ample, offering very cheap land and getting
the basic engineering ready for construction,
as the Chinese government does for domestic
parks. “They just regard you as an enterprise,”
said Feng Zhaoyi.
It takes a long time for an industrial park
to yield returns. However, industrial parks are
more often adopted by less developed econo-
mies to boost their industrialisation process.
Wang Jianye, Managing Director of the Silk
Road Fund said at the meeting that he per-
sonally saw a limited window of opportunity
for operators.Local and International
Chinese enterprises have apparently
learned bad lessons from their old practice
of focusing on building good relations with
government officials in host countries, and
ended up stuck between opposing political
parties and facing conflicts with local trade
unions and communities there. To avoid
this, Chinese enterprises abroad are increas-
ing their local employment fast, and paying
more attention to relations with local com-
munities. The majority of workers in HOdo’s
park in Cambodia are Cambodians. TEDA’s
park in Egypt is jointly run by Chinese and
local partners. As Cambodia’s population is
largely low-skilled, it welcomes labour-inten-
sive Chinese factories that train Cambodian
migrant workers from rural areas with the
necessary skills, Dr Pheak Sothea, director of
the Cambodian Department of Rural Eco-
nomic Development, told ChinaReport in
Beijing at a China-EU forum on poverty re-
duction along the Belt and Road on May 18.
Recently, China’s State media has repeatedly
presented Chinese companies employing lo-
cal workers along the Belt and Road as posi-
tive examples of development programmes.
Pheak hopes Chinese companies will also
help children of Cambodian migrant work-
ers who have been left by their parents with
their grandparents, a social problem China is
still grappling with itself.
Over the past four decades, Western com-
panies have brought their skills and technolo-
gies to their Chinese partners and staff, who
have become strong competitors of Western
companies both in China and international-
ly. The home appliance sector is a typical ex-ample. Tang Xiaoyang of Carnegie-Tsinghua
told ChinaReport that Chinese companies in
less-developed countries along the Belt and
Road would face similar competition once
they help build local supply chains. But he
thinks this pressure is good for China’s overall
industrial upgrade, though less competitive
Chinese companies would have to swallow
this bitter pill.
While bringing jobs and skills helps Chi-
nese companies find a welcome in host
countries, Professor Zhao Kejin, vice secre-
tary-general of the Institute of Global De-
velopment of Tsinghua University believes
the potential competition is why Chinese
companies should also make high-tech in-
vestment in even less-developed host coun-
tries. As he explained to ChinaReport, this is
an effective way for Chinese companies to
keep competitive in the long term. “Nearly
all cars running on Cambodian roads are in-
ternational well-known brands,” he said at a
recent forum sponsored by his institute. In
his speech, he took the example of South Ko-
rea. His research found that low-tech South
Korean companies in China’s Shandong
Province typically only lasted five years, soon
ending up defeated by Chinese competitors.
An Yonggang pointed out that Chinese
industrial parks and Chinese enterprises in
those parks have to bear in mind that they
are already competing with Japanese, South
Korean and US counterparts even in labour-
intensive sectors in less-developed markets
along the Belt and Road. “We have to bring
our best there to compete with them,” he told
ChinaReport.
Being more international could also help
China’s joint industrial parks have a better
chance of making the projects commercial-
ly successful. Wang Jianye of the Silk Road
Fund said at the CCG meeting that Chinese
operators should also try to attract more non-
Chinese enterprises into their parks.
In many recent analyses on China’s over-
seas industrial parks, there are frequent calls
for the Chinese government to offer more
financial support and negotiate with host
countries on favourable taxes for these parks.
An Yonggang warned that special treatment
for Chinese parks abroad would attract strong
criticism for unfair competition in host coun-tries where there are many other industrial
parks and companies – locally established or
run by other countries. He is also concerned
that Chinese State-owned enterprises would
enjoy many more resources from the Chinese
government. As a privately-held operator, he
is more worried about this unfair competi-
tion from his home country than from for-
eign competitors. He hopes that all public
funds available for overseas industrial parks
projects will be open and transparent.
Dealing with corruption in less-developed
host countries is a problem for Chinese enter-
prises, which have often been accused of us-
ing bribes to win bids. HOdo’s solution is to
build contact with Cambodian anti-graft au-
thorities from the outset. “It is a deterrence,
and has worked well so far,” Kingson told
ChinaReport. However, this may not work
everywhere else. In a recent interview in Bei-
jing with China National Radio, Hun Sen,
the Cambodian Prime Minister, confirmed
his strong support for the Sihanoukville Spe-
cial Economic Zone.
Another controversy is whether Chinese
overseas industrial parks assume a more po-
litical than economic role in China’s inter-
ests, particularly if a park is run by a Chinese
State-owned enterprise. Tang thinks this may
be true in the early days of a park in a less
developed country, to help the park set up its
presence there. However, any such parks have
to be economically successful to be sustain-
able in the long run, as proved by parks and
special economic zones within China over
the last four decades, he stressed to ChinaRe-
port.
As Tang said at the CCG meeting, finan-
cial support from the Chinese government is
not helpful for overseas parks that are already
highly market-oriented themselves or operate
in a market-oriented economy. In these cases,
such one-size-fits-all financial support only
distorts local markets in host countries.
Relations with governments both at home
and in host countries remain a challenge for
Chinese industrial park operators and their
enterprises. Being both local and interna-
tional is probably part of the solution. Only
when they make economic sense for both
China and host countries, can they also make
political sense.Photo by xinhua