Iraq and China Strengthen Relationship

Iraq has asked China to set up a fund to help with the reconstruction of the war-battered country, Iraqi government spokesman Ali al-Dabbagh said on Monday during a visit to Beijing by Iraqi Prime Minister Nuri al-Maliki.

Reuters reports that he also said Baghdad was keen to get Chinese companies investing in the country, which was China's seventh largest supplier of oil last year.

The United States has spent $54 billion in relief and reconstruction efforts since the 2003 invasion, and it and the Iraqi government have spent billions more in Iraqi money, but ordinary people have seen little improvement.

The Iraqi government, which gets most of its $72 billion budget from oil revenues, says it is committed to improving basic services, but progress is painfully slow.

"We are asking the China side to make a fund, for ... reconstruction and to guarantee and assure the investment in Iraq for Chinese companies," Dabbagh told reporters in Beijing.

"Koreans they did the same; they had to create a fund [with] which they support their companies to work in Iraq. Germany is going to make such a thing. Iraq is requesting from China to have such (a) fund," he added, speaking in English.

Chinese oil firms from have been working hard to rebuild their presence in Iraq since several big contracts signed by Chinese oil firms were cancelled in 2003 following the toppling of former president Saddam Hussein.

In 2008, the state-owned China National Petroleum Corporation (CNPC) successfully renegotiated a contract originally signed by the previous regime to develop the al Ahdab oilfield, becoming the first country to sign an oil service contract in Iraq under the new U.S.-backed regime.

CNPC completed construction of the first phase of the oilfield in June this year, and it is also developing Iraq's Halfaya oilfield with France's Total and Malaysia's Petronas. CNPC also has a 37 percent stake in a service contract to develop the Rumaila oilfield, which pumps out almost half of Iraq's total oil output.

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