News

Hubei State Farm (湖北农垦) and a company called 与襄阳万宝粮油公司 have signed an agreement to develop a 50,000-mu (33 square km) farm in Mozambique, largely growing wet rice.

Four companies, Tianyu First Automobile African Investment 天与一汽非洲投资有限公司, China-Africa Huachen Investments, Qirui Overseas Business Investments 奇瑞海外实业投资有限公司 and China Northern Automobile, have signed an agreement with the China-Africa Development Fund to jointly promote car production in Africa. All of them already have production facilities in Africa.

Sinohydro said it would not release funding for the Kariba South dam extension until Zimbabwe repays the Eximbank $27 million for agricultural equipment.

  • PKU African Tele-Info 118 (4 December 2012)

All public schools on Lagos will teach Chinese, was announced at the third Chinese-African Cooperation Roundtable in Wanning, Hainan.

The World Bank Group and China have launched a new knowledge hub to improve development outcomes, aiming to spread practical knowledge from China’s successes in reducing poverty both within China as well as to other countries. Initially, the knowledge hub will help find environmentally friendly solutions to expand urban transport in China’s cities. Under the Memorandum of Understanding (MoU) on the World Bank-China Knowledge Hub for Development signed in Beijing by World Bank president Kim Young Jim and China’s minister of finance, Xie Xuren, the first pilot, called TRANS-FORM, will focus on urban transport.

The 4th Bureau of China Railway Construction has completed the first 424 buildings, with a total of 9808 residential units. A clinic and a school have also been completed.

Nicaragua has signed an agreement to build a new canal linking the Atlantic with the Pacific. The planned investment is $30bn. A company has been registered in Hong Kong to secure investment and act as general contractor.

The secretary of the Goods Made-in-China Importers Association (GMIA), Chief Udoka Charles Udeogaranya, said that “we would be pleased to see the Federal Government give the Chinese a well deserving immigration status in Nigeria that is due to the highest provider of jobs in country, as well as focus more on China and put up infrastructures that can facilitate local manufacturing in Nigeria.”  Udeogaranya claimed that Chinese nationals have “contributed” to creating 35 million jobs in Nigeria and noted that China is now the largest importer of Nigerian oil and agricultural products.

Director-General Lu Shaye of the Department of African Affair at China’s foreign ministry said that the ministry was handling the cases of Chinese engaging in “unruly behaviour” in Africa “seriously and we are seriously studying what measures to take to prevent such incidents. … The Chinese government strongly criticises companies and individuals who do not kindly treat Africans and who take actions that affect the people’s rights. Such acts have seriously tarnished China’s image in Africa and seriously undermined our relations.” This is probably the most strongly-worded statement in a series of similar ones over the past few years. The article does not make clear what specific cases Lu was referring to.

Police in Ghana killed a 16-year-old Chinese citizen in a raid and detained more than 100 other Chinese on suspicion of illegal gold mining, according to a statementon the Chinese embassy’s website. Ghana, like Suriname and Ecuador (see earlier News), has faced an influx of illegal small-scale miners from China. Foreigners are barred from participating in small-scale mining in Ghana. The Chinese government reacted with unusual firmness to the killing: “We demand the Ghanaian side investigate the case and punish the perpetrators as soon as possible,” Foreign Ministry spokesman Hong Lei said. Chinese ambassador Gong Jianzhong called for compensation to the family of the victim.

The projects include a hospital in a place identified as “新阶镇” in “Mandalay Province,” 5 clinics and 2 schools. In total, CNPC has signed a commitment to spend $6 million on social projects, of which 8 schools and 19 clinics have been completed.

The contract is worth $500 million, including power lines and roads, and will be the largest foreign investment in Guyana to date.

The regional electricity company EFT, active across Southeastern Europe, signed an agreement with Sinohydro on the construction of the Ulog hydropower plant on the Neretva under the EPC model (engineering, procurement and construction) model, financed by China Development Bank). Dongfang Electric is also part of the consortium. The total investment value is 60 million euros. This is the second power building in Bosnia which the EFT will build with Chinese partners and fund through the Chinese Development Bank. A separate agreement has been signed for the construction of the Stanari thermal power plant, with a total investment value of 550 million euros, of which Dongfang Electric’s contract amounts to 350 million euros, also to be financed by the China Development Bank. International Rivers notes that Sinohydro has stated that this is its first successful hydropower project contract bid in Europe. The situation seems similar to that in Peru. On 30 August, a subsidiary of Power Construction Corporation of China had signed an MoU to construct two dams in Montenegro

  • Wei Gu, “To Ease Fears, Huawei Goes to Britain,” Reuters, 13 September 2012

Huawei has offered to invest $1bn in Britain over the next five years, buy $1bn worth of equipment, and double its work force in the country.

Five central- and provincial-level Chinese state fisheries companies have established joint ventures in Morocco,  where they offer buyers’ credit to the JVs in the form of ships and equipment, while Moroccan companies apport their fishing licences and onshore infrastructure.

  • Andrew E. Kramer, “Land-rich Russia lures cash-poor Chinese,” International Herlad Tribune, 11 September 2012, p. 16.

The article profiles one of nine private Chinese vegetable farms in Sverdlovsk Province. It  is run by a former trader at the Ekaterinburg market who bought shares of a former collective farm from villagers and recruited peasants from Heilongjiang to work on it. This year, he received a quote for 70 Chinese workers from the Russian Federal Migration Service. The work is seasonal; in the winter, the workers and the owner return to China. Workers earn about $650 a month. According to the article, Chinese companies also lease about a million acres of farmland and two million acres of forest, mostly in Eastern Siberia.

  • Rudolph Chimelli, “Pharaonisches Unterfangen” (A pharaonic enterprise), Sueddeutsche Zeitung (Munich), 30 August 2012, p. 1

China State Construction Engineering Corp. has received a contract  from the Algerian government to build the world’s tallest minaret in Algiers. 10,000 Chinese workers are expected to work on it. The company is already building the East-West highway in the country.

  • Matthias Williams, Maldives says China to lend it $500 million”, Reuters, 30 August 2012

Maldives President Mohammed Waheed announced ahead of a visit to China that the loans would comprise “an agreement for a $150 million, primarily for infrastructure and housing projects”, plus $350 million provided by Eximbank. China had recently set up an embassy in the Maldives. Waheed said that China is the top source of tourists in the Maldives.

This is Sinohydro’s first project in Laos, started in 2008 under a BOT agreement. In 2011, Sinohydro and some other companies under SASAC established ChinaPower as an entity to manage overseas projects.

Changsha-based Zoomlion (中联重科) is supplying machinery to three Chinese hydropower projects in Ecuador, including Sinohydro’s Coca-Codo Sinclair dam project, which now apparently started after several setbacks (see earlier news). According to this report, the total investment in the Sinclair project is $2.3bn. The other two projects mentioned are Gezhouba’s Supradora and Harbin Electrical Equipment International Contracting Co. 哈尔滨电气国际工程公司’s newly signed Minas San Francisco project. It is interesting that Zoomlion set up an office in Ecuador and project offices on each site.

The Nigerian government signed a $1.49 billion contract with China Civil Engineering Construction Company Nig Ltd for the construction of the Lagos-Ibadan railway.

At a village meeting at Imbaimadai, inland Guyana, facilitated by the Guyana Women Miners Organization (GWMO) on Sunday, villagers complained that they were ordered to cease small-scale gold mining operations in favour of a Chinese company. Previously, the place had been “flooded” by Brazilians and “Spanish-speaking nationals,” but“’The difference between the Brazilians and Chinese is that the Brazilians would employ one, one Guyanese, so we would still catch a li’l hand even though it is not we dredge; but not these Chinese. Dem does do everything dem self.’ Further, the residents said that the Chinese bring in all their supplies and hardly support any of the village shops.”

The article argues that there is an opportunity for Chinese businesses to invest in supermarket chains in Africa.  天地亿万多 already has stores in Madagascar, Togo, and Mozambique. The stores were built by 安徽外经建设（集团）有限公司 using aid money.

  • 中国水电与老挝签署南欧江流域梯级水电站一期特许经营协议和购电协议 (Sinohydro and Laos sign agreement allowing operation of Nam Ou cascade hydropower plant’s first stage), SASAC press release, 14 June 2012

The cascade will consist of 7 dams. The planned investment exceeds $2 bn. An agreement on purchasing the generated electricity has been signed as well. All of the electricity will be sold to Electricite du Laos. Sinohydro holds a 85% stake in the joint venture, while EdL holds the rest.

Waqar Masood, secretary of Pakistans Economic Affairs Division, said that
“China has emerged as the largest development partner and creditor of Pakistan in the last three years and its loan portfolio has increased to whopping $3.3 billion.”

Hungary’s minister of the national economy signed an agreeement with the vice-president of China Development Bank on 1 May about a  €1bn loan. The opposition Socialists demand that the government reveal which projects are to be financed with this loan and how the decisions have been made. They also want assurances that the loans will benefit Hungarian SMEs.

The loan is to fund  agriculture, telecommunications, and hydropower projects, and is one of the largest by China to an African country (on par with Angola and Congo-Kinshasa). It comes against the history of China supporting the government of (North) Sudan in the civil war and now trying to mediate between the two Sudans.

MOFCOM announced that mainland Chinese investors invested $16.6 billion in 1096 foreign entities in 109 countries in the first quarter, a 95% increase over the same period last year. The stock of FDI from China was $339 billion at the end of March. Completed engineering procurement contracts (EPC), which are not included in Chinese FDI statistics, amounted to $20.8 billion during the same period, a 23% increase over last year. Also during the same period, 91 thousand Chinese workers were sent abroad on labour contracts, 2,000 fewer than during the same period last year. The stock of mainland Chinese contract workers abroad at the end of March was 809 thousand, or 40 thousand more than last year.

The project involved building nearly 1300 km of power lines and 232 substations. At the opening ceremony, the head of Gezhouba International, Ren Jianguo, announced a donation of $24 thousand to local “education and welfare.” Lao PM Thongsing Thammavong praised Gezhouba for “their desire to share in local development and enthusiastically uphold social responsibility  与当地共同发展的理念，积极担当社会责任”.

This is the Battambang-Phnom Penh high voltage line in Cambodia, which Datang constructed in conjunction with the Stung Atay hydropower plant, both in a BOT arrangement. (In order to go around Cambodian laws that prohibit the same companies to both generate and carry electricity, this investment was done via a locally registered daughter company, but this article simply refers to Datang as the investor.) The line includes three power substations.

In 2011, the company leased the 333-hectare Gaza Friendship Farm, a former site of Chinese agricultural assistance to Mozambique, for $1/ha for 50 years and invested about 80 million yuan in rice growing and a rice processing plant and silo. It plans to double the planted surface next year.

