People’s Daily cites Burmese dam opponents

December 31, 2010

A recent article in People’s Daily‘s popular-nationalistic offshot, the Chinese-language Global Times, cites concerns by the Shan Women’s Movement and another Bangkok-based Shan exile organisation about the dams built by China on the Mekong. These dams have been the focus of sustained concern in the downstream Mekong countries in the past two years, and blamed for a bad drought. So far the Chinese government has rejected the blame, but as of this year it has begun providing more complete hydrological data to the Mekong River Commission. Prominent Chinese public intellectual Qin Hui, who considers the accusations in China’s address exaggerated, has repeatedly called on the government to give up ignoring the concerns and enter into a reasoned discussion.

Although this article goes on to say that “many” consider these Shan organisations a front for Western interests and to cite Chinese “experts” who reject their allegations, it is nonetheless remarkable that these exile groups are given voice in the mainstream Chinese press in the first place, and described as “Burmese NGOs”. This might signal a shift in China’s relations to the Burmese government; greater concern with the fallout from controversial megaprojects (as already manifested in the rhetoric used in Africa), or else a shift in the relationship between Peking and Yunnan Province in relation to the border areas. (Yunnan has been keen on pursuing economic interests while the central government has been more sensitive to the political consequences, although so far this has mainly meant that Peking refused to talk to border-area ethnic organisations that oppose the Burmese junta.


Phoenix Weekly on Chinese investment in the Mekong region

April 17, 2010

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

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

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

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

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

China Rights Forum on China’s influence abroad

April 8, 2010

China Rights Forum, the publication of Human Rights in China (HRIC), devoted its 4/2009 issue to “China’s Soft Power.” The issue includes contributions by Andrew Nathan and He Qinglian, as well as by the remarkable Qin Hui, who has managed to publish both on the People’s Daily website and here. Prominent political scientist Nathan and co-author Andrew Scobell write on China’s impact on the international human rights regime, and conclude that Chinese diplomacy has not only successfully undermined multilateral human-rights pressure on China but, more generally, weakened the weight of the human rights issue in international organisations. He Qinglian, author of the famous China’s Pitfall and now a “scholar-in-residence” with HRIC, slams China’s “purchase order diplomacy” but notes that is less successful with the U.S. than in Europe: the failure of a massive government shopping trip to the U.S. to prevent American anti-dumping tariffs on Chinese steel pipes in 2009 caused outrage among online “irate youth.” He views China’s African diplomacy as neocolonial. Zhang Boshu, a mainland-based philosopher, points out that while Chinese academia’s soft-power discourse originates in highly “realist” and often Machiavellian foreign-policy writing (it is generally considered that the term began its career from an article by Zhao Bijian in Foreign Affairs), it has synergies with a more sophisticated, postcolonial strand of humanities scholarship, which stresses the hegemony of Western discourse. The government’s desire to create a Chinese media group capable of “correcting the image of China” abroad, reportedly with an investment of US $7 billion, combines the recognition of the epistemic hegemony of English-language writing with the assumption that the “correction” of this hegemony can and must happen through a government-led initiative. Zhao Yan, a journalist once imprisoned for providing “state secrets” to The New York Times and interviewed in this issue, believes this will not work. I am not so sure.

 The authors of the issue, from the exiled He Qinglian to the semi-establishment Qin Hui, agree that “China’s rise” is having, or will have, a negative influence on the world by making it “more like China.” But they focus on different aspects of the transformation. Qin Hui, who is sometimes described a sociologist and at other times as an economist (also sometimes as a leftist and at others times  as a liberal), offers the most interesting argument. He maintains that, in the current international discourse on “China’s rise,” “the ‘left’ praises China because free competition is still underdeveloped there, and the ‘right’ praises it because its welfare standards are very low” (p. 56). In response to competition from China, “the welfare states are obliged to reduce their welfare standards, and the free trade nations, too, it seems, will finally have no choice but to re-erect trade barriers,” sometimes simultaneously (ibid.) Most others see this process as a result of the “neoliberal hegemony” rather than of China’s policies, but for Qin, what is happening is that “the mechanisms of globalization disperse Chinese social contradictions to the whole world” (p. 58). Qin notes that China has achieved its economic growth not just thanks to cheap labour but thanks to the simultaneous cheapness of labour, capital, and land, which has been the result of the unlimited power of the state to intervene with the economy. “The development of this trend has made the welfare state [internationally] unsustainable, and … the worldwide labor union movement has been affected” (ibid). According to Qin, French President Sarkozy’s move to simultaneously expand the power of the state and dismantle welfare is in fact a sign of the “Sinicization” of the world. Unlike the other authors, however, Qin maintains that this can easily (!) be changed if China expands freedoms, limits state power and builds welfare.

Sarah Raine’s China’s African Challenges

March 16, 2010

One of the latest additions to the China-Africa literature is Sarah Raine’s China’s African Challenges, which was published by the International Institute of Strategic Studies last year. Although it breaks no new ground — it would be difficult to do so with the sudden explosion of books on the subject — it is a good, balanced book, and it is novel in that it focuses on the Chinese state actors involved in the China game. Ultimately, like Qin Hui, Raine is more interested in how this engagement might affect China and its government structures than in how it is affecting Africa.  She points out the diversity and internal conflicts of the various Chinese actors on the continent, but warns against falling into the other extreme and denying all ability of the Chinese state to act as a concerted entity.

