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Updated: March 2, 2011 16:58 IST

Libya exposes risks of China's African ventures

AP
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Beijing is taking steps to aid with the evacuation, sending charter flights and ferries along with military transport planes and dispatching a navy frigate to provide security for its nationals in Libya, where increasingly violent clashes are threatening to transform a 15—day popular rebellion into a civil wa

Bangladeshi workers who have been trying to leave Libya for over six days wake up in the morning in a makeshift tent as they wait to be evacuated in the eastern city of Benghazi, Libya, on Tuesday. Photo: AP.
Bangladeshi workers who have been trying to leave Libya for over six days wake up in the morning in a makeshift tent as they wait to be evacuated in the eastern city of Benghazi, Libya, on Tuesday. Photo: AP.

Tens of thousands of Chinese workers are scrambling to escape the chaos in Libya, highlighting the risks taken by Chinese businesses piling into unstable African countries in search of oil, gas and other resources.

Beijing is taking steps to aid with the evacuation, sending charter flights and ferries along with military transport planes and dispatching a navy frigate to provide security for its nationals in Libya, where increasingly violent clashes are threatening to transform a 15—day popular rebellion into a civil war.

About 32,000 Chinese - most working on construction projects or providing oil field services - had been whisked out of Libya as of Wednesday, with another 3,000 waiting to be airlifted out of the desert in the country’s deep south, according to China’s Foreign Ministry.

Analysts say the crisis underscores the need for contingency planning as China’s investments in Africa soar into the tens of billions of dollars.

While no Chinese has been reported killed or injured in Libya, Chinese businesses and construction sites have been looted and workers forced from their dormitories. Chinese companies meanwhile stand to lose financially from deals abruptly halted, including a half—finished public housing project being built by state—owned contractor China State Construction Engineering Corp. worth 17.6 billion yuan ($2.67 billion). The company says the project’s future is uncertain.

“There is this argument that China can no longer continue to afford to pull back every time and that it should more actively safeguard the interests of its people and its companies,” said Jonathan Holslag, a research fellow at the Institute for Contemporary China Studies at the University of Brussels.

Another state—run company, China Railway Construction Corp., said it was concerned over the fate of three separate projects worth a total of more than $4.2 billion, especially losses to equipment and building materials. Other Chinese engineering, telecommunications and energy companies also face losses, although it was unclear what the total figure would be, according to the authoritative China Business News newspaper.

Wang Suolao, a Peking University Middle East expert, said Chinese companies had taken on contracts in Libya worth a total of $18 billion. He told The Associated Press it was too early to tell what the losses would be.

The fighting between rebel forces and loyalists of Libyan leader Moammar Qadhafi isn’t expected to have an impact on China’s burgeoning economic links with Africa, but it serves as a reminder of how conditions can turn dramatically desperate in countries lacking strong institutions and prone to political conflict.

Chasing opportunities where others fear to tread, Chinese businesses have long accepted such dangers.

Chinese businesses drawn to the continent in search of oil, gas, copper and other resources are expected to have invested $50 billion in Africa by 2015, according to a forecast from South Africa’s Standard Bank.

Across Africa, including in countries such as Congo with only partially functioning governments, Chinese companies are building stadiums, roads and railways, projects often funded by preferential loans from Chinese state—owned banks in exchange for access to mineral wealth.

China’s trade with Africa passed $100 billion last year, boosted by cuts in tariffs on African exports, and is due to more than double to $300 billion by 2015, according to Standard Bank.

The Chinese presence has been largely welcomed by local leaders eager for investment, but has at times fuelled resentment over poor treatment of African workers and the tendency of Chinese firms to import labour from China. Increasingly, Chinese private businesses are also playing major roles in retail, food production and manufacturing in Africa, sometimes at the cost of local players.

Among recent incidents, two Chinese mine mangers face attempted murder charges for firing upon striking workers in Zambia, where local unions have long complained about poor pay and working conditions at Chinese—invested businesses. The Chinese, meanwhile, have been victims of violence, murder and kidnapping in countries from Afghanistan to Ethiopia.

China began focusing more closely on consular protection over the past decade as the numbers of Chinese travelling abroad for work, study and tourism began to soar. The Foreign Ministry established a department dedicated to helping Chinese abroad and diplomats are increasing their outreach to the expatriate community and contacts with local governments and international organizations, experts say.

“I think that Beijing is only beginning to fully realize the implications of complications of its exposure abroad” to domestic instability in countries overseas, said Christopher Alden, a senior lecturer at the London School of Economics who has studied China—Africa relations.

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