Huali, a Zhejiang-based company, is already setting up the Rayong Thai-Chinese Industrial Park, originally scheduled to open in 2015. Export-oriented production costs in both locations are now considered lower than in Zhejiang.

The Confederation of Indigenous Nationalities in Ecuador (CONAIE), the country’s largest “indigenous” umbrella group, is cemanding the cancellation of a $5.4 bn contract with a Chinese-owned group called Ecuacorriente, signed on 5 March, to invest in Ecuador’s copper mining in the Amazon region. Previously, environmentalists protested in front of the Chinese embassy in Quito with banners that read “Chinese enterprises out of Ecuador.” The Chinese ambassador said the Chinese government urges Chinese companies to respect environmental norms and work with local communities.

  • On 22 March, Peking University’s Centre for African Studies, in cooperation with the Chahaer Society, a private foreign-affairs think tank, organised the second training on public diplomacy for Chinese companies operating in Africa. (PKU African Tele-Info 84, p. 2.)

Bulgarian Prime Minister Boyko Borisov attended the opening of Great Wall’s new factory in the village of Bahovitsa. The plant is to be operated jointly by Great Wall and the Bulgarian firm Litex Motors. In the midterm, Great Wall plans to assemble around 50,000 automobiles per year. The number of workers is expected to grow from the current total of 120 to 2,000.

  • Kenya-CCTV Africa,” CCTV (China Central Television), 11 January  2012 (via Josh Maiyo)

China Central Television has officially launched CCTV Africa, a news production center based in Kenya that focuses on African news and perspectives as well as international news. Simultaneously, CCTV launched a mobile TV application for Africa, CNTV, which allows viewers in Africa to watch documentaries, educational programs, TV dramas and films through their mobile devices. Kenya’s vice president Kalonzo Musyoka attended the launch and said that CCTV’s choice of Kenya as its African news production hub “is a great honor” that  shows the “brotherly ties between Kenya and the People’s Republic of China.”

汝城县水电有限责任公司, apparently a small Chinese hydropower company, has inaugurated the first micro-hydropower station in Africa funded by Chinese aid in the framework of the “Lighting Up Africa” programme. The dam, whose name is Romanized as 西瓦安都 (Xiwaandu), is in Zambia, and has been supported by UNIDO. Previously, the same company has exported mini-dams to Indonesia, Mongolia, and Nepal.

Over the past ten years, Eximbank lent $67.2bn to sub-Saharan Africa, vs World Bank’s $5.47bn.

The Lifan car plant in Addis Abeba is expanding capacity to 3000/year. Changcheng (Great Wall) and Geely have also set up a jeep and pickup plant and a compact car plant in Ethiopia, respectively. Futian is setting up a plant in Nairobi, scheduled to open this year and with a planned capacity of 10 thousand/year. And King Long, a bus manufacturer from Xiamen, is setting up a plant in Senegal. In separate news, 中国铁建(China Railway Construction) signed an EPC contract worth $1.2bn to build a railway between 米埃索 (Miyasu) , 迪雷达瓦 (Dileidawa) and  达瓦利 (Dawali). The track will be built according to Chinese standards (rather than the European ones common in Africa).

China has been the largest trading partner of Brazil since 2009 and the largest source of FDI since 2010. In that year, $17 bn out of a total FDI of $40 bn came from China. In the first 10 months of 2011, Chinese companies announced 16 planned new investments worth $7 bn, 44% of which is in carmaking.

The acronym refers to the Industrial and Commercial Bank of China.

The patrols are part of a new Chinese-Lao-Thai-Burmese joint operation headquartered in China, set up after 13 Chinese sailors were killed on the Golden Triangle stretch of the Mekong. The article does not detail the powers of the patrols.

The investment is $1.6 bn. Sinomach (China Machine-Building Group) is a large state enterprise that does not specialise in oil.

This project by Datang is the first “clean development” (CDM) power project in Burma and the first such Chinese power plant abroad intended to generate energy for China. The project is a 35+5 year BOT. No investment figure was listed in the report.

The prize was awarded by the State’Council’s State Assets Commission (国资委) for CNAL’s corporate social responsibility activities in the Zambia-China Economic Cooperation Zone in Chambishi at a CSR conference at which it exhorted state enterprises to make CSR “a core activity.”

The Benin Chinese Brands Exposition Centre,  a five-story building that will house about 40 shops, meeting rooms, accommodation, and a restaurant, will open in Cotonou in February. Financed in part with Chinese aid, it is a BOT project that will, for 50 years, be managed by Tianshi (浙江天时国际经济技术合作有限公司) and then handed over to the Benin government. Previously, Chinese media reported on similar initiatives in Africa and Central Americal by merchants from Wenzhou.

The average wage of a common worker at a Canton garment company has risen from 1,800 yuan three years ago to 3,000 yuan. Another profiled company, based in Ningbo, is moving its production to Cambodia.

In 2009, a similar credit line resulted in ２４ projects receiving financing totaling $６３２million and creating ６０００ jobs. According to a bank official, since 2005, CDB has granted loans totalling $7bn in Africa.

The area is divided into three chunks and consists of hardwood. The company received a 70-year concession, including a ten-year licence to fell trees. The timber will be processed locally. Shengda’s CEO estimates local wages to be 200-300 yuan.

The projects include a coal-fired power plant in Sihanoukville by Ordos, the group involved in the controversial Boeung Kak Lake real estate project in Phnom Penh. The group is cooperating with Sino-Khmer tycoon, ruling party senator and Hun Sen crony Lau Meng Khin on both projects.

The Chinese government announced that its famine-alleviation aid to the Horn of Africa has reached nearly $70 million, the largest humanitarian aid package in the PRC’s history and, according to Kenya’s vice-president, the largest national contribution to Kenya’s famine relief. Before this announcement, the China-Kenya Commercial Association 中肯经贸协会 and other Chinese organisations in Kenya donated 60 tons of maize and 5 tons of soybeans to 9,000 villagers in Lorenge Lup.

State Grid Brazil has invested nearly $ 3.5 billion in Brazil since last year, acquiring seven power transmission companies. It has now also bought a representative building in Rio for $205 billion. Brazil is the second target of the State Grid’s overseas investment after the Philippines, where it owns a 40% stake in the National Grid Corporation. State Grid Brazil’s CEO Cai Hongxian said he has no plans to bring Chinese labour to Brazil.

The donation is the first instalment of a promised package of $6 million. The schools are to be constructed along the pipeline, primarily near the port of Kyaukpyu. The announcement came just around the time the Burmese government the construction of the Myitsone dam, amidst specualation that the construction of the pipeline might also be in trouble.

This government-run Zimbabwean paper reports that Anjin, a joint venture between AFECC of China and the Zimbabwe National Army, has been denied Kimberly Process certification and is hence unable to sell its diamonds internationally. The company and the Zimbabwean government say that Anjin meets certification requirements and has furthermore built more than 400 houses, a clinic, a primary and a secondary school for villagers relocated from the mining site.

  • China splits power industry, launches two new SOEs to boost reform,” Xinhua’s [sic] China Economic Information Service, 29 September 2011 (via International Rivers)

Sinohydro, HydroChina, and the design and construction units previously affiliated with the State Grid and China Southern Power Gird in some regions, will merge into PowerCorp, with assets totaling 196 billion yuan (30.63 billion U.S. dollars) and 202,700 employees. China Energy Engineering Group (CEEG) has taken over Gezhouba and the China Power Engineering Consulting Group Corporation, along with auxiliary units previously operated by the State Grid and Southern Gird in other regions.

The Shangai Green Building System Company [sic] has signed a MoU with the promoters of Kidney Island Energy Free Trade Zone project in Port Harcourt, covering “tourism, civil construction, oil and gas, estate development, marine transportation, infrastructure and Pharmaceuticals.” It also will construct over 10, 000 housing units in Abuja, Lagos and Port Harcourt.

  • “Bolgár Great Wall,” Népszabadság (Budapest), 21 September 2011

Chinese carmaker Great Wall introduced its first European-made car, to be produced in Bulgaria at a new plant employing 2,000 workers and costing 80 million euro.

  • Floyd Norris, “As pattern shifts, China’s surplus falls,” International Herald Tribune, 17-18 September, p. 12.

China’s foreign-trade surplus has fallen by a third since 2007. It now has a deficit not only with a number of resource-exporting countries like Brazil and Australia, but also with Germany and Ireland.

The loan was offered by the China Development Bank at the China-Caribbean Forum that took place in Port of Spain, and is to be used for infrastructure development.

  • 中国将向肯尼亚提供1560万美元紧急粮食援助 (China will provide $15.6 million in food aid to Kenya), Xinhua, 25 August 2011； 中国累计向非洲之角国家提供4.432亿元援助 (Chinese aid to Horn of Africa countries totals 443.2 million yuan, 国际在线, 18 August 2011 (via World-Story)
  • “Cambodia shrugs off aid curb,” Asia Times Online, 23 August 2011 (via China Global); Toh Han Shih, “” Controversial Chinese projects in Cambodia bow to public pressure,” South China Morning Post, 3 September 2011

The World Bank announced that it will suspend further lending to Cambodia because of the evictions accompanying the Lake Boeung Kak project. The project’s investor, Erdos, has pledged to invest a total of $3 bn on property development, metal processing and power generation, far more than the World Bank’s Cambodian portfolio. Nonetheless, days after the announcement, Prime Minister Hun Sen ordered the allocation of 12.4 hectares of land for the evicted families.

The three big Chinese oil companies (Sinopec, CNOOC and CNPC) have all sustained major losses in their overseas acquisitions in recent years. This year, CNOOC and CNPC have been forced out of planned deals in Ghana, Indonesia, and Canada, but in the light of this analysis it may be better for them. The article quotes various company managers and experts as saying that the acquisitions go through anyway because they are seen as representing national interest and as learning opportunities. Other more critical experts say that losses are an inevitable consequence of legal constraints, lack of experience, and unclear responsibility.

  • “Laos in top ten Chinese new investment destinations,” Vientiane Times, 18 August 2011 (via China Global)

According to a report on the website of the Ministry of Commerce of China, “from January to May this year the value of China’s newly signed foreign contract projects reached US$55.98 billion, up by 23.2 percent year on year. The top ten countries and regions in terms of value of newly signed contracts with China were India, Hong Kong, Laos, Pakistan,
Kazakhstan, Bahamas, Malaysia, Angola, Nigeria and Algeria.”

  • PKU African Tele-Info reports in its No. 55 (16 August 2011) that the Chinese Academy of Social Sciences has been commissioned by the Ministry of Commerce’s Department of Foreign Aid to carry out research on “improving the management and protection of Chinese youth volunteers abroad.” Interestingly, the project is headed by Zhang Min of CASS’ Europe Research Institute.

