This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/global-development-professionals-network/2013/may/17/chinese-contractors-africa

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Working with Chinese contractors Working with Chinese contractors
(4 months later)
In 1965, archaeologists unearthed an exquisite bronze sword from a tomb in north China's Hebei province. An inscription on the twin-bladed weapon suggested it had once been the property of King Goujian of Yue, famed for avenging defeat and imprisonment by the neighbouring state of Wu after a decade spent in ascetic contemplation of his ignominy. A symbol of resurgent state power, the sword featured prominently in an exhibition of military relics staged during the Beijing Olympics. Yet its authenticity has been questioned by experts and enthusiasts, sparking lively debate.In 1965, archaeologists unearthed an exquisite bronze sword from a tomb in north China's Hebei province. An inscription on the twin-bladed weapon suggested it had once been the property of King Goujian of Yue, famed for avenging defeat and imprisonment by the neighbouring state of Wu after a decade spent in ascetic contemplation of his ignominy. A symbol of resurgent state power, the sword featured prominently in an exhibition of military relics staged during the Beijing Olympics. Yet its authenticity has been questioned by experts and enthusiasts, sparking lively debate.
The sword of Goujian is not the only double-edged embodiment of revitalised Chinese power at the centre of modern controversy. As post-Mao China has risen inexorably to become the world's second largest economy, so Chinese contractors have become increasingly ubiquitous on the international stage. Often the beneficiaries of generous state support, they have brought their expertise to bear in a variety of areas – most notably infrastructure, but also in fields such as education, healthcare and agriculture – across Africa and beyond. In the process, however, they have become a microcosm of Chinese intervention more broadly, polarising opinion and drawing both praise and criticism.The sword of Goujian is not the only double-edged embodiment of revitalised Chinese power at the centre of modern controversy. As post-Mao China has risen inexorably to become the world's second largest economy, so Chinese contractors have become increasingly ubiquitous on the international stage. Often the beneficiaries of generous state support, they have brought their expertise to bear in a variety of areas – most notably infrastructure, but also in fields such as education, healthcare and agriculture – across Africa and beyond. In the process, however, they have become a microcosm of Chinese intervention more broadly, polarising opinion and drawing both praise and criticism.
For every observer who tells you Chinese companies offer greater efficiency and value for money, another will claim they flood developing countries with imported labour, undermining the potential for local procurement, skills transfer and capacity building. But just how useful are these sweeping generalisations?For every observer who tells you Chinese companies offer greater efficiency and value for money, another will claim they flood developing countries with imported labour, undermining the potential for local procurement, skills transfer and capacity building. But just how useful are these sweeping generalisations?
Sven Grimm, director of the Centre for Chinese studies at Stellenbosch University, points out that, though the means by which Chinese firms win contracts are varied – some are state appointed, others win open government or international agency tenders, while many prevail simply through market-driven competition – the response when things go wrong is almost always the same.Sven Grimm, director of the Centre for Chinese studies at Stellenbosch University, points out that, though the means by which Chinese firms win contracts are varied – some are state appointed, others win open government or international agency tenders, while many prevail simply through market-driven competition – the response when things go wrong is almost always the same.
"The discussion on Chinese contractors puts various aspects into one box," says Grimm. "Whenever work is delivered sub-standard, complaints are about 'the Chinese', when we would actually have to look at the contracting agency's policy and supervision too. We often lump together various cases where the only commonality is that Chinese contractors carry out the work. We have to look and see which companies are most often not delivering.""The discussion on Chinese contractors puts various aspects into one box," says Grimm. "Whenever work is delivered sub-standard, complaints are about 'the Chinese', when we would actually have to look at the contracting agency's policy and supervision too. We often lump together various cases where the only commonality is that Chinese contractors carry out the work. We have to look and see which companies are most often not delivering."
Deborah Bräutigam, a professor of international development and comparative politics at John Hopkins University in Baltimore, likewise cautions against oversimplifying the debate.Deborah Bräutigam, a professor of international development and comparative politics at John Hopkins University in Baltimore, likewise cautions against oversimplifying the debate.
"It's a myth to think that everything the Chinese do happens quickly," says Bräutigam. "I've seen negotiations drag on for a long time, especially for bigger initiatives like hydropower dams or mining projects, which would not normally be financed through the aid programme. If you look at any of the big deals that have been announced, they don't happen quickly. However, it's also a myth that Chinese firms don't hire local people.""It's a myth to think that everything the Chinese do happens quickly," says Bräutigam. "I've seen negotiations drag on for a long time, especially for bigger initiatives like hydropower dams or mining projects, which would not normally be financed through the aid programme. If you look at any of the big deals that have been announced, they don't happen quickly. However, it's also a myth that Chinese firms don't hire local people."
Bräutigam illustrates the latter point by recounting the dismissive reaction of Ghanaian officials to a warning from rival bidders that Chinese firms would insist on bringing in their own workers. "Don't tell us specious rumours," was the gist of the Ghanaian response. Not all countries are in a position to be so strident, however.Bräutigam illustrates the latter point by recounting the dismissive reaction of Ghanaian officials to a warning from rival bidders that Chinese firms would insist on bringing in their own workers. "Don't tell us specious rumours," was the gist of the Ghanaian response. Not all countries are in a position to be so strident, however.
