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Belt and Road” project for the benefit of the local can not be doubted

Belt and Road" project for the benefit of the local can not be doubted

China-Malaysia Friendship Bridge connecting male and airport islands in the Maldives capital and the airport, built by China (Photo by Du Cailiang)

Reference News Network reported on May 16

An article published on May 11th by Dirk Van der Clay, a professor of macroeconomics at the Australian National University, said there was important research evidence that Chinese companies were localizing in emerging economies around the world. For example, a study found that almost all but a few foreigners at a large mine in Peru belonging to the Chinese were locals. The general trend towards job localization is evident.

At a video conference with a group of African students at the end of April, U.S. Secretary of State Anthony Blinken implicitly asked a question about China: “Do they come with their own workers, or do they provide jobs for the people of the countries they invest in?” ”

Blinken seems to be hinting that China’s projects and investments on the continent will not benefit the locals. This view stands out in the media and in the commentary.

However, available evidence suggests that the localization of China’s overseas economic activities has increased significantly. Chinese companies are providing jobs, exports, budget revenues and technical expertise. Large infrastructure projects built by China’s labor force were once the backbone of China’s economic engagement in the Indian Ocean-Pacific region or elsewhere. In short, these projects are meeting the needs of emerging economies.

There is important research evidence that Chinese companies have localized in emerging economies around the world. A journal article I published last year said that over the past decade, all the big Chinese companies in Kyrgyzstan and Tajikistan have localized their employees.

Similar models are reflected all over the world. McKinsey conducted field surveys of more than 1,000 Chinese companies in eight African countries. The survey found that “89 per cent of employees are African, creating nearly 300,000 jobs for African workers”. A johns Hopkins University team surveyed 20 Chinese manufacturing companies in Nigeria and found that the average proportion of local employees was 85 per cent. Another study found that almost all but a few foreigners at a large mine in Peru belonging to the Chinese were locals. The general trend towards job localization is evident.

In Central Asia, no large-scale road, rail or hydrocarbon power plant agreements funded by Chinese loans have been signed since 2015. Instead, there have been joint ventures to build industrial capacity for exports, usually to Russia and Turkey. At the same time, China is gradually loosening market access, which Kazakhstan and Russia have gained.

This trend has also been confirmed elsewhere. Since 2016, China’s policy banks have significantly reduced their commitment to new loans to other countries, according to a team at Boston University. Rongding Consulting found that during the Coronavirus pandemic, China’s policy banks provided less global lending to other countries, while International Lending from Chinese commercial banks remained unchanged.

These are lengthy answers to Blinken’s short questions.

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