In a small bowl, beat the cream cheese, sugar, egg and vanilla until smooth. Stir in coconut and chocolate chips; set aside.
In large bowl, beat the sugar, oil, egg and vanilla until well blended. In a small bowl, combine water and buttermilk; set aside. Combine the flour, cocoa, baking powder, baking soda and salt; add to the sugar mixture alternately with buttermilk mixture, beating well after each addition. Stir in pecans.
Pour half of the batter into a greased and floured 8-in. fluted tube pan. Spoon cream cheese mixture over batter to within 1/2 in. of edges; top with remaining batter.
Bake at 350° for 35-40 minutes or until a knife inserted in the center comes out clean. Cool for 10 minutes before removing from pan to a wire rack to cool completely. Dust with confectioners' sugar if desired.