A feasibility study for the Cambodia-Vietnam portion of the Pan-Asia Railway by an institute under the Chinese railway ministry estimates the cost at $686 million, of which “China has offered to contribute $500 million.” The article does not mention what form this contribution would take.

According to the report, four Khmer workers were tortured by a Chinese manager at the Pheapimex-Wuzhishan joint venture plantation in Pursat Province, Cambodia. The manager hit them with stick and electric-shock stick, causing serious injuries, as punishment for instigating a violent strike that allegedly destroyed company equipment such as tractors. The four men deny these accusations. The case is now at the provincial court.

  • 中国投资促进柬矿业发展 (Chinese investment helps Cambodian mining development), Phnom Penh Evening Post 金边晚报， 6 July 2011

According to the head of the Cambodian mines authority, there are currently 70 mining companies active in Cambodia, of which 17 are from China. These have 38 mining projects.

Ecuador’s government on Monday signed a commercial loan agreement for $2 billion with China Development Bank.

  • Hydropower Dams Fuelling Conflict in Burma,” Burma Rivers Network, 15 June 2011

“Fighting broke out between the Burma Army and the Kachin Independence Organization (KIO) last week at the Dapein No. 1 and 2 dams, which are being constructed by China’s state-owned Datang Company, breaking a 17-year ceasefire. Scores of people have died and 2,000 refugees have fled to the China border. Burma Army had brought in hundreds of troops to secure the Dapein dams located near strategic KIO military bases. Fighting has now spread and clashes broke out yesterday” with the Shan State Army-North near the Shweli 1 Dam in northern Shan State. The army has also been dispatched to the Ywathit Dam site in Karenni State where a series of dams are also planned byDatang “on the Salween River and its tributaries. The Karenni armed resistance is active near the site and in December 2010 attacked a convoy of trucks transporting equipment to the dam. “Last month, four Chinese dam technicians disappeared from the Tasang Dam site on the Salween.”

The Hungarian news agency reports that the Polish government cancelled a contract with China Overseas Engineering Group (COVEC) to build 50 km of a Warsaw-Lódz highway for the 2012 European football championship, because COVEC failed to provide guarantees for further financing and a schedule of payments for outstanding commitments. Construction has started, but stopped because subcontractors have not been paid on schedule. The Polish roads authority, GDDKiA, has announced that it will demand compensation. COVEC is one of the largest Chinese overseas contractors, and the project is important since this is the first road construction contract in the EU won by a Chinese company.

Recent Chinese migrants in Brazil have been buying land as “holiday farms” （度假农场） as well as for investment.

  • Electric Stations, China’s Sinohydro sign protocol-intention on construction of Suusamyr-Kokemeren cascade of hydropower plants,” AKIpress, 1 June 2011 (via International Rivers)

Sinohydro plans to begin construction of this cascade in Kyrgyzstan at the end of 2012 or at the beginning of 2013. Construction will last for 5 years. Sinohydro is expected to invest $2 billion.

  • 中国中铁将承建中缅铁路项目(China Railway will build China-Burma railway project), 中国证券报 | 2011-05-27

China Railway Group 中国中铁 signed an MOU with the Burmese government to construct the 810 km railway from Ruili to the port of Kyaukpyu.

The company, a food manufacturer, was also required to pay 150 thousand for the deportation costs of the workers. Rongcheng is near Weihai in Shandong province. The workers were introduced to the factory in 2010 by two “snakeheads” (human smugglers) — one from Henan and another from Burma — as workers from Yunnan. Local police inspecting the plant did not suspect them of being foreigners because they spoke good Chinese, but later received a tipoff from Yunnan police. Previously, Burmese workers were reported mostly in the southern provinces, so the process is similar to the migration of illegal Mexican workers from the southwestern states of the US to the midwestern meatpacking plants.

Of the six overseas oilfield exploration licences obtained by Sinochem until 2009, two have not moved past the feasibility study, while three others have run up a loss of $1.5 million. Other major Chinese oil companies have similar problems. This is related to rising operating costs, plus — according to one expert — Sinochem’s policy of acquiring controlling stakes, which exposes it to more political risk.

The Fund started its Sudan project in 2010, and has since build a model mother-and-child hospital with an investment of $700 thousand, donated medical equipment to a Sudanese organisation called BTO headed by a vice-president of the country, and organised trainings for Sudanese officials and “NGO leaders.” These included trips to Yunnan Province to study how the Fund cooperates with the Chinese government in poverty alleviation projects.

China Overseas Contractors Association 中国对外承包工程商会 released its 2010-11 annual report. At the end of 2010, there were 847 thousand Chinese contract workers abroad, the report says.

A report by the U.S. Asia Society estimates that China’s investments in the U.S. are likely to continue to grow at a pace of 100-130% a year. Zhang Dongsong, A vice-president of the China Foreign Trade Promotion Committee 中国国际贸易促进委员会 said that the cumulative total FDI of Chinese companies is $260 billion, while the yearly investment rate is currently $60 billion. There are 13 thousand foreign subsidiaries of PRC companies.

Eximbank and the Cambodian ministry of finance signed an agreement on a $52 million concessional loan to develop irrigation systems in Oddar Meanchey, Siem Reap and Bantheay Meanchey provinces.

  • Liz Gooch, “Mainland China university to open Laos branch in 2012,” International Herald Tribune, 9 May 2011

People’s Daily has reported that Suzhou-based Soochow University is the first Chinese university to open a “branch campus” abroad, in Laos. It is to provide courses for 5,000 Lao students.

Yang Shengming, a senior official at the Chinese Academy of Sciences, has suggested that China should cooperate with Thailand to build a new canal through the Isthmus of Kra (the narrowest point of Southern Thailand) from the Pacific to the Indian Ocean. Yang argued that like Spain, the Netherlands, Britain and America in the past, China can only become a “real trade power” (真正意义上的贸易强国) via the seas.

Chinese contractors in Africa are having trouble sustaining growth without direct investment. Most companies are now contemplating BOT projects, but none have yet contracted one.

Speaking at a “female capacity building seminar for developing countries,” Fujian Province Foreign Trade and Economic Cooperation deputy director Chen Ansheng said developing countries should promote gender equality in sectors such as agriculture, education, health in order to develop sustainably. Participating countries included, Nigeria, Kyrgyzstan, Cambodia, Palestine, Pakistan, Ethiopia, Malawi, Namibia, Ghana, Iran, Iraq, Uganda, Kenya and Zambia.

The Lao subsidiary of CAMC Engineering (中工国际）signed a contract to develop the Mekong riverside area of Vientiane. The investment value is $355 million. In the past ten days, CAMC has also won contracts to build a road in Zambia, two farm projects in Angola, and an airport in Chad. The Mekong embankment in Vientiane has been under redevelopment by what seemed to be Korean real estate companies for some time. This is the first major Chinese real estate project in Vientiane after the scrapping of the That Luang project, which was contracted in exchange for a Chinese-built stadium and generated huge resistance because of its location. (Personally, I am more sorry for the riverside.)

Sichuan-based Linhai Group  林海集团 has signed an agreement with the Lao government to invest $960 million in a Lao satellite communication industry park. It will launch a satellite on a trajectory allocated to Laos. The plan includes research, education, and manufacturing facilities, to be completed in 2015 and to employ 10 thousand locals. Laos currently has no trained personnel and no existing industry parks, let alone in satellite communications, so it is likely that all of the skilled staff will be Chinese.

Sinohydro, China Development Bank and Electricité du Laos signed an agreement on a $1.8 billion loan.

Among others, in this CSR report on Burma, China National Petroleum Corporation says that villagers on 马德, the Gulf of Bengal island where it is building a port that will be the starting point of the Burma-China pipeline have already received around $810 thousand in compensation. CNPC has also provided drinking water to villagers at designated times, and subsequently built a reservoir. In addition, it has donated $600 thousand of disaster relief aid after the various natural disasters in Burma in the past three years, presumably to the government; and donated medical equipment to the Kyaukpyu hospital. As for a culturally sensitive relationship with locals, Chinese and Burmese CNPC workers are said to have done volunteer work together rebuilding Buddhist temples. The report says Chinese workers have helped the families of Burmese workers in economic difficulties and presented lonely old people with consumer products.

Cameroon’s government has announced that it secured a $542-million loan from the China Import-Export Bank to fund the construction of a hydroelectric dam on the Ntem River. In separate news, indicating the return of Western development agencies to hydropower funding, China Three Gorges Corp. (CTGPC) announced Friday that one of its subsidiaries, China International Water and Electric Corp., will build the Lom Pangar Hydropower Project, a contract worth 198 million U.S. dollars, jointly funded by World Bank’s International Development Association (IDA), the French Development Agency (AFD) and the European Investment Bank (BEI).

The Honduran government and Sinohydro signed a contract worth $50.5 million to construct a hydropower plant in eastern Honduras, the first of three agreed on in an MoU.

The Lao government and Sinohydro signed a master plan for building two major reservoirs and seven hydropower plants along the Nam Ou river with financing from the China Development Bank.

Burma closed the Laiza border crossing again on 30 March. One Ruili company alone has 15,000 tons of banana stuck in Burma. The article suggests that most Chinese banana growers operate in Burma under contract farming agreements. The companies have sought the intervention of the Yunnan Province government.

Taiyang Paper is investing $200 million in a 10 thousand ha plantation (mostly under contract farming agreements) and a pulp-paper plant in Laos.

The port is being built using a $28 million concessional loan from the Chinese government.

The Yunnan Xiaoxiang Pan-Asian Investment Company 云南潇湘泛亚投资有限公司办公室, formerly known as Xiaoxiang Co., announced it would hold the groundbreaking ceremony for the Lao portion of the Pan-Asia Railway on 25 April in Vientiane, at the Dongchang Hotel. It also announced that the railway is now planned for a speed of 180 km/h, in contrast to the earlier target of 120 km/h, and would thus be a high-speed railway. The article praises previously unknown Xiaoxiang for injecting “new blood” into the “going out” effort of China’s railways and for raising the profile of private enterprises generally.

“Some 10,000 people living at the Boeung Kak lakeside” in central Phnom Penh “have been given a deadline of next week to leave their homes or be forcibly removed, raising the prospect of what could be the largest single forced eviction in the Kingdom’s recent history. … Local developer Shukaku Inc, owned by ruling party senator Lao Meng Khin, received a 99-year lease in 2007 to develop the lake and has since partnered with China’s Inner Mongolia Erdos Hung Jun Investment Co on the project in a joint venture. … [V]illagers have denounced as insufficient the proposed compensation options: US$8,500 cash, housing in Dangkor district and two million riel ($495), or on-site relocation, the plans for which have yet to materialise.” Protesters clashed with police a few days earlier.

Investors from Guangxi are cultivating sugarcane 30 thousand mu (2,000 ha) in Vietnam.

