Phoenix Weekly on Chinese investment in the Mekong region

After the disappointing Ming Pao story I blogged about earlier, Phoenix Weekly, the Rupert Murdoch outlet not known for a penchant for independent reporting, came out with a quite balanced feature on Chinese investment in Laos, Cambodia and Burma. The article, much of it reads like the more balanced of Western media coverage of the subject, takes its cue from the ubiquitous Qin Hui, who says that Chinese companies and individuals must “respect local civil society and rights [and] don’t play the games they are used to from home” if they are to play a constructive role in the region. The author starts with the example of the real estate development on Phnom Penh’s Boeung Kak Lake by a shadowy company that has been linked to a state enterprise from Yunnan province. Both environmentalists and 4,000 local residents facing resettlement who are dissatisfied with the compensation offered have tried in vain to contact the company, and the Chinese embassy refused to reply to inquiries as to whether the investment was indeed from China. (The Cambodian Development Council’s data do not list it as such.) Similarly, a Chinese company building a hydropower project in Koh Kong province apparently promised that it would build a school, a water reservoir and a road for local villagers, but the promise failed to materialise and the contractor refuses to accept responsibility. At this site, 200 out of the 500 workers are Chinese, while others tend to be migrant labourers from other parts of Cambodia, employed only for simple physical labour and getting $5-8 a day, which while a high wage for Cambodia is much lower than the 5-6 thousand yuan (around $1000) a month the Chinese workers make (suggesting, incidentally, that these workers are not, or no longer, as cheap as they have been believed to be.) These cases, the article comments, compare  unfavourably to the behaviour of investors from other countries. While  Chinese managers are quoted in the article, this part of the coverage relies mostly on local NGOs and Western-run media such as the highly critical Phnom Penh Post, generally in a sympathetic way.

The article also diverges from the usual triumphalims in pointing out that the success of Chinese companies in securing infrastructural investment has been enabled by the retreat of international lenders from most dam and mining projects. In Laos, donors and lenders have reconsidered their inititial support in 1999. In part, the article comments, this was to avoid projects that were vulnerable to NGO criticism, but in part it was caused by the steep rise in costs that these projects entailed after they were required to conduct stringent environmental and social assessments and ensure that their construction follows a sustainable strategy. Chinese companies are not subject to these strictures and enjoy access to politically facilitated capital, but as Qin Hui points out, they too are encountering difficulties: in Laos (and in northern Thailand) resistance to projects on the Mekong mainstream is such that Chinese companies can only count on building smaller dams on corollary rivers, while the capacity and profitability of hydropower projects in Cambodia (where Chinese companies have achieved a near-hegemony on the market) is limited. This leaves Burma, where political risk is the highest.

The article ends with what now seems a “politically correct” view in Chinese policy circles: the fuss kicked up by Western media about China’s “resource imperialism” is politically motivated, but this does not mean that Chinese companies’ actions are beyond reproach. Indeed, the author warns, while Chinese loans and aid are an attractive alternative to the strings-attached World Bank packages, a windfall of resource revenues under non-transparent conditions in badly governed countries will increase corruption, and locals might “mistakenly” blame it, as well as environmental damage and rapid social change is, on Chinese investors or even China itself.  A conclusion that could have been written by Sarah Raine or another Western analyst.

Elsewhere in Phoenix Weekly, Qin Hui wrote approvingly that in Laos, the feasibility studies companies must supply for the government approval of their projects include showing a positive or at least neutral impact for local residents and the advanced settlement of land acquisition issues — rather than, as in China, merely showing that the project will be good for the country and expecting that the government will then take care of land settlements. This is part of a long and decidedly un-academic Laos travelogue, observant in parts and simplistic in others, but generally written on a note of positive feelings for a country that does not seem to embrace high-speed development but appears to offer its people a considerable measure of existential security and community pride. (I am paraphrasing Qin here.)

In yet another article, written for Jingji Guanchabao (Economic Observer) but republished on the website of Qiushi, traditionally the Communist Party’s conservative journal for “Marxist theory,” Qin writes about disputes over dams on the Mekong within China. His point here is while the dams have varying and often effects on downstream countries — for example, if they cause drought in Laos they will likely prevent flooding in Cambodia — nobody there seems ever to thank China for the positive effects, while blaming it automatically for the negative ones. This, he says, is because the Chinese government refuses to acknowledge that it has any responsibility for whatever happens downstream. His advice to the government: be open with downstream NGOs, and then you can take credit for some of the positive outcomes.

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