Investments are aboveboard, say China authorities

Beijing. Chinese authorities have come out in defence of the quality and nature of investments in Africa, arguing that there have never been any ill motives or attempts for opaqueness.

The position of China was declared during a visit to state-owned Assets Supervision and Administration Commission (Sasac) offices recently. The authority was given the task of overseeing management of government corporations during the transition from a centrally planned economy to a market economy.

The institution was assigned duties similar to those of the Presidential Parastatal Sector Reform Commission (PSRC) in Tanzania under the Public Corporations Act, 1992 as amended in 1993 and 1999, to co-ordinate implementation of the government’s economic reform efforts in the form of privatisation.

Its main tasks were to design and propose to the government major reforms of how to run state-owned enterprises (SOEs) and how to privatise some of them in order to reduce the burden on the central government.

According to Sasac’s Deputy Secretary General, Mr Peng Huagang, the exercise went well and some of the companies were now in various African countries, including Tanzania. However, together with the reported business successes, there have been a  number of problems.

He explains further that some of these companies are alleged to  have been complicit in corruption.

“However, I can assure you that none of our SOEs have been reported in such misdeeds, but it is very unfortunate that in an African setting a good number people cannot distinguish between a SOE and a private entity,” Mr Peng said.

He added that the best side of SOEs, whether they were in China or Africa, was the fact that they were always guided by the philosophy of provision of service and job creation.

But this has its downside due to the fact that the number of employees is bigger than demanded, while the profit yielded is not necessarily always reflective of the number of workers.

On the contrary, Chinese private companies operating in China and abroad tend to be more competitive in the market-oriented economy with a fewer number of employees in comparison to SOEs.

Private companies are said to be more commercial-oriented, creative and can easily enter into joint ventures whenever they deem fit because such decisions can be done by their boards of directors. On the contrary, SOEs have to take a much careful approach, including issues of national security, public interest and business focus.

However, it is the duty of the government to oversee all companies in their operations domestically and abroad for the sake of maintaining the country’s good reputation and adhere to international trade norms.

Mr Anthony Zang, Manager at the Investment Management Department of the  JOC International Technical Engineering Company Limited, cautioned that tax regimes in some hosting countries were unpredictable and could undergo major negative reforms without investors being considered.

In some countries, particularly in West Africa, Chinese companies have abandoned their projects due to such decisions or lack of peace and tranquillity.

JOC has a cotton textile project in Shinyanga.  The spokesperson informed The Citizen that one main challenge for investors in Tanzania was frequent blackouts, adding that more needed to be done in this area  through  sustainable investment.

Moreover, JOC has contributed to Tanzania’s development  through job creation and has entered into partnerships with other many other countries, including some in Africa.

This reporter also visited the state-owned Commercial Aircraft Corporation of China Ltd (Comac) in Shanghai.

Comac spokespersons Jiang Zemin and Shingtao Huang said the company was formed with the approval of Sasac in collaboration with the State Council and Shanghai Guo Sheng (Group) Co Ltd.

Comac functions as the main vehicle in implementing large passenger aircraft programmes in China. It is also mandated with the overall planning of developing long-range airliners and regional jet programmes and realising the industrialisation of civil aircraft in China.

Apart from aircraft construction, the company is engaged in research, manufacture and flight tests of civil aircraft and related products, as well as marketing, servicing, leasing and operation of civil aircraft.

Large passenger aircraft are the embodiment of the nation’s industrial and technological standing as well as the comprehensive power, and ares praised as “the flower of modern industry” and “a pearl in modern manufacturing industry”.

How China has invested a lot in infrastructure was revealed when this reporter visited the China Railway Construction Corporation Limited (CRCC).

According to official information provided through Mr Chen Dayong, the CRCC International Business System President, the firm is a state-owned construction enterprise that is the second largest construction and engineering company in the world by revenue as of 2014.

The Ethiopian government and CRCC are implementing the country’s first ever inter-city light rail system.  The Ethiopian government hopes the $475 million project will ease traffic congestion in the sprawling capital of Addis Ababa.

CRCC was incorporated in 2007 in order to float the assets of the China Railway Construction Corporation [Group] (CRCCG). Some of the major beneficiaries of its construction capacity and prowess are Ethiopia, Nigeria and South Africa.

CRCC has ongoing construction projects in Kenya, Uganda, and South Sudan, which are aimed at forming a railway network link. The spirit behind these constructions is to ensure that there is maintenance of good services.

Officials said CRCC was dedicated to becoming a global construction company. Efforts to achieve this goal were apparent in the 2000s when by end of the decade, the company had 209 projects in 35 countries, mostly in Africa. Its five major overseas markets then were Algeria, Nigeria, Libya, Angola and Saudi Arabia.