Protesters led by the NGO Friends of Lake Turkana were scheduled to deliver a petition, “signed by more than 2,000 organizations and individuals, to the embassy of the Peoples Republic of China in Nairobi” on Sunday, “seeking the intervention of the Chinese government to either bar or advice the companies against involvement in” the Gibe III dam.

The plan is to create a “dry canal” where the Pacific port of Buenaventura would be linked by rail, across Colombia, to the Atlantic Coast.

According to the Kachin Development Networking Group, the Burmese military authorities are preparing to relocate 60 villages from the sites of a number of hydropower projects in Kachin State, incuding the Myitsone dam, which Chinese media refer to as the “Three Gorges of Burma.” Asia World Company, which cooperates with the state-owned China Power Investment Corporation (CPI) on the dams, is constructing houses for villagers to be relocated. Asia World is owned by Lo Hsing Han, the ethnic Chinese former opium boss from Kokang who is one of the junta’s close business associates. In separate news, it has also partnered with China Port Construction and San Yi Zhonggong (3-1 Heavy Industries), a company from Changsha, to construct the new airport of the capital, Naypyidaw.

  • 中国水电集团承建的缅甸耶瓦水电站竣工 (Sinohydro begins construction of Yeywa Hydropower Plant), Ministry of Commerce press release, 21 December 2010

This project on a tributary of the Irrawaddy, described in the press release  as “Burma’s Three Gorges,” is the largest dam construction so far in Burma and currently Sinohydro’s largest overseas turnkey project.

The Tatai dam in Cambodia, built by Gezhouba, has begun operation, inaugurated by Prime Minister Hun Sen.

The author, an editor for Phoenix TV, writes that there are 20 thousand Chinese in Botswana. Oriental City outside the capital is a Chinese market manned mostly by Fujianese vendors. There are also numerous construction workers. The public image of Chinese is not as favourable as of Indians (not clear whether these are also recent immigrants or local Indians), as they are not involved in local activities, but some want to change this, for example by setting up an English-language newspaper or donating to an orphanage. Overall, the situation seems very similar to Eastern Europe.

The ceremony for the “China-Africa Friendship Award – The Top 10 Chinese Enterprises in Africa” was held in the Great Hall of the People in Beijing on Tuesday. The winners were supposedly decided by online votes, but “Petrochina, China Railway Construction Corp and ZTE,” which were given the award, “were barely able to attract a few hundred votes from the public while virtually unknown companies like Touchroad Group and Anhui Foreign Economic Construction Group received well over 6m votes each. … [T]he enterprises that won the award were expected to contribute to a new Rmb5m “China Enterprises’ Charity Fund to Africa”.

SASAC (the State Assets Supervisory Commission) issued a “Notice on regulating individual holdings of central enterprises abroad” (央企业清理规范境外投资中个人代持产权有关问题的通知). The notice requires central state enterprises to bring under control various holdings abroad that are in the name of overseas branches, public-listed subsidiaries, or individuals. Two interministerial commissions have been set up this year to work out new regulations to reduce the risks associated with overseas investments, change approval procedures (including increasing the limit of investment at which SASAC approval is required by a factor of ten) and clarify ownership. The article stresses that the aim is not to slow down overseas investments, but the measures seem to show concern about excessive losses and insufficient central oversight, notably over “prestige projects” that are economically questionable but politically important for company leaderships.

  • “Digging with the dragon,” Economist, 18 December 2010, pp. 120-121.

On December 3, Rio Tinto announced a joint venture with Chinalco to explore for ore in China. Earlier, it entered into a joint venture with Chinalco at Simandou, an iron mine in Guinea. The article calls this buying political protection (the Guinean government stripped Rio of half its leases at the site two years ago, and “it would not dare to treat China this way”) and getting cheap capital plus possible infrastructure (railways) from China. Chinalco already is Rio’s biggest shareholder, but an attempt to double the stake failed as a result of Australian regulatory resistance, and is generally described in China as the biggest acquisition failure of Chinese companies abroad in recent years.

  • “Another Balkan candidate,” Economist, 18 December 2010, p. 48.

According to the article, a plan to build four hydropower plants in Montenegro to then export electricity to Italy has become a major political issue in the country. Presumably, the dams would be built by Chinese companies, which have already been active in hydropower in Albania.

The East Timor government “removed the Beijing-owned Chinese Nuclear Industry 22nd Construction Company from responsibility” to install two second-hand Chinese oil-fuelled power plants and asked an Indonesian company, which was registered in Hong Kong just five weeks earlier, to finish the work. The change was made after an Italian company filed a report on the project that alleged poor safety practices and “acts of ‘environmental negligence'”. “While government leaders claimed the project would provide 20,000 jobs for Timorese, the Chinese company had hired only 155 Timorese workers by May this year. Dili residents say that hundreds of Chinese workers brought to Timor to work in electricity and other projects have caused social tensions among impoverished Timorese, particularly in Dili, where Chinese have fought local gangs on the city’s streets.”

The pipeline construction complements a port construction by India.

The World Bank has provided a security guarantee for the $1.5 billion Nam Theun 2 hydropower project in Laos, inviting criticism from environmental NGOs. This marks a return to dam financing after a ten-year hiatus, clearly in response to the fact that dam construction has been booming thanks to financing by Chinese policy banks. The World Bank pitched the project as “an example of how hydropower can help support development in an economically, environmentally and socially sustainable way,” implicitly suggesting that the transparent accounting of energy sales revenues from this project sets a standard that other (i.e. Chinese) financiers are yet to live up to.

CAMC Engineering (Zhongguo Guoji), the Shenzhen-listed international contracting arm of 中国机械工业集团, signed five contracts with 委内瑞拉农业公司 (Venezuela Agriculture Company, a state enterprise under Venezuela’s ministry of agriculture and lands) and the 国家农村发展署 (State Rural Development Authority) of Venezuela. The total value of the contracts is 7bn yuan, more than twice the total sales volume of the company in 2009. The contracts include developing a food processing industry park, the “overall development” of agriculture in the Orinoco delta, the second phase of “overall agricultural development” in 第斯那托斯 (Desnatos?), an “overall agricultural project” in 皮里度-贝塞拉 (Pirido-Bercela?) and the reconstruction of the 瓜里科 (Guarique?) River irrigation system. The contracts still have to be approved by the two governments. CAMC’s main profile is engineering contracting.

China Non-Ferrous (Zhongyouse) is the Chinese partner in the Zambia-China Economic Cooperation Zone, the first of China’s government-backed overseas development zones. According to the article, there are now 13 Chinese companies in the zone, with a total investment of  $1bn and 6,300 local jobs. A Lusaka “branch zone,” next to the airport, is being set up. The GM further said that his company was pioneering “green production,” an example of which is the installation of glass roofs in order to use more solar energy. As an example of corporate social responsibility, Luo said that in November the company gave the Zambian government the equivalent of $220,000 for road construction and AIDS prevention, and committed to spend $1.3 million in the next four years on charity. The company has also donated sewing machines to workers’ families to help increase family income, and provided AIDS and malaria drugs.

  • “Zhongtie jukui diaocha” (An investigation of China Railway’s gigantic loss), Reuters Chinese service, 29 November 2010

This report provides further details on the Mecca Light Railway case (see below), which cost the chairman of China Railways 18th Bureau his job and prompted the head of China Railway Construction — according to the article the largest international construction contractor in the world — to move to Mecca for several months to supervise the project personally. According to this report, the losses were mainly because of differing interpretations of the contract, which resulted in the last six months in a fourfold increase of the amount of work. This necessitated the subcontractor — China Railway 18th Bureau — to bring nearly ten thousand additional workers from all other bureaux in order to complete the project on time according to Saudi demands. This was seen as a must at any cost, because top Chinese state leaders had visited the project several times. Another source of losses were the difficulties created by local authorities, some of which saw the contract — which China Railway won over a Saudi bidder — as hurting their interests. Changes of plan along the way are common: another offshot of China Railway got into a legal dispute when undertaking a contract for the construction of Palm Island in Dubai. The article reveals some other interesting details: because of regulations concerning the “holy places” of Islam, all workers and managers had to be Muslim, which meant a scramble to recruit workers in Xinjiang and Ningxia. In addition, 16 Chinese workers struck to demand more overtime pay for working during the hottest noon hours; they were fired. A Chinese businessman in Saudi Arabia commented that strikes by Chinese workers over working conditions are commonplace. A final problem is Chinese contractors underbidding each other, reckoning that even a loss is acceptable as long as it keeps workers in their jobs, both overseas and in China.

According to China’s Ministry of Commerce, “China’s outward direct investment (ODI) grew 1.1 percent year on year to $56.53 billion in 2009, compared with $2.8 billion in 2003. … By the end of 2009, China’s accumulated ODI had amounted to $246 billion, … 1.3 percent of the world’s total. … In the first nine months of this year, China was responsible for 49 outbound mining and metal deals, soaring 108 percent from a year earlier, said a report by the international accounting firm Ernst & Young. … Chinese companies generated $10.6 billion in tax revenues and created 438,000 jobs outside China in 2009, said the MOFCOM report. … Since 2000, Chinese companies have built around 70 million square meters of houses, 60,000 km of railways and power generating units with an installed capacity of 3.5 million kw in Africa. Meanwhile, China has extended $11.2 billion in credit to African countries in the past decade.”

A Chinese consortium including the Southern Grid (Nanfang Dianwang), the Sanxia Group and Sinohydro signed an MoU to build the largest hydropower plant of Southeast Asia, the Mong Tung 孟东dam on the Salween in Burma, near the Burma-China-Lao-Thai border. The MoU says that the dam will be developed jointly by Burma, China, and Thailand, with the Chinese partner holding a 56% stake.

The article profiles 河南国际合作集团有限公司, or Henan International, which got a concession to develop a 558 square km aluminium mine in Guinea this year. Talking about the company’s strategy, CEO Wang Jianxin 王建新 recalled that ten years ago, they got a contract to build a 112-km road in Tanzania, and took it despite a projected loss of $5 million. This earned the praise of the Tanzanian government, which subsequently “helped” them get more contracts. This case, according to Wang, demonstrates that, for the company, reputation comes first: “We cannot let our Henan people lose face.” Wang also mentions that the company’s projects in Africa largely rely on contractors; each project has just a dozen actual company employees. As an example of employees’ dedication, Wang cites the example of a man from Hebei in his twenties who was stabbed to death “defending national property from theft by local Blacks.”  Although traditionally a construction contractor, the company has been expanding into iron and copper mining in Zambia and Tanzania.

The Zambia branch of Bank of China approved a 10 billion yuan credit line to support five daughter companies of China Nonferrous Group (Zhongguo Youse Jituan) active in southern Africa.

