VZCZCXRO3652
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1679/01 1700839
ZNY CCCCC ZZH
P 190839Z JUN 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 4681
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RUEHBY/AMEMBASSY CANBERRA PRIORITY 9707
RUEHSV/AMEMBASSY SUVA PRIORITY 0084
RUEHWL/AMEMBASSY WELLINGTON PRIORITY 0657

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 001679 
 
SIPDIS 
 
E.O. 12958: DECL: 06/04/2039 
TAGS: PREL EAID ETRD CH FI AS NZ
SUBJECT: PRC/SOUTH PACIFIC: INTERNATIONAL ISOLATION OF 
REGIME IN FIJI AN OPPORTUNITY FOR CHINA 
 
REF: A. BEIJING 383 
     ¶B. SUVA 82 
 
Classified By: Acting Political Chief Ben Moeling. Reasons: 1.4 (b) and 
 (d). 
 
¶1. (C) SUMMARY:  While Chinese government interlocutors 
continued to stress the centrality of "non-interference" to 
China's foreign policy, a Fijian EmbOff told us a new package 
of Chinese economic assistance to Fiji announced earlier this 
year arrived just as western sanctions were proving 
problematic, and so had a political effect.  Fiji remained 
strategically important for China and Beijing was privately 
candid about linking development assistance and economic 
engagement with "guaranteed" political support on issues of 
interest to China, such as Taiwan, even as the MFA downplayed 
the importance of checkbook diplomacy given improving 
cross-Strait ties.  According to MFA contacts, western-led 
efforts to push for political reform in Fiji were part of 
Fiji's underlying problem.  China, as a developing country 
and regional leader, had unique insights into Fiji's 
political needs.  According to a New Zealand EmbOff, the 
Chinese understood the political risks of being seen as 
undermining western sanctions, and had taken steps at damage 
control with Australia and New Zealand.  END SUMMARY. 
 
China Sees Strategic and Economic Importance in Fiji 
--------------------------------------------- ------- 
 
¶2. (C) MFA North American and Oceanian Affairs Division 
Deputy Director Zhou Jian told PolOff May 27 that Fiji was a 
friend and reliable partner as well as a regional leader with 
strategic importance in the South Pacific, a region rich in 
small-country UN votes.  Warm relations between the two 
countries were undergirded by the history of Fiji's 
relatively early diplomatic recognition of the PRC and 
continuing strong ties throughout the series of coups that 
beset Fiji in recent decades, including the latest in 2006. 
Beijing-based Fijian EmbOff Filipe Alifereti (protect) agreed 
in a meeting May 26 that China viewed Fiji as an important 
partner, noting that China valued Fiji as a useful transit 
point and for its proximity to important shipping lanes. 
Still, he argued, China essentially viewed Fiji as it did 
resource-rich African nations: a valuable destination for 
economic engagement but of marginal and possibly declining 
political utility. 
 
Non-Interference Still the Mantra 
--------------------------------- 
 
¶3. (C) Zhou insisted that China's traditional position of 
non-interference in the internal affairs of other countries 
guided China's Fiji policy.  He stressed that since the 2006 
coup, China had maintained its position emphasizing stability 
and economic development while urging the Fijians to work 
together to resolve their political problems.  He claimed 
that the PRC had maintained constant contact with the 
military government and had urged them to continue dialogue 
with donor countries such as Australia and New Zealand.  He 
insisted that maintaining social stability and economic 
development in the island nation was the common goal of all 
parties, including the U.S. and China. 
 
Western-led Pressure Part of the Problem 
---------------------------------------- 
 
¶4. (C) Framing the international community's efforts to help 
resolve the on-going political crisis in Fiji as part of the 
problem, Zhou urged the international community to maintain 
dialogue with the military government and "listen to its 
perspectives."  He suggested that western powers were 
compromising Fiji's sovereignty by pushing for political 
reforms, and stressed the importance of understanding Fijian 
culture and its emphasis on consensus-building.  He 
highlighted China's engaged but low-key approach toward Fiji 
in the context of the Pacific Island Forum (PIF).  He 
insisted that China did not seek to establish a "sphere of 
influence" in the South Pacific or undermine third countries' 
interests there. 
 
Political Support "Guaranteed" Due to Economic Influence 
--------------------------------------------- ----------- 
 
¶5. (C) Alifereti asserted that there was little need for the 
Chinese to push directly for political support from Fiji on 
issues of Chinese interest, because such support was 
"guaranteed" and China's interests were well-understood by 
Suva.  He indicated that such political support was a simple 
consequence of the enormous economic influence China had on 
 
BEIJING 00001679  002 OF 003 
 
 
the island.  In addition to assistance, trade and investment 
ties, the Chinese government was providing Fijian government 
officials with training on a range of skills in China, 
Alifereti reported.  This included training military 
officials, a practice that began after the 2006 coup, he 
added. 
 
