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DE RUEHBJ #1050/01 1110218
ZNR UUUUU ZZH
P 210218Z APR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 3564
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZO/AFRICAN UNION COLLECTIVE

UNCLAS SECTION 01 OF 02 BEIJING 001050 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: EINV ETRD PREL SENV CH KE
SUBJECT:  Kenyan Ambassador on Growing China 
Relationship 
 
REF: Beijing 00288 
 
This cable is Sensitive But Unclassified (SBU) and 
for official use only. Not for transmission outside 
USG channels. 
 
1.(SBU) Summary: China continues to make greater 
inroads into Africa, with Kenya aggressively 
lobbying for closer ties with China and seeking a 
larger share of China!/s substantial investment in 
the continent, according to Kenya!/s Ambassador to 
China Julius Sunkuli.  Democracy in Africa is there 
to stay, and the Kenyan government and its vocal 
civil society ensure Kenya can avoid any potential 
negative effects on the environment or Kenyan jobs 
that Chinese investment might create. Ambassador 
Sunkuli opined the United States risks losing its 
still pre-eminent influence on the continent if it 
continues to make unreasonable demands on African 
governments.  He stressed that the indictment of 
Sudanese President Bashir would be counter- 
productive.  End Summary. 
 
 
Looking for Future Investment 
----------------------------- 
 
¶2. (SBU) Over lunch with Emboffs, Kenyan Ambassador 
Julius Sunkuli described Kenya!/s relationship with 
China as !0friendly, of growing importance and 
consisting of mutual interests.!1  He said Kenya is 
greatly interested in the China-Africa Development 
Fund (CADF), which has USD 1 billion (eventually 
expected to reach 5 billion) with which to support 
Chinese companies investing in Africa as equity 
partners (REF). Kenya did not receive funding for 
the initial tranche of projects supported by CADF, 
and is now lobbying more aggressively for a piece of 
the pie. In 2006, China!/s investment in Kenya was 
only USD 30 million and consisted of smaller-scale 
development projects such as hospital enhancements 
and the development of a sports center.  China!/s 
investment portfolio in Kenya now includes a variety 
of industries ranging from natural resources to home 
appliances manufacturing.  Kenya and the China 
National Offshore Oil Company (CNOOC) formalized an 
oil exploration agreement in 2006. In 2007, the 
state-owned metal manufacturing group Jinchuan 
became the first Chinese company to enter Kenya's 
mining sector with the purchase of a 20 percent 
stake in Tiomin Kenya, Ltd.  China recently granted 
the Kenyan government a concessional loan for a USD 
120 million road construction project. 
 
Tourism and Trade Promotion 
--------------------------- 
 
3.(SBU) Kenya imports Chinese-made household 
electric appliances, industrial and agricultural 
tools, textile goods and building materials, and 
hopes to increase its exports of items such as black 
tea, coffee and leather goods, said  Sunkuli. (Note: 
Kenyan exports to China grew 55 percent from 2006 to 
2008.)  Sunkuli said Kenya also hopes to capitalize 
on stronger trade relations to increase the number 
of Chinese tourists who visit Kenya. Currently, 
approximately 20,000 Chinese tourists visit Kenya 
each year.  Sunkuli noted that Kenya Airways!/ newly 
launched nonstop flight from Nairobi to Guangzhou 
would promote  both tourism and trade. [Note: Kenya 
Airways is the first Sub-Saharan Africa airline to 
offer a non-stop flight to mainland China.] 
 
 
A New Partnership, but with Issues of Concern 
--------------------------------------------- ---- 
 
¶4. (SBU) Sunkuli noted that Kenya!/s partnership with 
China has raised concerns about Chinese companies' 
environmental impact and labor practices.  However, 
he stressed that Kenya's government and vocal civil 
society would prevent any serious harm to Kenya's 
environment and workers.  He cited as an example the 
refusal of Kenya!/s National Environment Management 
Authority (NEMA) to permit a Chinese-owned cement 
company from building a proposed factory in an 
environmentally sensitive area, noting that 
environmental NGOs would have raised a furor if 
 
BEIJING 00001050  002 OF 002 
 
 
permission had been granted. Similarly, Kenya!/s 
labor activists criticize Chinese companies 
tendency to  hire Chinese nationals and avoid 
employing local labor.  In response,  the Kenyan 
government limits the number of work visas issued to 
Chinese workers, said Sunkuli. 
 
U.S. Risks Losing Influence in Africa 
------------------------------------- 
 
¶5. (SBU) Commenting on U.S. foreign policy in 
Africa, Sunkuli said the United States risks losing 
its still pre-eminent influence on the continent if 
it continues to make unreasonable demands on African 
governments.  He criticized the International 
Criminal Court (ICC) indictment of Sudanese 
President Bashir, arguing that the United States 
should have prevented this "counter-productive" 
move. 
 
PICCUTA