On the occasion of Chinese heir-apparent Xi Jinping’s visit to Angola, the article describes Angola’s largest residential real estate development, the 西安居住, in 凯兰巴凯亚, 40 km from Luanda. 700 apartment buildings are planned by CITIC”s construction arm on an area of 9 square km, with a planned population of 20,000. President Dos Santos has visited the development twice and expressed his satisfaction. In a meeting with managers of Chinese-invested companies, Xi said that these “still have some problems with product quality, labour management, and the protection of local workers’ rights.”

“Chinese and Cambodian officials this month signed a $591 million loan  package — Cambodia’s biggest ever — from the Bank of China” for a telecommunications company that is competing with Vietnamese- and Thai- invested companies. This is thus a commercial loan from a commercial bank. China also cancelled $4.5 million of Cambodian debt and announced that it may cancel a further 200 million.  The article mentions that development has started on the largest ($3.8 billion) investment so far, a vast resort complex near Sihanoukville  by the Union Development Group of Tianjin to be marketed mostly to Chinese buyers. Pomfret profiles a manager for the company, originally a trader from Northwest China who ran a noodle stall before being recruited by the construction project.

The executive vice-chairman of the Chinese Mining Federation, Zeng Shaojin 曾绍金, said that, in the past 18 months, 280 Chinese mining companies have invested in 302 projects in 53 foreign countries. Over 60% of the investment went to Australia, Canada, the Philippines, Indonesia, and Brazil (i.e. not the most talked-about African or Mekong countries).

Following comments made by Xi Jinping (see above), Global Times writes that “Chinese companies have to rethink the way they adapt to local cultures and better handle labor relations when they extend their businesses into foreign countries.” Citing a local union in Zimbabwe that “declared war on Chinese construction companies there,” the article concludes that “overseas Chinese companies have to bear in mind that a mature multinational has to shoulder an equal share of social responsibility.” As part of a turnaround by official English-language media in China, they now assertively tackle accusations of neocolonialism by China rather than shirking the issue.

Over 50 large Chinese state companies and 400-500 private companies operate in Angola, and the number of Chinese entrepreneurs and workers is around 100 thousand, according to the article. The Chinese ambassador to Angola said that, although the 2009 recession stopped many infrastructural investments, none of the large Chinese companies reneged on their contracts. CITIC raised $450 million in China in order to continue its real estate project (see 20 November). The reconstruction of the old Karenge district of Luanda, whose foundation stone was laid by President Dos Santos in November, is being done by a private Sichuanese company, Haishan International Group, which also has two other projects in Angola. Sinohydro has projects in 18 Angolan provinces, and the 20th Bureau of Chinese Railways is building two railways with a total length of 1,750 km. In 2010, the Angolan government transferred the ownership of the railway project, CITIC`s real estate project, and the port reconstruction being carried out by China Ports and Bays to Sonangol, the state oil company, which means that the servicing of the total debt of $1 bn owed for these projects will now be the direct responsibility of the oil company (and done in nature). As of this year, Angola is China`s largest oil supplier.

The Chengdu branch of Eximbank extended a $1.5 bn loan to Hanlong, a private mining corporation, to support overseas acquisitions. The first instalment was used for the acquisition of a molybdenum mine in Australia; talks are underway about the acquisition of another molybdenum mine in the U.S.

The first instalment of a $1 million loan was issued by CDB’s Cairo branch to an Egyptian-registered company, 旺奇照明公司. The company, presumably Chinese-invested, is privately owned and manufactures light bulbs. The loan’s interest is much lower than those available from Egyptian banks. The loans are part of a promise by Premier Wen Jiabao to provide $10 bn in preferential loans to Africa, of which$1 bn to SMEs. So far, CDB has reached agreement on loans worth $300 million in Africa. CDB opened its Cairo branch — its first overseas branch — in 2009 and has since reached an agreement on joint project development with the National Bank of Egypt.

“The Mecca Light Rail, constructed by the China Railway Construction Corporation Limited (CRC) for Saudi Arabia, will become operational on November 13. Zhao Guangfa, president of CRC said within the company that this project was more a political mandate than a commercial project. .. The CRC has finished the task, but it has cost them 4.15 billion yuan in losses. … CRC … was recommended by the Ministry of Commerce to construct the railway. It negotiated directly with Saudi Arabia on pricing the project… instead of inviting a public bi[d]ding. … This is the largest loss Chinese enterprises have ever suffered on an overseas project. The CRC had earned a net profit of 3.37 billion in the first half of this year, but suffered a 1.36 billion yuan loss in the third quarter because of the Mecca Light Rail, dragging its revenue down 193.52 percent from the same period last year. … The CRC did not dominate the design process for the Mecca Light Rail. The infrastructure was based on an American standard while its railway system was based on a European standard. All sub-contractors were chosen by the” Saudis. “Even wall color had to be approved by the vice minister of municipal-rural affairs. … according to a source from the CRC, the Chinese government will support the CRC’s request for compensation. … Some insiders have said that … the core reason [for the losses] lies in the CRC’s inadequate evaluation of potential risks. It lacks experience in constructing overseas projects based on American and European standards and has done a poor job in reducing risks in drafting contracts. But the root of the failure lies in the crude organization and working habits the CRC formed when constructing railways at home.”

Since the entry of Chinese commercial banks into the financing of overseas projects, pressure has been growing to create rules for separating “policy functions” and “commercial functions” of policy banks such as the Eximbank, which since 2006 has also been granting non-concessional loans. (China Development Bank is also being restructured, as another article reports.) Advocates of this reform, including the Banks Supervisory Commission, say that there could be two criteria in deciding whether a loan was “policy related:” whether it receives risk compensation from the government and whether commercial banks are also willing to underwrite it. The separation would be in line with Western demands that China separate its commercial and aid activities, but the direct impetus seems to be commercial banks’ opposition to the role of the Eximbank as both regulatory authority and commercial actor in the overseas loan market. Oppponents of the reform, such as Eximbank head Li Ruogu, argue that it is hard to separate policy and commercial functions, since many projects receive a mixture of concessional and commercial loans.

  • Will Connors, “China, Ghana agree on loans, deal,” Wall Street Journal, 25 September 2010

Eximbank has signed a $10 bn infrastructure loan agreement with Ghana. Separately, China Development Bank offered a $3 bn loan for the oil and gas sector. Ghana is preparing to begin oil production this year, and CNOOC has bought a stake in a major Ghanaian oil field, outbidding Exxon. Separately, Bosai Minerals has signed an agreement for a $1.2 bn investment in a bauxite and aluminium refinery. Finally, CDB also offered a $400 million loan for water and “e-governance.” Together, this is China’s biggest Africanloan package so far. The article notes that, last month, CDB extended a $1 bn infrastructure loan to Ecuador, and in April signed a $20 bn loan agreement with Venezuela.

  • Hu Yue, “Eyes Abroad,” Beijing Review, 23 September 2010 (via China Wire)

China’s outward direct investment reached $56.53 billion in 2009, said a recent Ministry of Commerce report. By the end of last year, Chinese enterprises had established at least 13,000 companies in 177 countries, said Shen Danyang, a MOFCOM official. The article profiles Chinese renewable energy companies setting up branches in France and Italy.

Guangxi Nonferrous Metals Group “is looking at nickel assets in Indonesia, and has established representative offices in Laos to scout for potash, tin, gold, zinc, lead, copper and antimony projects. The company signed six agreements for resource projects overseas worth 5.35 billion yuan ($787 million) on the sidelines of the China-ASEAN Mining Cooperation Summit Forum last Monday. This included iron ore and gold projects in Cambodia, a tin venture in Laos, a manganese project in South Africa and a tungsten antimony project in Mongolia.” The company plans to “list the Cambodian iron ore project, valued at 2 billion yuan, in Hong Kong. … Established in 2008, Guangxi Nonferrous Metals Group consists of six local State-owned enterprises, including Liuzhou-based China Tin Group.”

The controversial suggestion to purchase farmland overseas is being mooted again after official denials, this time by a vice president of School of Agricultural Economics and Rural Development at People’s University.

Venezuela and China signed an agreement to set up a joint venture to invest in agriculture (rice, wheat and soybeans) and food processing (pork and fish) in the Orinoco oilfields in Eastern Venezuela (sic).

In Cambodia, China’s foreign direct investment hit a total of
eight billion dollars this June.

  • Han Fangming 韩方明, 中国不“傲慢” (China isn’t arrogant), Nanfang Ribao (Canton), 2 July 2010 (via Minjian International)

The article, by a researcher from Peking University’s Centre for Research on the Progress of Modernization 北京大学世界现代化进程研究中心 who is also vice-director of the foreign affairs commitee of the 11th People’s Political Consultative Conference, quotes the latest figures of the annual China Modernization Report. According to it, “in terms of the level of modernization of its economy, society, culture, individuals, and natural environment, China respectively stands in 75th, 77th, 57th, 65th, 100th, and 67 place.” So it is the individuals who are pulling the country down. Apparently even in the index of military modernization, “population quality” is a factor.

Opposition politicians and experts in Ecuador have criticised a 1.68 billion dollar loan from China’s Eximbank, at a 6.9 per cent interest rate, to build the Coca Codo hydropower plant — the biggest Chinese loan in South America so far. Critics say that the installed capacity of the plant has been overestimated, that the interest on the loan is too high, and that the dam is too expensive.

  • 昝春燕, 中非发展基金这半年 (The past half year of the China-Africa Development Fund), 21世纪经济报道 (Peking), 12 June 2010

The CADF was set up in 2006 by the China Development Bank to support the development of basic infrastructure, industry, and agriculture. It is governed by a board chaired by delegates from the Ministry of Foreign Affairs and the Ministry of Commerce. So far the Fund claims to have assisted Chinese companies in investing over $3 bn. The fund often acts as a financial investor and holds minority statkes in projects, but because of its high political standing it can also help procude loans.  In 2010 alone, it has participated in two mining deals (in South Africa and the Congo) and the construction of a cement factory in South Africa, each to the tune of $ 200-300 million. It has also signed an agreement with Yiqi, a Chinese car maker, to provide almost half of $100 million to set up a sales and service network, so far the largest investment by the Chinese auto industry in Africa. Another agreement is with Zhongguanghe, a nuclear engineering company, to develop solar and then other (including nuclear) forms of energy in South Africa. The fund’s priority areas now also include banking and tourism, among others, suggesting a major shift away from the original principles and towards commercially profitable projects. The Fund has also expressed willingness to cooperate with private Chinese investment funds.

China Development Bank (CDB) will provide $100 million loan to Bangladesh to buy telecom equipment from Huawei.