Raine also gives one of the best assessments so far of the various criticisms leveled at Chinese investment in Africa, examining themone by one by one and in a number of cases adding information that was new to me. The section “Facing the Challenges Ahead” (pp. 129-137) is a cogent attempt to speculate on how larger and smaller Chinese businesses will react to the changing environment, which includes the central Chinese government’s increasing promotion of “corporate social responsibility”. She warns that it is hard to predict whether “competition with other resource-hungry powers [will] encourage more — or less — responsible engagement,” and that attempts to enforce better practices may easily unravel under the pressure of economic exigencies, as they periodically do in China. “The challenge for China,” she notes further, will be … to regulate more tightly its companies’ activities in some instances, while also learning to relinquish control” in others (p. 137). She argues that garnering more popular support  in Africa would make it easier for Chinese investments to cope with the likely wave of discontent in the case of an economic downturn, and suggests that the Chinese government should begin talking to NGOs (this has since taken place, as in International Rivers’ invitation to assess Sinohydro’s environmental policy or the lopsided NGO summit that I have written about earlier).

Qin Hui’s talk in Kunming on Chinese investments in Southeast Asian power

December 12, 2009

The prominent social thinker/economic historian Qin Hui from Tsinghua University — described by his friend David Kelly as a social democrat — has recently written a number of articles on Chinese mines and infrastructure investments abroad, particularly in the Mekong region, but also Australia and Africa. Merriden has now received the text of a talk he gave on 19 November in Kunming, entitled “Participation in Mekong River Development: Chinese Companies Should have Rules,” which has been circulating on the Internet in an English translation by Jason Tower.

Here are some excerpts:

Chinese Companies Abroad: Both Risks and Opportunities 

There are already many Chinese companies abroad, and there has already been something of a shift from an older
investment model which was labor intensive and involved importing a large number of workers from China, to one which is focused more on capital investment, operation, and on the construction of BOT projects. The status of Chinese companies in the Mekong region has improved as a result. 

Both private and state enterprises can now be found in the region. Private investment is focused on trade and
labor intensive manufacturing – for example textiles in Cambodia. There are few controversies surrounding this investment. On the other hand large scale monopolistic state owned enterprises have also been investing in areas such as
hydropower and resource extraction, and there are a wide range of controversies related to this. (…)

(…) Chinese companies are doing BOT investments, and after operating for 20-25 years they will need to transfer over their investments. This may result in developers focusing more narrowly on short term interests. In order to begin generation as soon as possible, they may rush to complete the first installation in the shortest time possible. (…)

Role of Chinese Enterprises 

(…) In China there is a saying that “Westerners are afraid of the people, people are afraid of the government, and the government is afraid of Westerners,” in Laos and Cambodia the Chinese have become the “Westerners.”  

However things may not go so smoothly for Chinese investors which get cozy with government officials. In places like Laos and Thailand, civil society is rather developed and the
“people do not fear the government, what they are afraid of are ‘foreigners’ – afraid that foreigners will harm local interests.” 

Chinese enterprises are not necessarily accustomed to the practices of Southeast Asian civil society.  Take the practice of resettlement for example. In China the practice is to first submit a feasibility study to the relevant authorities of the government, only after which can the land be acquired,
with government always doing the job of requisitioning the land; in Laos on the other hand, when a company submits the Feasibility Study to the government, it must also submit evidence that it has obtained the land – this means that
companies must first come to an agreement with those who have an interest in the land. When Chinese companies try to use the many different tricks that they have developed in China to obtain land in Laos, not only do they have difficulties, they also incite many protests on the part of local people against Chinese investors. The reputation of Chinese business has been impacted as a result. 

Standards – Chinese Like Low, Not High

Chinese companies have a tendency to apply the lowest standards they possibly can. Some companies look to see whether local standards are lower than Chinese standards – if so they apply local standards. If local standards are higher than Chinese though, they will apply Chinese standards. One common complaint foreigners make against Chinese business is a good example of this – that Chinese do not promote local employment. If Chinese labor standards are lower than those of the countries where they are investing, and if these lower standards are applied, local workers are not willing to work, and Chinese companies are certain to use Chinese workers. It is important to point out though, that Chinese workers only go abroad to work when standards are higher than those they can
get in China. 

The main reason that Chinese companies use Chinese workers is that local workers are not willing to do some jobs. While Laos is not very developed (…) Chinese are being brought in to do manual labor, as locals are not willing to do this. When
the World Bank and western countries were driving the development of Laos, they needed a large number of engineers, which they trained. However after these countries went green, all of these workers were left without jobs. These are
the people that Chinese companies are hiring. 

Chinese enterprises should shift to apply the highest standards possible. Once this concept has been internalized by Chinese companies, this will also help to improve their behavior back in China. I am very supportive of Chinese companies going abroad, as it is possible for all parties to benefit from it.
On the one hand, Chinese companies can contribute to the development of other countries, while making using of China’s excess capital. On the other hand, as Chinese companies are criticized abroad, they will have pressure to improve the
way that they behave. Chinese companies should take advantage of these suggestions and improve their investment behaviors, and their employment practices. Once they have improved their behavior overseas, they can bring
these new practices back to China. If Chinese companies can be a bit better to the Chinese people, and treat their own workers better, then our own society will become more harmonious. (…)