5. The Chinese president came to Dar es Salaam with promises of 
assistance as well as expressions of friendship.  He brought a 150 
million yuan (USD 22 million) aid package, twenty percent of which 
is slated for Zanzibar.  Moses Dulle, China desk officer at the 
Tanzania Ministry of Finance, told Econoff after the visit the GOT 
has not yet determined how to use the Chinese assistance.  During 
Hu's visit the two nations also signed a number of bilateral 
agreements, which Dulle said focused mainly on infrastructure and 
the financial sector. 
 
Tanzanian Views: Official and Otherwise 
--------------------------------------- 
¶6. Welcoming President Hu, President Kikwete noted that China has 
quickly become a preferred partner for developing nations because of 
its offers of aid with few strings attached.  Kikwete added that 
Chinese aid policy had no hidden agenda and was based on mutual 
understanding and respect. 
 
¶7. Despite the official welcoming of Chinese aid and laudatory 
comments regarding Chinese involvement in Africa, some locals have 
raised questions about the true intent and real effects of China's 
increasing presence in Africa.  For example, after the visit several 
Tanzanian blogs suggested that the offered Chinese aid was paltry in 
comparison with both the need in Tanzania as well as aid from other 
donors (notably, the USD 698 million Millennium Challenge compact). 
 
¶8. In addition, several editorials used the visit to raise concerns 
that poor quality Chinese goods entering the Tanzanian market are 
undercutting better quality, locally-produced goods and posing real 
 
DAR ES SAL 00000160  002.2 OF 002 
 
 
dangers to the health and well-being of Tanzanians.  The 
editorialists referred to China's well-publicized domestic food 
safety issues as well as problems of counterfeit Chinese products 
entering Tanzania (see ref b on counterfeit chewing gum). 
Tanzania's Fair Competition Commission (FCC) impounded and destroyed 
counterfeit imports, mostly from China and elsewhere in Asia, worth 
USD 1.2 million in 2007. 
 
¶9. Chinese Embassy Chief Economic Representative Liu Yulin told 
Econoff that Tanzania imported lower quality goods to meet the low 
purchasing power of Tanzanians: plastic wallets instead of leather, 
for example.  While affirming that his government takes 
counterfeiting seriously, he acknowledged that some such goods will 
escape inspection.  MOF China desk officer Dulle concurred, saying 
that the GOT must ensure standards and that China could not be 
blamed for exploiting a ready market for cheap goods. 
 
¶10. Chinese exploitation of Tanzania's natural resources has also 
been a topic of public discussion.  On timber exports, for example, 
the GOT's 2004 ban on exports of logs is widely seen as ineffective. 
 A 2007 report by TRAFFIC International alleged that in 2004-05 
China imported ten times as much timber as shown in official 
Tanzanian records - suggesting a loss of 90 percent of tax revenue 
on the Tanzanian side.  More recently, the investment by a Chinese 
company in Tanzania's national airline has been linked to favoritism 
in oil concessions (see ref c). 
 
¶11. Finally, some Tanzanians question the presence of an increasing 
number of Chinese citizens in the country.  A recent opinion piece 
in the English daily "The African" asserted that foreigners, Chinese 
especially, entering the job market should be there as part of 
ventures which will create jobs for Tanzanians or provide otherwise 
unavailable services, not to enter into business ventures which 
could easily be carried out by Tanzanians.  Many an eyebrow is 
raised at Chinese vendors of plastic flowers (Tanzania has a nascent 
horticulture industry producing high quality flowers) and Chinese 
owners of local shops selling traditional garments and everyday 
items. 
 
Comment 
------- 
¶12. Despite concerns, the Tanzanian connection to China on both a 
personal and governmental level remains strong.  It was no 
coincidence that Tanzania was chosen as the only African stop of the 
Olympic torch in 2008, nor that the torch procession was met by loud 
cheers rather than protests.  Tanzanians overall continue to have a 
strongly positive outlook towards China; highly visible aid 
projects, like the new stadium, seem likely to sustain that image. 
 
ANDRE