Salini Costruttori, an Italian company, is under attack from environmentalists for proceeding with the construction of the Gibe 3 dam in Ethiopia, with funding from the Industrial and Commercial Bank of China (ICBC) and Chinese power equipment supplier Dongfang Electric Corporation.  ICBC, listed in Hong Kong and Shanghai, adopted the Equator Principles in 2008, but International Rivers says that the dam “threatens the livelihood of 500,000 indigenous people.”  The article contrasts this project with the Merowe Dam in the Sudan, completed in 2008, which was similarly condemned by environmental groups; International Rivers director Peter Bosshard says it displaced 50 thousand people. But Ali Askouri, head of a London-based NGO lobbying on behalf of people affected by the Merowe Dam, said that what he had feared — “that the Sudanese government wanted to uproot our community out of [sic] its traditional land … did not happen. “I have seen the Chinese seriously looking into improving their performance with local communities.”

The article discusses the US$ 10 billion China-ASEAN Fund on Investment Cooperation (CAF), whose creation was announced by Export-Import Bank of China (Eximbank) last year. Another government shareholder, China Investment Corp. (CIC), recently purchased a 21 percent stake. CAF is Eximbank’s first private equity fund, and has announced the goal of raising US$ 10 billion to finance infrastructure development in ASEAN nations. That would “surpass targets previously proposed for the China-Africa Development Fund (CAD), currently China’s largest PE fund in terms of monetary scale. Established by China Development Bank (CDB), CAD’s goal is to raise US$ 5 billion over 50 years.” While CAD is registered in Beijing and subject to Chinese laws, CAF’s manager, Kaifu Investment Consulting Co. Ltd. was registered in Hong Kong, but its key managers come from Eximbank. CAF’s goal is to support individual investment projects in ASEAN countries averaging US$ 50 million. Fund exits are restricted to five to seven years after a project begins.    

 Laos has borrowed 50 million dollars from the Chinese government to build a bridge over the Mekong in Pakbaeng, Oudomxay Province, as part of a new road to the Thai border. The bridge is scheduled to be completed in 2015.

  • “Ecuador, China agree on hydroelectric financing after spat,” AFP, 19 May 2010

Ecuador and China  reached an agreement on a 1.7 billion dollar line of credit by Eximbank for Sinohydro to build the Coca-Codo Sinclair hydropower plant. Ecuador withdrew from the negotations in March after it baulked at the conditions demanded by China, which reportedly included putting up the national bank’s assets as collateral.

  • “China’s Biggest Bank to Support Africa’s Most Destructive Dam,” International Rivers, 13 May 2010

The Industrial and Commercial Bank of China (ICBC), a newcomer in the international infrastructural lending market, has offered a $500 million loan to  Dongfang Electric Machinery Corp., a Chinese state-owned company, for the provision of equipment for Ethiopia’s Gibe 3 Dam. International Rivers, which has in the past years made encouraging statements about China’s improving environmental record in financing overseas dams, described this project as an environmental and social disaster that “threatens the livelihoods of 500,000 indigenous people in Southern Ethiopia and Northern Kenya” and “will devastate the unique culture and ecosystems of the Lower Omo Valley and Lake Turkana, both recognized as UNESCO World Heritage Sites.”

  • “China offers Zambia $1bn for power project,” AFP, 11 May 2010 (via International Rivers)

The China Development Bank (CDB) has offered to provide one billion dollars for a planned hydroelectric station in Zambia and proposed Sinohydro to develop the project. “CDB has helped finance a raft of projects in Zambia, with outstanding loans totalling 112 million dollars” and “has said it could provide financing of up to 1.4 billion dollars for various projects”.

  • “China to Finance Kariba South Expansion,” The Herald (Harare), 26 April 2010 (via International Rivers)

Zimbabwe’s minister of finance, Tendai Biti, signed a range of agreements in China, including memoranda of understanding on hydroelectric projects. “The two parties agreed on the implementation of enablers for economic recovery with support targeted at energy and power development, road and rail rehabilitation, ICT infrastructure and other infrastructure projects.” The article only mentions two small figures — $30 million each — for agricultural development and a fibre optics cable provided by Huawei, suggesting that China may be reluctant publicly to commit large sums, either because of Mugabe’s continued presence, as a snub to his opponents (the MDC, whom Biti represents) or just general instability.

Four bombs  exploded at the Myitsone hydropower dam project site in northern Kachin State on April 17, leaving a Chinese worker injured. There is “speculation that the explosions were caused to put pressure on the KIO [Kachin Independence Organisation] by the Chinese government” as the KIO is going through tense negotiations with the Burmese junta over the control of the border.

  • “Chinese Companies to build Dams Complex in Eastern Sudan,” International Rivers, 8 April 2010

The Sudanese government has approved the construction of the Upper Atbara Hydro Junction Project’s by a joint venture of China International Water & Electric Corporation and its parent company, the China Three Gorges Corporation, with the total contract worth 838 million U.S. dollars, the China Three Gorges Corporation announced on April 7. “Currently, it is the largest single construction project any Chinese company has undertaken in Sudan and also the second largest overseas single hydraulic engineering project signed by a Chinese company.”

International Rivers, an NGO and longtime critic of China’s overseas dam projects, has been invited by Sinohydro to participate in developing its environmental policy. This is likely to be connected to Sinohydro’s plan of an IPO on the Shanghai stock exchange and increasing government pressure for large corporations to adopt environmental and CSR policies. China has also apparently rejected Turkey’s invitation to bid for the Ilisu Dam, which Western agencies refused to finance and which is opposed by NGOs. On the other hand,  ” China Southern Power Grid, which is building several dams in the Mekong Basin, has so far ignored all inquiries from civil society,” confirming the observation that smaller companies not associated with the central government are more impervious to criticism.

The Kachin Democratic Network Group (KDNG) said that Myitkyina Township Peace and Development Council (TPDC) members forced Tan Hte Village PDC Chairman U Aung Bahn to give his consent to  relocate the village, along the Irrawaddy River, ignporing protests by village elders. Local authorities are preparing to relocate about 60 villages from the Myitsone Hydropower Plant project site in Kachin State. The hydropower project will be implemented by China Power Investment (CPI) in collaboration with domestic company Asia World, which built quarters for project workers in early December 2009 and conducted hydrology and water survey tests in downstream Irrawaddy River. They also built houses near Kyin Khan Lone Ka Zwap village, over 20 miles upstream from Myitkyina, for relocated villagers. Over 1,000 people are to be relocated. To date, the Myitsone hydropower project is the biggest in Burma, and several Kachin exile organisations are protesting it.

  • Jonathan Shieber and Wan Xu, “China Consortium Starts Work On Myanmar Hydroelectric Project,” Dow Jones Newswires,  24 March 2010 (via International Rivers)

China’s State Asset Supervision and Administration Commission has announed that Chinese state-owned enterprises have set up a consortium to build a $9 billion, 7.1-gigawatt hydropower station across the Salween River, the largest in Southeast Asia. The Chinese consortium includes China Three Gorges Corp., Sinohydro Corp., and China Southern Power Grid. Thai companies will also be involved. The article points out that the area was secured in the Burmese army’s offensive in Shan State last year.

  • “Ecuador Suspends China Talks For Hydrolectric Plant Financing,” Dow Jones, 18 March 2010 (via International Rivers)

 Ecuador has suspended negotiations with the Eximbank over the Coca-Codo-Sinclair power plant, which has previously been announced as a done deal (see below), because of the “strong” terms it demanded. 

Gezhouba currently gets 36% of its business abroad and projects this to rise to 50% within three years, the highest share of all large Chinese engineering and construction companies, the revamped China Daily reports. It currently has 44 overseas projects – mostly hydroelectric-power
related – and last month signed a 4.97 billion yuan ($727.78 million)
contract with a Kazakhstan company to set up a hydroelectric-power
plant in Almaty.

A Chinese company has signed an agreement to launch and maintain Laos’ communications satellite. (Previously, a Nigerian satellite has been launched by China, but failed after 18 months.)

  • “China silent to appeals from across the globe to halt dam on Irrawaddy River,” Burma Rivers Network, 2 March 2010 (via International Rivers)

Kachin State leaders have delivered petitions against the Irrawaddy-Myitsone dam project to Chinese embassies. The dam will be built by China Power Investment Corporation (CPI), and opponents claim that it might displace 15 thousand people in a rice-cultivating area.

Zambia’s trade minister, Felix Mutati, accompanying President Rupiah Banda on a visit to Peking, gave an interview in which he said that while “Chinese investors account for about 15% of the investments in Zambia’s copper sector …  in the small-scale mining industry the Chinese are a majority.” It is in these mines that accidents frequently occur, but they tarnish the reputation of the big Chinese mines as well. At the same time, Mutati said that while there has been resistance to long working hours an “attitude shift is now taking place in the minds of the Zambians because they can earn a little extra by working over and above their normal expected standards.” Workers at Luanshya, a mine recently sold to China Non-Ferrous Metals Corporation, resisted the sale but their views have since improved as they see how much investment is done, while the “guys on the outside of the fence keep singing the same song about the Chinese. … That is what is critically important. For our people to say, ‘I’m not getting any less money. I’m getting my uniforms. I’m going home in a new bus. I’m going to the hospital and there is medicine now’ — those are the things that really matter to us.”

Over US$23 million of $50 million in signature bonuses payable on China’s $6 billion deal with the Kinshasa government have been stolen according to a probe by a commission set up by the National Assembly. These findings follow growing concerns in recent weeks about the accountability of natural resource deals by Chinese companies in Angola and Kazakhstan. Ahead of national elections in 2011, Congo’s President Joseph Kabila is demanding more jobs for Congolese workers. The Commission has not accused Sicomines, the joint-venture consortium, of wrongdoing, but instead blames the Congolese government and mine company management. The power position of Chinese companies seems to have shifted: Sinohydro put in a bid for a dam within the project, but the bid was judged too high, and an international tender may be launched. Since November 2009, the quality control assignments of all infrastructure projects within the Sicomines framework have been subject to international tendering. Meanwhile, the biofuels project involving the Chinese telecommunications company ZTE that was initially projected to cover 3 mn. hectares of oil palm plantations (and generated much opposition) seems to have been stalled after an initial transfer of 250 ha. Infrastructure projects have also slowed down, and talks with the China Development Bank to finance four universities have failed. CDB has rejected the conditions for a number of other projects as well.

Eximbank is financing 85% of a new port in Sri Lanka, constructed by China Harbour Engineering. According to Sri Lankan media, Chinese investment has totalled $6 billion and exceeded that of all other countries.

