China’s dilemma

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Overseas investment by Chinese companies in countries such as Sudan has damaged and in some cases “hijacked” Beijing’s foreign policy, diplomatic scholars in the capital have said.

By Richard McGregor in Beijing

In interviews, scholars at leading Chinese think-tanks and universities in Beijing singled out the conduct of state-owned China National Petroleum Corp, or PetroChina, in Sudan.

Zhu Feng, at Peking University’s Centre for International and Strategic Studies, said the likes of PetroChina, though state-owned, had sometimes pursued profit at the expense of the broader national interest.

“These state-owned companies have become very powerful interest groups. They even hijacked China’s foreign policy in Sudan. That’s truly worrisome to me,” he said.

CNPC’s investment in Sudan has become a lightning rod for criticism of the Beijing government and a rallying point for some activists advocating a boycott of the 2008 Beijing Olympics. The Chinese government has launched a counter-offensive, asserting it is doing all in its power to persuade the Khartoum government to stop human rights atrocities in the Darfur region.

China’s foreign ministry has not been critical of CNPC, but the comments by senior academics in Beijing suggest substantial disquiet in official circles about overseas investments.

Chinese companies have gone offshore with the blessing and even urging of the central government, which wants to secure resources and build global enterprises.

Zhai Kun, of the China Institute of Contemporary International Relations in Beijing, said that large state companies “now stand for economic considerations”. However, he said: “More and more regulations should now be created by the government to constrain their behaviour overseas.”

Investments by Chinese companies in places as diverse as Zambia, Peru and the Philippines have provoked a political backlash, which Beijing’s diplomats have had to work to contain.

The Philippines government responded to bribery allegations against ZTE, a Chinese private telecommunications equipment manufacturer, by cancelling some Chinese-funded aid projects.

Zhang Yunling, of the Chinese Academy of Social Sciences, said he had recently dispatched a team of international relations specialists to Sudan to prepare a report on China’s conduct in the country. “The companies feel great pressure as a result of being linked to politics,” he said. “They don’t care a lot about politics but it cannot be avoided. This kind of situation will emerge in many other places as well.”

Steve Tsang, at Oxford University, said the issue had a positive side, as it illustrated how China was becoming a more “normal” global power. “The more Beijing is influenced by its overseas business lobby, the greater the chance it may debate internally its policies in the countries where major Chinese investments are taking place,” he said.

He rejected notions that foreign policy had been “hijacked”, saying Beijing was not playing a proper role in Sudan “because the government and its senior policymakers prefer their existing approach”.

The Financial Times

International  International news in general
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