"Whether an African government insists on seeing the top three project bids, for instance, or just allows the Chinese government to decide, depends on bargaining power and interests," says Grimm. "A lot depends on the size of the project and the respective interest and leverage of the beneficiary government.""Whether an African government insists on seeing the top three project bids, for instance, or just allows the Chinese government to decide, depends on bargaining power and interests," says Grimm. "A lot depends on the size of the project and the respective interest and leverage of the beneficiary government."
Much rests on reputation, too. Bräutigam recalls the striking impression made by a Chinese project bid shown to her by an African Development Bank representative in Abuja. "It listed 25 projects the company had done in Nigeria previously," she says. "If you have that kind of track record, it's easy for people to make a few phone calls and find out how you did and what the quality was like."Much rests on reputation, too. Bräutigam recalls the striking impression made by a Chinese project bid shown to her by an African Development Bank representative in Abuja. "It listed 25 projects the company had done in Nigeria previously," she says. "If you have that kind of track record, it's easy for people to make a few phone calls and find out how you did and what the quality was like."
Nonetheless, Chinese contractors can be less than circumspect in their approach to competing for overseas work. International rivals have complained of being undercut by aggressive bids that Chinese firms then find impossible to fulfil. A high-profile example occurred in the prelude to the 2012 European Football Championships, when Poland cancelled a $447m (£290m) contract to build a motorway from Warsaw to Berlin after the China Overseas Engineering Group ran into financial difficulties. "A modest highway through Polish potato fields proved to be too much for one of China's biggest builders," reported the Wall Street Journal.Nonetheless, Chinese contractors can be less than circumspect in their approach to competing for overseas work. International rivals have complained of being undercut by aggressive bids that Chinese firms then find impossible to fulfil. A high-profile example occurred in the prelude to the 2012 European Football Championships, when Poland cancelled a $447m (£290m) contract to build a motorway from Warsaw to Berlin after the China Overseas Engineering Group ran into financial difficulties. "A modest highway through Polish potato fields proved to be too much for one of China's biggest builders," reported the Wall Street Journal.
More recently, Ian Khama, the president of Botswana, rounded on Chinese firms contracted to carry out infrastructure projects. "We have had some bad experiences with Chinese companies in this country," Khama told Business Day Live. "You say things like, do you really want to upset such a huge power? But there's no point having a huge power investing in a country if those investments at the end of the day don't do you any good."More recently, Ian Khama, the president of Botswana, rounded on Chinese firms contracted to carry out infrastructure projects. "We have had some bad experiences with Chinese companies in this country," Khama told Business Day Live. "You say things like, do you really want to upset such a huge power? But there's no point having a huge power investing in a country if those investments at the end of the day don't do you any good."
From a Chinese perspective, criticism of this kind benefits neither company nor country. State support effectively casts many Chinese firms as scything embodiments of a resurgent republic – commercial swords of Goujion – so why risk undermining that image?From a Chinese perspective, criticism of this kind benefits neither company nor country. State support effectively casts many Chinese firms as scything embodiments of a resurgent republic – commercial swords of Goujion – so why risk undermining that image?
"Chinese enterprises initially entered the market in Africa in an aggressive economic strategy," says Grimm. "They simply could not afford to be picky when it came to contracts or their setting. Some companies might also have been too optimistic about market opportunities. But we should not forget that [it's not unusual], once you have won a tender, to renegotiate later on, when costs are increasing. This is also the case with some European projects – look at the new concert house in Hamburg, for instance.""Chinese enterprises initially entered the market in Africa in an aggressive economic strategy," says Grimm. "They simply could not afford to be picky when it came to contracts or their setting. Some companies might also have been too optimistic about market opportunities. But we should not forget that [it's not unusual], once you have won a tender, to renegotiate later on, when costs are increasing. This is also the case with some European projects – look at the new concert house in Hamburg, for instance."
Given that trade flows with China are estimated to have broken the $200bn mark last year – a rise of more than 20% on 2011 – it would seem many African governments have reached a similar conclusion. For Bräutigam, it's a clear case of the benefits outweighing the drawbacks.Given that trade flows with China are estimated to have broken the $200bn mark last year – a rise of more than 20% on 2011 – it would seem many African governments have reached a similar conclusion. For Bräutigam, it's a clear case of the benefits outweighing the drawbacks.
"African governments like that the Chinese are very businesslike," she says. "I don't hear complaints that they're not transparent, or that they're trying to hide anything. And they don't have economic or political conditions. There's concern sometimes about whether the quality is as good as they would get from a western company, but then the price is so much lower, and they weigh that. It's a cost-benefit ratio, really.""African governments like that the Chinese are very businesslike," she says. "I don't hear complaints that they're not transparent, or that they're trying to hide anything. And they don't have economic or political conditions. There's concern sometimes about whether the quality is as good as they would get from a western company, but then the price is so much lower, and they weigh that. It's a cost-benefit ratio, really."
This content is brought to you by Guardian Professional. To get more articles like this direct to your inbox, sign up free to become a member of the Global Development Professionals NetworkThis content is brought to you by Guardian Professional. To get more articles like this direct to your inbox, sign up free to become a member of the Global Development Professionals Network
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.