  • Toh Han Shih, “Quality issues pose threat to Sinohydro’s global ambitions,” South China Morning Post, 11 February 2010 (via International Rivers)

The article details the troubles Sinohydro has been having getting its listing on the Shanghai stock exchange approved by the Chinese government because of environmental and quality issues, but suggests that the listing will go ahead eventually because of Sinohydro’s strong government connections, and will likely be one of the world’s largest public offers. It notes that “last year, Sinohydro’s international orders … for the first time surpassed its domestic orders. Sinohydro currently has 211 projects in 48 countries including Malaysia’s biggest dam, Bakun. ” The news is interesting both because it shows that different arms of the state bureaucracy have increasingly open conflicts with each other, and these may have repercussions in international politics, and because it suggests that international criticism may even be haaving an impact on Chinese companies’ treatment by the government –although this is hardly the major issue.

  • Ryan Libre, “Proposed dam to flood Burma, while powering China,” Global News (via International Rivers)

This is essentially an activist post to keep the Myitsone dam in Kachin State on the agenda, rather than news, and since it offers no dates it’s hard to determine what if anything is new. The article reports that “Chinese work camps already have been built … and the first truckloads of workers are gearing up for construction. Caravans of Burmese soldiers have arrived
to secure both the dam site and the Chinese labor camps. … Burmese gold miners and loggers from the south also have come north with help from military contacts to start extraction, industrial and commercial enterprises.”

  • Minerva Lau, “A tale of two ECAs,” Project Finance International,  2 February 2010 (via International Rivers)

A review of new activities by the Eximbank. These include, among others:

funding the power plants being built by the Indonesian state power generation company Perusahaan Listrik Negara (PLN);           

 construction of a biomass power project by Asea One Power with the state-owned National BioEnergy China as contractor (National BioEnergy is owned by the State Grid of China, which also has contracts for running part of the Philippines’ electricity grid);

 funding a recently agreed project to build a US$2.5bn 2,000km crude oil and natural gas pipeline from a Burmese port to Yunnan. 

  • “Disputed dam fuels Ethiopia-Kenya border attacks,” People’s Daily, 27 January 2010 (via International Rivers)

This report from Xinhua is noteworthy because it reports on a land dispute between Ethiopian and Kenyan border dwellers has been exacerbated by Ethiopian plans to build a dam, partly under an MoU with Sinohydro. The report reproduces at length arguments against the dam by Kenyan environmentalists, NGO activists and the local Catholic clergy, and gives no space to Ethiopian government or pro-dam arguments.          

  • Ying Wang, “China Huadian Plans $558 Million Hydropower Project in Cambodia,” Bloomberg, 12 January 2010

China Huadian, “one of the nation’s five biggest electricity producers, plans to build a $558 million hydropower plant in Cambodia in the company’s largest push to expand its overseas hydropower operations.” The dam will be financed by Eximbank. The plant, “to be the largest in Cambodia, will be located 180 kilometers (112 miles) west of the capital Phnom Penh”.       

  •   Franz Wild, “China’s Sinohydro in Talks to Build $300 Million Dam in Congo,” Bloomberg, 21 September 2009 (via International Rivers)                                         
    • Barry Malone, “Ethiopia signs windfarm, dam deals with China,” Reuters, 23 September 2009 (via International Rivers)

    Ethiopia’s electricity company signed a contract with China Gezhouba Group Company to build the $408 million Genale Dawa 3 hydropower project and another with Sinohydro Corporation to construct the $555 million Chemoga Yeda hydropower project that will be made up of five dams on five rivers. EEPCo has also signed a preliminary agreement with the Hydrochina company for the construction of two wind farms, reserved for emergencies and wholly financed by the Chinese government.

     

     
     
     
     
     
     
     
     
     

     

     

     
     
     
     

     

     
     
     
     
     
     
     

     

     

     

     

     

     
     

     

     

     
     
     
     

     

     

     

     
     
     
     

     

     
     

     

     
     
     
     
     
     

     

     
     

     

     
     
     
     
     
     
     

     

    • “Ethiopia opens 300 MW dam, starts producing 80 MW,” Reuters, 18 November 2009; Brady Yauch, “Ethiopia’s Tekeze dam limps into eration,” Probe International, 23 November 2009 (via International Rivers).

    The Tekeze Dam, built at a cost of $356 million by the China National Water Resources and Hydropower Engineering Corporation, has started operation. Probe International criticizes the project as wasteful and environmentally unsound (danger of landslides). Gezhouba and Sinohydro have agreed to build two of the six other planned hydroelectric projects: the $408-million Genale Dawa 3 hydropower project and the $555-million Chemoga Yeda hydropower project, respectively.

    Arrest warrants have been issued for more than 10 Chinese construction workers rom the Kamchay dam worksite suspected of assaulting two Cambodian traffic police following a dispute. Shu Jiang, Sinohydro’s deputy managing director, suggested that the police may have demanded money. (There have been several violent incidents between Chinese and Cambodian dam workers in the past, and the dam’s general manager had not been satisfied with police action in these cases. In at least one case, the dam’s management decided to take justice in their own hands by sending a team of workers to a Cambodian assailant’s house. — MqVU)

    Ecuador and Sinohydro have signed a contract for the construction of the Coca Codo Sinclair hydropower plant (see March 24). Sinohydro will finance 85 percent of the Coca Codo Sinclair’s construction through the Export-Import Bank of China. The project will cost $1.97 billion. The article reminds readers that in July, Ecuador’s state-run oil firm, Petroecuador, signed an agreement to sell crude to China’s state-owned PetroChina (PTR) for two years, and received an advance payment of $1 billion. Quito is also negotiating with Beijing on a separate $1 billion credit.
     
     
     
     
     

     

     

      
     
     
     

     

     
     
     
     
     
     
     

     

     

     

     

     

     
     

     

     

     
     
     
     

     

     

     

     

Sinohydro is in talks to build the Zongo 2 hydroelectric plant in the western Bas-Congo province,worth about $300 million. Sinohydro is also part of a group of Chinese companies that are investing $9 billion in infrastructure and mining in Congo in exchange for mineral rights.

Employees of Sinohydro contracted to build the Pula dam at Dikgatlhong complain that Chinese key posts are occupied by Chinese who “seem to know little about their job” and “barely understand a single word of English” so that “the safety and the life of workers at the project have been subjected to great danger”  while “hundreds of skilled Batswana from tertiary colleges were roaming the streets…  Another thing the employee alleged is that the workers are not insured. … Dikgatlhong Dam Project Manager, Jing Jinke has rubbished the recent allegations adding that the workers who gave the information were just being a nuisance.”

 

  • “China’s Sinohydro has deal for Cameroon dam project,” Reuters, 31 August 2009 (via International Rivers)

Sinohydro has reached a preliminary agreement to take over the Memve’ele hydropower station in southern Cameroon. Sinohydro is replacing Globeleq/Sud Energie, a British firm that backed out of the project, due to cost 556 million euros ($795 million). According to a manager, “The British firm was to execute the project on BOOT condition, which means they were to build, own, operate and transfer to Cameroon after 20 years. The Cameroon authorities considered this time too long.”

Ghana’s Minister of Environment has “directed the Bui Power Authority (BPA) to submit to the ministry within three months all documents covering the construction” and the environmental and local impact assessment, explaining that the previous government (whose term ended in January) had not carried out sufficiently broad consultations on the project. “Mr. Jabesh Amissah-Arthur, Chief Executive Officer of BPA, disclosed that 1,216 local people had been affected by the project,” which is carried out by Sinohydro. “He explained that some of the affected communities had been resettled and those left were expected to be resettled by the end of the year.” The local chief, Nana Sito, the Omanhene of Banda, “said the construction of the dam has brought about a number of social and environmental problems” and “expressed concern about the indiscriminate manner the Synohdro [sic] Corporation was using natural resources in the area without the permission of the traditional council and the people. … Nana Sito expressed worry about the spate at which people were ‘hired and fired’ by the company and cited an instance when a worker got injured but was ignored by the employers. He noted that most of the workers had been working for the company for almost two years but were still regarded as casual labourers.” The new Ghanaian government is seen by some as less free-market oriented, and the new president has been reluctant to move into the Chinese-built presidential palace, saying it was too lavish (though according to others the real problem with the building is that it is seen to have too much magic).

The agreement was signed between Pakistan’s Ministry of Water and Power and China’s Three Gorges Project Corporation in the presence of President Asif Ali Zardari, who has “sought Chinese assistance in hydel, thermal and
solar power generation projects. … Zardari said China would be the world’s next super power in trade and investment and hoped that Pakistan would become a gateway for Chinese exports to world markets through its ports.

  • “Magwagwa dam implementation plans underway,” Kenya Broadcasting Corporation, 17 August 2009 (via International Rivers)

An MoU has been signed between the Kenyan government and Sinohydro on the Magwagwa Dam Multipurpose Development Project.

  • “Sinohydro, EDL Agree To Build Two Hydro Power Plants In Laos,” Energy Business Review, 14 August 2009 (via International Rivers)

Sinohydro and Electricite du Laos (EDL)  have signed an agreement to build two hydropower plants, Nam Kham 2 and Nam Kham 3, on the Nam Kham river north of Luang prabang,  and a power transmission line from Xiengkhouang to Luang Prabang. The contract is valued at around $559 million. The two hydropower projects may cost around $430 million. 

Reports claim that “roughly 120 Belizeans have been gradually let go for imported Chinese labour” on the $ 105 million Vaca Dam project, allegations disputed by the developer, the Belize Electric Company Limited (BECOL). BECOL, owned by Canadian company Fortis, contracted Sinohydro to build the dam. Sinohydro has been involved in the construction of another dam in Belize, the Chalillo dam, which has been controversial because of environmental issues. BECOL says that the company currently employs 150 to 160 Chinese and 350 to 400 locals, in accordance with the contract that stipulates that Chinese workers will only be brought in for skilled jobs. But a former worker contends that he and four others were fired  to bring in Chinese and Nepalese workers, the latter at wage of US$5 a day, much lower than local wages. (According to the US government’s Trafficking in Persons report, the Nepalese workers were “trafficked” because their documents were withheld by the employer.) In January 2008, about 150 workers protested against low wages. BECOL’s manager said that “Belizeans tend to walk off the job, some claiming that they work too hard for the wages paid.” The interesting twist is that the current employer of the fired worker, who alerted the newspaper, is a retired US judge who now lives in Belize.

  • Ralph Nkomo, “Zimbabwe, China sign US$5 billion deal,” The Zimbabwe Guardian, 3 July 2009 (via International Rivers)

Zimbabwe has signed a US$5 billion loan deal with China’s Eximbank, securing half of the amount the power-sharing government needs “in delivering its Short Term Emergency Recovery Programme (Sterp).” The loan will be used to “boost capacity in agriculture and other key sectors such as mining, tourism, construction and public works.” This is “the largest deal that has ever been signed between the two countries and is secured on various mining and infrastructural development rights,” including equity in a US$40 billion platinum concession. Separately, Prime Minister Morgan Tsvangirai “announced that Zimbabwe had secured a US$950 million credit lines from the Chinese government.” The deal shows that China is unlikely to lose any positions in Zimbabwe in the post-Mugabe era despite its long-time relationship with Mugabe. In contrast, the article notes that “[t]he West has has not been forthcoming with aid preferring to adopt a wait-and-see approach until ‘certain benchmarks’ are achieved.” A recent fundraising trip by Tsvangirai to Western capitals “brought home pledges of a modest US$200 million.” 

