Communities to Benefit More from China’s Overseas Investments

By Eric Biegon in Beijing, China

President Xi Jinping’s administration is promising more employment opportunities and business openings to local communities in Africa. Chinese ministry of Commerce disclosed that the increasing country’s outbound investments are under strict instructions to empower populations around their areas of operations.

“All must undertake social responsibilities and help employ the populace”. Said Qian Keming, the vice minister of commerce

According to Mr. Qian, who is in charge of Africa affairs in the ministry, “Chinese companies in Africa reached 3.2 Billion US dollars in investments last year.”

He said this figure will shoot up as he projected massive investment flows to the continent this year.

Last week, Chinese foreign affairs Minister Wang Yi disclosed that China’s cooperation with Africa is undergoing shifts as Beijing embarks on a mission to build industrial parks all across the continent.

With this expected increase in investments, commerce minister said “their economic impact must be felt by communities in host countries.”

Rogue Outbound Investments:

But as China’s investments to Africa rise considerably, concerns abound especially in regards to effects on environment and communities.

In other parts of the continent, some Chinese companies have been accused of developing substandard infrastructure with greater effects on environment and the locals. This coupled with grumbling over cases of poor treatment of workers.

Allegations which Beijing, it appears, is not taking lightly.

Whereas he exonerates a large number of outbound investments from culpability in these social ills, China’s new minister of commerce Zhong Shan is threatening stringent action against companies found guilty of these vices.

Minister Zhong

“We will take appropriate action against any devious company. This is because the said companies are tainting the image of Beijing globally.” Zhong Warned

He said all Chinese firms engaged in overseas investments have no option but build a relationship with the local community at the onset of any project.

Among the actions to be taken by Xi’s administration include blacklisting of companies found to have flouted the regulations to operate in foreign countries.

In the opinion of the tough talking minister, these companies have brought disrepute to the good name of Chinese people.

Statistics indicate that more than 2,000 Chinese companies have invested in Africa in various sectors including infrastructure, power generation and natural resource extraction among others.

Kenya is one of the largest recipient of inflows from China.

China is financing the railway (Mombasa-Naivasha SGR) and port (Lamu) infrastructure projects. Other areas of investments include Mining, communications, automotive manufacturing among others.

In the case of empowerment to local communities, a recent survey by World Bank shows that Chinese companies hire Kenyans for 78 percent of full time and 95 percent of part-time jobs. The report further showed that 93 percent of Chinese companies hire Kenyan workers. The survey concluded that employment of Kenyans by Chinese companies was growing over time.

Zhong says Beijing is developing measures to ensure Chinese businesses going global operate in a well regulated and orderly manner.