Wednesday, January 11, 2012

China vows backing for firms investing abroad

China vows backing for firms investing abroad
Updated: 2012-01-06
By Hu Yinan and Zhang Yunbi (China Daily)

The suspension of a $3.6 billion joint hydropower project in Myanmar in
September has sent alarming signals to Chinese companies investing in
emerging markets, said Luo Zhaohui, director-general of the Asia
Department of the Foreign Ministry.

Beijing will boost political diplomatic backing for its companies
overseas, particularly in Asia, the most preferred and concentrated
destination of Chinese investment, Luo said during an online interview
on Thursday.

By the end of 2010, 71.9 percent of China's foreign direct investment,
which totaled $300 billion, was based in Asia, official figures showed.

"As the scope of these companies broadens, the risks and challenges they
face, such as shifts in political affairs, disruption by external
factors and a lack of experience in operating internationally, are
rising as well," said Luo, a former ambassador to Pakistan.

Thursday's interview, the first in a series with a dozen senior Chinese
diplomats, was co-hosted by websites of People's Daily, China Daily,
China News Service and the Foreign Ministry.

Myanmar President Thein Sein's sudden suspension of the Myitsone
hydropower plant, a project both sides agreed upon in 2006, on Sept 30,
came as a surprise to many. The country's foreign minister and
vice-president paid consecutive visits to China to hold consultations in
the wake of the incident.

The two countries are still in the process of properly resolving the
issue, Luo said, adding that China supports reconciliation efforts by
the Myanmar government and is willing to see its relations improve with
Western countries.

Yang Baoyun, a professor of Asian studies at Peking University, said
State-owned companies should "be more cautious" in investing overseas.

"The overseas operation of large State-owned enterprises serves as a
component of public diplomacy," he said. State-owned China Power
Investment is Myitsone's largest investor.

At the diplomatic level, Luo said Beijing is calling on relevant
countries to ease sanctions against Myanmar to facilitate the stability
and development of the country.

William Hague on Thursday became the first UK foreign secretary to visit
Myanmar since 1955. His visit came three months before the European
Union is scheduled to hold its annual sanctions review, and followed an
unprecedented visit to Myanmar by US Secretary of State Hillary Clinton
in early December.

US billionaire investor George Soros recently wrapped up a weeklong trip
to Myanmar, during which he met President Thein Sein and Aung San Suu
Kyi, leader of the National League for Democracy.

In Beijing, Luo said the US' increasing strategic input in the
Asia-Pacific is testament to the vitality, potential and growing
significance of the region.

China is "fully capable of well managing its surroundings", he said.

Dismissing concerns of potential clashes as Washington's interests in
Asia come to intersect with those of Beijing, Luo said Sino-US
cooperation in the Asia-Pacific is the common aspiration of all
countries in the region.

China respects the legitimate interests of the United States in the
Asia-Pacific, welcomes the US to play a constructive role in regional
affairs and urges it to "respect Asian characteristics, respect the
Asian model and respect the interests of relevant parties", Luo said.

Beijing will be neither provocative nor afraid of tackling issues, he added.

"We're clear on where the bottom line of our interests is," said Luo.

He added: "We disagree with the concept of zero-sum games, and are not
of the view that a rising nation will necessarily collide with an
existing power. China is on the path of peaceful development, a path
that we chose ourselves."

Shi Yinhong, a researcher at the China Institute of International
Studies, said this reflects what President Hu Jintao told his US
counterpart Barack Obama in November - that he hopes Washington, too,
can respect China's legitimate interests in the Asia-Pacific.

China Daily

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