VZCZCXRO3467
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0841/01 0890821
ZNR UUUUU ZZH
P 300821Z MAR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 3177
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RUEHBO/AMEMBASSY BOGOTA 0170
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 000841

STATE PASS USTR
DEPT FOR EEB/TPP/BA, EAP/CM, EAP/EP, WHA/AND, WHA/EPSC

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD EINV PREL PHUM ELAB CH CO
SUBJECT: COLOMBIAN VIEWS ON TRADE RELATIONS WITH CHINA

Summary
-------

¶1. (U) SUMMARY. Chinese investor interest in Colombia has risen
rapidly
since the November 2008 publication of China's white paper on Latin

America, Colombian diplomats told Emboff. Colombia is wary of
Chinese
motives and what it sees as lax Chinese environmental and labor
standards. However, Colombia needs new economic partners,
particularly
given the lack of progress on a U.S.-Colombia Free Trade agreement
(FTA),
they said. Colombia is mainly interested in Chinese investment, and
not
in an FTA with China, since the two countries' export products
compete.
President Uribe's decision to host the third annual China-Latin
America
Entrepreneurs Summit in Bogota in November also signals Colombia's
growing interest in China.
End Summary.

CHINESE INTEREST IN COLOMBIA, POTENTIAL HAIER INVESTMENT
----------------------- ---------------------------------

¶2. (SBU) Chinese interest in Colombia has picked up substantially
since
China's November 2008 publication of a white paper outlining an
updated
policy on Latin America, Colombian Commercial Attache Alejandro Ossa

told EmbOff on March 18. Chinese companies that previously were not

interested in the Colombian market are now showing very active
interest
as if responding to a clear directive, he said, citing Haier as an
example. After Venezuelan President Hugo Chavez visited China in
2006,
Haier and other Chinese companies like Huawei were instructed by the

Chinese government to invest in Venezuela. Contacts at Haier had
told
the Colombian Attache that they had been reluctant to invest in
Venezuela and therefore dragged their feet. However, they are now
in
discussions about investing in Colombia instead. Haier considers
Colombia to be more stable than Venezuela. Because its economic
policies are "more open" than Venezuela's, they believe Colombia to
be a
better base for targeting the rest of Latin America. A Haier
delegation
accompanied Chinese Vice President Xi Jinping to Venezuela and
Colombia
on his February 2009 visit to Latin America.

COLOMBIAN FRUSTRATION WITH U.S. FTA
-----------------------------------

¶3. (SBU) Ossa said that Chinese interest in Latin America is driven

primarily by a desire to expand China's influence. It is clear that
the
Chinese are willing to enter into deals without strong economic
benefits.
Unlike the United States, Beijing makes no demands, he said.
Colombia
is looking for additional economic partners, particularly as there
is
resentment over the fact that the U.S.-Colombian FTA has still not
been
approved by Congress. Ossa added that Colombia resents that human
rights issues have been a major impediment to the U.S.-Colombia FTA,

while many believed human rights were largely ignored during
Secretary
Clinton's February visit to China.

COLOMBIA NOT INTERESTED IN FTA, ONLY INVESTMENT
------------------- ----------------------------

¶4. (SBU) Unlike Chile, Colombia is not interested in an FTA with
China
because Sino-Colombian trade is not complementary. On the contrary,

BEIJING 00000841 002 OF 002


the
two countries' products compete. Ossa says that Colombia is not
willing
to be "walked all over" by China "like Africa and Venezuela." Ossa

admitted that Colombian attempts to increase some product exports,
in
particular fruit, have been unsuccessful due to the undeveloped
nature
of Colombian food and safety regulatory agencies.

¶5. (SBU) Colombia is interested in Chinese investment, Ossa said.
In
particular, the Colombian government is interested in Chinese
investment
in infrastructure, chemicals, automobile plants and consumer
electronics.
They are less interested in investment in mining or hydrocarbons
because
they are suspicious of China's environmental and labor practices,
and
are unwilling to make concessions on those fronts. (Note: Colombian

labor laws require companies to employ 10 Colombians for every
foreigner
hired. End note.)

COLOMBIA TO HOST CHINA LATIN AMERICA BUSINESS SUMMIT
-------------------------- --------------------------

¶6. (U) During the APEC meeting in Peru last year, President Uribe
and
President Hu discussed the possibility of Colombia hosting the third

China-Latin America Entrepreneurs Summit. It was officially
announced
in February 2009 that the summit will be held in Bogota in November
¶2009. Ossa noted that this was another signal of how interested Colombia
is in
beefing up its economic relations with China.


PICCUTA