INTERVIEW-China envoy says there was no $8 bln S.Sudan aid offer

BEIJING, March 14 Thu Mar 14, 2013 11:38am GMT

BEIJING, March 14 (Reuters) - China never promised South Sudan $8 billion in development funds when South Sudanese President Salva Kiir visited Beijing in April, but much more than this could be offered if the country achieves lasting peace, a senior diplomat said on Thursday.

South Sudan's government announced the figure following the trip, and until now Beijing has neither confirmed nor denied it.

Speaking to Reuters in an interview, China's special envoy to Africa, Zhong Jianhua, who has helped in mediation efforts between the two Sudans and knows both countries well, said there was no $8 billion development deal.

"If there was any promise, it was that after South Sudan achieves peace with Sudan then it is a very promising country and can ramp up development, and then China is willing to play a development role in South Sudan and help them. But those plans have to wait for peace before we can talk about this," Zhong said, sitting in a meeting room inside the Foreign Ministry.

"I don't believe that this is something both sides acknowledged following the visit. This was not mentioned in any of the official Chinese reports following the visit; there was nothing about $8 billion," he added.

"It's not impossible - maybe in the future, and maybe not only $8 billion," Zhong said, without elaborating.

"Certainly, it needs a development plan, and a big one at that. It faces a lot of challenges. I've been to Juba many times. Running water, electricity, road lights, bridges -- it needs a lot."

Relations between the two Sudans soured soon after South Sudan achieved independence in 2011 following a long and bloody civil war, due to arguments over oil revenues and territory.

Landlocked South Sudan shut down its 350,000 barrel-per-day crude output in January last year in a row with Sudan over how much it should pay to send the oil through Sudanese pipelines to the Red Sea.

South Sudan said on Tuesday it would be ready to restart oil production within three weeks after finalising a deal to resolve bitter border and security disputes with Sudan.

China has had to play a delicate balancing act.

It is already the biggest investor in oilfields in South Sudan, through state-owned Chinese oil giants China National Petroleum Corp and Sinopec. Beijing is also one of Sudanese President Omar Hassan al-Bashir's major supporters.

Zhong said that while he was pleased this week's agreement had been reached, he remained concerned about the peace process.

"These antagonistic feelings still exist. There are still people who think now is not the time for reconciliation ... But the general trend is still progressing in a positive way."

China would continue to work with the international community to mediate between the two sides, he added.

"President Hu (Jintao) told President Kiir very clearly when he visited that if you want to develop, it will be very hard without peace," Zhong said.

China's parliament formally elected Xi Jinping as president on Thursday to replace Hu after 10 years in the job. (Reporting by Ben Blanchard; Editing by Nick Macfie)