China needs new approach towards overseas investment
- By He Shan
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E-mail China.org.cn, April 1, 2012
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China has made great success in investment in Asia and Africa, but now needs to reshape its approaches in dealing with the local people. [File photo] |
China must search for effective ways to navigate the myriad of risks associated with its overseas investments, especially in high conflict areas of Asia and Africa.
In recent years, Chinese businesses have gained a foothold in Asian and African countries but caused friction there. Some Chinese companies have been blamed for paying no heed to the local environment and stealing local jobs.
China's traditional means of diplomacy has aided China's overseas investments over the past few years, but now political relations have become an impediment to further progress in some cases. Many of China's "old friends" have been caught up in the contagious political tumult that has swept through much of Africa and the Middle East.
On Sept. 30, 2011, Myanmar's government ordered a suspension of a hydroelectric power project aided by China in a concession to public worries about its possible environmental impact. The suspension was a blow and also a warning to China, who had established good rapport with the Myanmar government.
As another case in point, China has achieved success in deals in Angola, but in recent years, some Angolans have begun to attack the business practices of Chinese firms, saying the ventures shunned local laws or fell short of the demands by the local people.
Chinese companies' overreliance on the support of Chinese government and local authorities in making overseas investments has also fueled anti-Chinese sentiment among locals.
Because of excessive reliance on the support of local governments of host countries, Chinese companies lack a through understanding of the risks existing in the regions, which can often lead to the mishandling of situations on the ground.
At the same time Chinese investors have complained about difficulties with local groups, issues have also arisen regarding safe working conditions for Chinese workers stationed abroad.
"Chinese living or working in those conflicting regions complained that the Chinese government balked at playing a major role in safeguarding overseas Chinese companies and their workers in those conflicting regions," said Jiang Heng, a deputy researcher of Chinese Academy of International Trend and Economic Cooperation.
Wang Zhile, director general of the Beijing New Century Academy on Transnational Corporations, told reporters at the Transnational Corporations China Forum in Beijing that if Chinese investors want to be understood, they also need to understand their foreign counterparts.
"Overseas investment is not economic colonization, nor cultural colonization. It's not about buying or conquering, but rather the establishment of a common interest community and the realization of mutual development under the same vision," Wang said. "China really needs to rethink and reshape its approaches in the process of fulfilling its investment aspirations."
