Tuesday, June 7, 2011

Chinese Investors Should Listen to the Complaints of the Locals

*Unofficial translation of an opinion piece from a senior China EXIM
bank official.*

Chinese Investors Should Listen to the Complaints of the Locals

Originally published at
http://opinion.huanqiu.com/roll/2011-01/1415487.html on January 11, 2011

Abstract: Most Chinese companies are not good at dealing with
communities, non-governmental organizations, and local and foreign
media, with the exception of local governments and business partners.

Last year, I visited Cambodia and Laos with a delegation on a field trip
to explore the social and environmental impacts of Chinese investments
in Southeast Asia countries, especially in the Mekong River Basin.
During the trip, I not only felt what Chinese companies had achieved by
undertaking the "going out" strategy, but also heard some complaints
from locals about "environmental pollution, demolition and relocation,
which resulted from Chinese investments" and the like. Those complaints,
though unpleasant to the ear, deserve our reflection.

Quite a number of Chinese companies, in need of experience in
multinational operations, called upon by the state's "going out"
strategy, and driven by domestic demand and the pursuit of their own
interests, have gone into foreign countries to log and mine. They
routinely replicated their business practices at home, regardless of the
business culture and rules of practice, such as respecting local customs
and adopting internationally accepted practices.

In response to the complaints and doubts, Chinese investors tend to
argue: "What Chinese companies have done is not the best, but it is not
the worst either." While this is true, it is neither expressive nor
convincing, and it is also inappropriate for them to assess themselves.
We take it for granted that we have come to help the local people by
pouring in investments, but people in the host countries will not simply
appreciate this. They probably believe that these investors have come
for economic and diplomatic rewards, or they think the companies should
do better than what they are currently doing. The mainstream voice of
the host countries (mainly from the local governments) has expressed
appreciation, but there are non-mainstream voices (mainly from local
residents, non-governmental organizations and some of the media) airing
dissatisfaction and complaints. With respect to whether we should give
them fish or teach them how to fish, we have correctly done the latter.
However, the host countries have found what they want is "fishing" in a
sustainable way, rather than "fishing" in a good way mixed with bad, let
alone "fishing by drying the pool."

Unfortunately, most Chinese companies are not good at dealing local
communities, non-governmental organizations, and local and foreign
media, apart from local governments and partners. Some companies have
not made any efforts to communicate with different voices and have even
refused to do so. We actually heard this at the local Chinese Chamber of
Commerce: "We have been busy every day at the construction site, and
cannot spare any time for such empty talk." Almost none of the Chinese
companies have ever received training on public relations. Their public
relations is to directly target the local government for projects while
ignoring other people who are also stakeholders. Consequently, the
positive evaluations for the Chinese companies from governments and
partners are offset by these stakeholder groups and individuals who
lodge complaints and exhibit anger. Many such cases exist, in which
Chinese companies have their reputation damaged and sometimes their
economic interests hurt as well.

In order to do something well, it has to be done carefully. All parties
within host countries believe that aid and investments from China have
helped them to rapidly improve their infrastructure, power-generation
and agricultural capabilities. At the same time, they are concerned
about their forests and plants, migratory fish, environmental
protection, and resettlement. The concerns of local people are not only
aimed at Chinese investments, but also at investments from South Korea,
Japan, Thailand and Vietnam. But China, as a major power, "invites wind
like a tall tree" and is often required to be a good example to others.
Therefore, whenever a feasibility study is done for any project, it is
very important to conduct social and environmental impact assessments.

▲ (Li Fusheng, Deputy General Manager of Assessment Review, Import and
Export Bank of China; Professor, Graduate School of CASS.)

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