Economic Ties Grow, Driven by High-level Interest 
--------------------------------------------- ---- 
 
¶6. (C) Zhou told PolOff that China had signed at least four 
economic agreements with Fiji during Vice-president Xi's 
controversial February transit stop in Fiji on his way to 
Latin America (reftels), but insisted that the MFA had few 
details of the deals.  Repeating claims that the transit stop 
was "nothing special" and arranged out of mere convenience, 
he reported that one of agreements was a 10 million RMB grant 
but the details of its use were still under discussion.  Zhou 
insisted that China was providing "project assistance," and 
not simply cash.  He noted that during Premier Wen Jiabao's 
2006 visit to Fiji China announced deals worth almost 400 
million RMB to Fiji as a part of a larger package of aid to 
the South Pacific, but the execution of these funds had been 
bogged down by political turmoil in Suva.  He denied media 
reports that China had doubled its assistance to Fiji in the 
three years since the coup, insisting that Chinese aid had 
remained level or declined since 2006.  He expressed Chinese 
frustration with the inability of the Fijians to move forward 
with the grants, noting that MOFCOM was awaiting a list of 
projects the regime would like to see implemented before 
initiating a feasibility study. 
 
China Economic Activity Just in Time to Counter Sanctions 
--------------------------------------------- ------------ 
 
¶7. (C) Alifereti acknowledged that China's economic 
engagement was growing at a time when Fiji needed the 
support.  While skirting the issue of Australian and New 
Zealand-led efforts to isolate the regime in Suva, he did 
point to a planned UK investment in the sugar sector that was 
recently dropped due to the political situation in Fiji as 
evidence of economic sanctions causing concern for his 
government.  In light of those concerns, Alifereti applauded 
the "good timing" of the soft loans announced during Xi's 
stop-over.  In addition, he contrasted the styles of western 
and Chinese investors in Fiji:  Australians and New 
Zealanders normally sought to raise capital from within the 
island, which in his view increased the financial risk of 
projects, while the Chinese brought cash to the island from 
the outside and clearly "wanted to spend." 
 
¶8. (C) Alifereti explained that Chinese cash was flowing in 
just as traditional sources of income were drying up.  A 
recent drop in remittances from Fijian troops serving in UN 
peace-keeping operations occurred at the same time that 
Chinese tourism to the island was growing quickly due in part 
to a new China-Fiji air service agreement and a relaxation of 
Fijian visa regulations for Chinese visitors.    Alifereti 
also noted that Chinese goods, which used to come through 
Australia and New Zealand at a heavy premium, had been 
flowing directly to Fiji thanks to direct shipping routes 
opened in February 2008. 
 
Admiration for the China Growth Model 
------------------------------------- 
 
¶9. (C) Through this range of development assistance and soft 
power programs, Alifereti suggested that the message to Fiji 
was clear )- the Chinese development model had brought huge 
success to China without any need to institute political 
reform.  He asserted that Fijian culture resembled China's in 
the sense that both maintained that political problems should 
be solved "internally" and that Fiji was "not fit" for 
competitive politics.  Zhou from the MFA agreed, stressing 
the "consensus-building" nature of Fijian culture and China's 
unique ability to understand this. 
 
MFA: China Not Undermining Western Efforts 
------------------------------------------ 
 
¶10. (C) MFA's Zhou denied that China sought to take advantage 
of western efforts to isolate the regime in Fiji, 
underscoring China's desire to cooperate with the United 
States, Australia, New Zealand, and others on development 
assistance to Fiji and other less developed countries (LDCs). 
 He stressed that Chinese assistance to Fiji had been in 
place since the establishment of China-Fiji relations and 
that no new projects had been begun since the 2006 coup. 
Zhou denied that this aid hiatus was due to the coup, but 
 
BEIJING 00001679  003 OF 003 
 
 
rather reflected the difficulties of working with the Fijians 
on the ground.  While some Chinese projects in Fiji 
continued, Zhou insisted they were projects that were 
contracted before the 2006 coup.  He admitted that China 
remained inexperienced as a donor nation, and offered that 
the MFA could cooperate on the ground with the United States 
and other donors.  Zhou noted, however, the MFA's relatively 
low-profile role in providing assistance, compared to MOFCOM, 
which had the lead on foreign assistance. 
 
Looking Past Taiwan? 
-------------------- 
 
¶11. (C) Zhou asserted that, with the recent thaw in 
cross-Strait relations, China's policy in the South Pacific 
was looking past its traditional focus on checkbook diplomacy 
to buy UN votes to shore up its claim to Taiwan, and the 
Taiwan issue had become "less of a priority" in Chinese 
foreign policy with the South Pacific. 
 
PRC Knows It Went Too Far? 
-------------------------- 
 
¶12. (C) Embassy of New Zealand PolOff Tara Morton observed 
that, since interventions by Australian and New Zealand 
officials, including at the Prime Minister-level, the Chinese 
appeared to have been "shamed" by the Xi Jinping transit. 
She add that their MFA contacts assured them that such lack 
of coordination on regional issues would not happen again. 
She stressed that the value of the deals signed in the 
transit was "massive" and potentially very destructive given 
the poor capacity of small South Pacific nations to repay 
large loans, and the value of the new assistance had 
obviously been underplayed by Beijing.  She added that the 
PRC had been candid with New Zealander interlocutors in 
linking Fijian support on the Taiwan issue to China's 
development assistance there. 
PICCUTA