23 October 2013

China’s foreign investment

Rico asks: isn't China supposed to be a Communist country? If so, why does SmartPlanet have a splendid map of all the capitalism they're doing around the world:

Living in the United States, the scale of foreign investment by Chinese companies isn’t so obvious. Much of the $57.8 billion of Chinese investment in the US since 2005 has been in the finance sector. I didn’t comprehend the scale of the Chinese investment until I visited Ethiopia earlier this month, where nearly all the construction projects— including a major light rail line— were being done by Chinese firms (sub-Saharan Africa has the most investment from China of any region). Many huge factories on the outskirts of the capital city are joint projects between China and Ethiopia, with the flags of both countries flying side-by-side. The redevelopment of a major road was paid for by Chinese government and is now dubbed Ethio-China Friendship Avenue. In other words, the scale of Chinese investment is overtly apparent in Ethiopia and many other countries around the world, if not as obvious in the developed world.
Heritage Foundation provides more insight into China’s massive investment all over the world, with a new report showing moderate growth in Chinese investment so far in 2013 and the map (above) with total investment and contracts won since 2005. There’s also a fascinating interactive map with detailed information on Chinese investment for every country where it has investments over a hundred million dollars.
Most people I talked to in Ethiopia about all the Chinese investment had mixed feelings. They were glad for the investment— in just a few years the country will have its first light rail— but there’s also skepticism. What are their ulterior motives? Will all the investment ultimately help Ethiopians in the long run? Why us?
As Quartz points out, even if Chinese companies have nothing to hide there’s good reason to be skeptical. The main reason? A lack of transparency. In a report on a hundred multinational corporations in emerging markets, Transparency International, an anti-corruption organization, shows that Chinese multinationals perform poorly. “Results show that companies from China lag behind in every dimension with an overall score of twenty percent (two out of a maximum of ten),” the report said. “Considering their growing influence in markets around the world, this poor performance is of concern.”

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