Italian company ELC has won the tender for the upcoming hydroelectric power project planned near Debre Markos on the Chemoga-Yeda river in Ethiopia. The dam will be constructed by a Chinese company, Hydro Electro [probably Sinohydro?] for a total cost of 300 million dollar. The funds are most likely to come from a loan from the Chinese Export Import Bank.

This article confirms that a new set of environmental guidelines for overseas investments will soon be approved (see below, 18 March). These will stipulate environmental impact assessment before projects start; inclusion of environmental protection measures such as sewage and waste treatment facilities in all projects; observance of international environmental treaties China has signed and host countries’ or China’s environmental rules, whichever is stricter; as well as compensation for any damage to “the ecology.” It is this last measure that is new and significant, as it makes Chinese companies potentially “suable” by foreign plaintiffs under Chinese law.

Papua New Guinea’s acting Prime Minister Puka Temu apologised for attacks on Asian businesses last week. “PNG police have shot four looters in the Highlands region while in Lae, PNG’s second biggest city, two looters were killed. The trouble started in the capital Port Moresby last Wednesday when an anti-Chinese protest ended in violence and looting. In the same week, PNG workers clashed with management at the Chinese-run Ramu nickel mine in Madang Province, on the northeast coast, after a worker was injured by a tractor.” The article claims that “many in PNG feel an influx of ‘new Chinese’ has squeezed them out of small-scale business. Others complain about working for ruthless Chinese bosses who impose tough conditions.”

  • Reuters, “Mozambique to start building $2 billion dam in 2010,” 15 May 2009 (via International Rivers)

The Export-Import Bank of China (China Exim Bank) is financing the construction of the Mpanda Nkuwa dam. The total $2.3 billion loan package also includes funding for a transmission line from the dam site to the capital, Maputo. According to Africa Energy Intelligence (No 605, 27 May 2009 ), environmental activists from the NGO Justica Ambiental “travelled to Shanghai in 2007 in the hope of dissuading Chinese promoters of the scheme from proceeding with it.”

  • Andrew E. Kramer, “Kazakhstan Bank Stops Repaying Foreign Debt,” New York Times, 25 April 2009

In the same week as the largest bank of Kazakstan, BTA, announced that was defaulting on $11bn of debt, the national oil company agreed to form a joint venture with a subsidiary of China National Petroleum Corporation in return for $10bn of Chinese loans.

  • “Revenge for Sinohydro,” Africa Intelligence, 21 April 2009 (via International Rivers)

Sinohydro won a bid to build the Zongo-2 dam in Congo-Kinshasa, for $ 350 million, with China paying the whole tab, after having lost out on the contract for the Katende dam to India’s Bharat Heavy Electrical (BHE). Sinohydro has been active in mining copper and cobalt in Congo since 2008, forming part of the Groupement d’Entreprises Chinoises (GEC) that also counts the China Railways Group and China Metallurgical Group

The authors of this leading article in the NYT note that in recent weeks, China has been negotiating deals to double a development fund in Venezuela to $12 billion (the fund was established in 2007 with $6 bn, intended for various infrastructure projects carried out by joint venture companies), provide Argentina with access to more than $10 billion in Chinese currency and lend Brazil’s national oil company $10 billion, in addition to the Ecuador dam deal reported here earlier. The authors conclude that “the deals largely focus on China locking in natural resources like oil for years to come. The $10 billion arrangement with Argentina “would allow Argentina reliable access to Chinese currency to help pay for imports from China” and “follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.”

  • Sinohydro gets EUR 282-mln hydroelectric project in Togo, 27 March 2009

International Rivers reports that Sinohydro (the largest hydropower engineering and construction company in China) won a tender for the 282 million euro Adjarala hydroelectric project on the Benin/Togo border. When complete, it will be jointly owned by both countries.

After disseminating the findings of a “Research on Environmental Policies of Investment and Aids [sic] Overseas,” the Chinese Ministry of Environmental Protection, the Ministry of Commerce and the People’s Bank of China announced a plan to issue Guidelines for Environmental Conduct Overseas for Chinese companies as part of the Integrated Policy Packages for Overseas Chinese Enterprises Project (IPP). The IPP project is being implemented by the Global Environmenal Institute, the Chinese Academy of Environmental Planning (of the Ministry of Environmental Protection) and the University of International Business and Economics. “Its aim is to
develop a comprehensive set of guidelines for Chinese companies to
improve their environmental impact overseas. In implementing the IPP
project, GEI seeks to work alongside local NGOs in some of the hottest
areas for Chinese overseas investment in doing case studies by
selecting pilot companies to follow the guidelines.”

  • Yu Hongyan, “Sinohydro wins $300 million order in Sudan,” chinadaily.com.cn, 6 March 2009 (via Internati0nal Rivers)

Sinohydro announced it has won a $300 million order to build 486 km of roads in Sudan.

The foundation stone has been laid for Costa Rica’s new national stadium, donated by China. Costa Rica broke diplomatic relations with Taiwan in 2007.

Two Chinese-Ecadorian joint ventures, Sino-Ecuador (Gezhouba) and Sinohydro-Andes JV, were the only ones to submit bids to finance some 80 to 85 percent of the total money needed tobuild the Coca-Codo-Sincalir hydroelectric project. The project is expected to cost 2 billion U.S. dollars and to generate 35 percent of the total electric power the country needs when it turns into operation. The main creditor to Sinohydro will be the Eximbank, but Xinhua has reported that Ecuador’s president Rafael Correa also discussed financing with the China Development Bank.

  • Xinhuanet, “China Three Gorges Corporation to Accelerate the Pace of Hydropower
    Projects     Overseas,” 22 February 2009 (translated by International Rivers)

China Three Gorges Corporation, China’s largest hydropower enterprise, has signed a construction agreement with Malaysia Sarawak Energy Corporation last October and a cooperative MOU on hydropower project
development with Pakistan this January. In December 2008, “to enhance China Three Gorges Corporation’s overseas expansion capacity,” the company was reorganized and renamed China Water Investment Group Corporation (China Water Investment). “China Water Conservancy and Electric Power Foreign Company (China Water and Power), which has extensive overseas experience in hydropower project construction and management, was established as a wholly-owned subsidiary of China Water Investment.” It is a common practice for state enterprises to split off foreign-based subsidiaries that act as private entities that can raise capital on stock exchanges, while the mother company remains under government control. “China Water and Power’s 2008 turnover of 1.2 billion U.S. dollars makes it one of the world’s largest 200 international engineering consulting design companies. Its current projects are located in Asia, Africa, Europe, the Americas; in total, it has projects in 25 countries and regions.”

East Timor’s parliament voted down a government proposal for a $390 million project to build two oil-fueled power stations, tendered to Chinese Nuclear Industry 22nd Construction Co, on the basis that it would “would entail a withdrawal beyond the amount permitted by existing laws governing the country’s oil revenue-financed sovereign wealth fund.” The article evaluates this as a failure of China’s economic diplomacy in the region. Crook notes that China has financed a new building for the Ministry of Foreign Affairs and

an elaborate new presidential palace is on the way.  … In a seeming quid pro quo, Chinese investors may obtain 50-year land leases in East Timor, where most other foreigners are limited to 30-year deals. That’s encouraged Chinese investment, witnessed in the growing numbers of Chinese-run businesses in Dili ranging from electronics stores to restaurants to bars.

This long article claims that, among the tens of thousands of officials wanted in China on corruption charges, those moving to Southeast Asia are relatively easy to capture because of local governments’ cooperation and the ability of the Chinese police to carry out direct activities. This reminds me of a case in the late 1990s when a Chinese police  team came to Hungary and places ads in local CHinese newspapers encouraging readers to report criminals directly top them so they would be caught and transported to China. (The news raised a bit of a furore in the Hungarian media.) More recently, there have been intermittent claims by human rights groups that Chinese dissidents or Falungong activists have been caught and extradited in Cambodia.

According to this article, Hong Kong-listed Datang, “China’s second-biggest power producer,” has announced that it “plans to explore  the African market as the global financial crisis slows domestic demand for electricity.” Datang is currently building the Stung Atay hydropower station in Cambodia as a contractor for Yunnan International, which in turn has a contract with the Cambodian government.

  • We have updated the Bibliography (Working Paper 1) on 18 January 2009.

It seems that the recession is indeed providing an opportunity for China and its companies to rethink the regulation of overseas projects. This document establishes guidelines for economic, social and environmental responsibility.

This site — run from where? — has a list of Chinese (as well as Thai, Indian and other) companies involved in dam construction in Burma. It reports on the social and environmental impacts and threats of dams as well as the accompanying militarization of the areas of construction. Interestingly, it is not explicitly political, has no content on the junta and no links to opposition websites.

A Peruvian newspaper reports that an unnamed Chinese company wants to build a railway from the town of Iquitos, in the Amazon region, to the Atlantic coast, as well as to upgrade the port of Iquitos and to build a power station in the district of Mazán. Both locations are in the province of Loreto. The article does not explain why the company is interested in this, but it is likely that Amazonian timber and other forest products are at play. Several Chinese railway projects have been announced in the past decade in South America, but to my knowledge none has yet been completed.

Ecuador’s president, Rafael Correa, announced that he was close to an agreement for a $1.7 billion loan from the Chinese government to finance the construction of the country’s largest hydroelectrical plant, Coca-Codo-Sinclaire, in the Amazon region. In addition, the president said that China is ready to take part in
the construction of the Pacific Refinery in the coastal province of Manabi, carried out by the state-run oil firm Petroecuador and Venezuela’s corresponding company, PDVSA. He also said that the Chinese cooperation offer included road construction, a package model familiar from Africa.

Fujian Foreign Trade and Economic Cooperation deputy director Chen Ansheng said developing countries should promote gender equality in sectors such as agriculture, education, health in order to develop sustainably.

Mr Chen was speaking at the farewell banquet hosted by heads of the Fujian provincial department of Foreign Trade and Economic Cooperation for the participants of the female capacity building seminar for developing countries

中化海外投资遇险成本飞涨 地缘政治危机成主因

第一财经日报 | 2011-05-24

Click to access StolenLives-final_Eng.pdf

http://www.rfa.org/khmer/indepth/4_workers_tortured_by_chinese_manager_in_pheapimex_company-07112011210035.html

中国经济网

大唐集团首个海外投资电网项目在柬埔寨正式带电运行

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