Ethical reminder for Chinese businesses in Africa

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Associated Press

Posted on March 18, 2013 at 7:32 AM

Updated Monday, Mar 18 at 7:35 AM

BEIJING (AP) — Chinese businesses operating in Africa need to follow local laws and put long-term benefits ahead of short-term gains, a Beijing diplomat said Monday, acknowledging that rising trade had created "growing pains" in economic ties.

Chinese companies should work to benefit their African host economies by investing in industries such as power generation, agriculture, textiles and communications that create jobs and generate tax revenues, Vice Foreign Minister Zhai Jun told participants in an African business seminar in Beijing.

"Making quick money and leaving is a myopic action, and 'catching fish by draining the pond' is unethical," Zhai was quoted as saying by the official Xinhua News Agency. He said Chinese businesses in Africa need to compete fairly, respect local laws and customs, and improve worker welfare and environmental protection.

Complaints over business practices have grown as Chinese firms pour into the continent in hopes of winning profits in areas and industries that competitors from the developed world have given up on.

Chinese diplomats were particularly stung by an editorial published in the Financial Times last week by Nigerian Central Bank Governor Lamido Sanusi which criticized China for exploiting the continent's mineral wealth while undermining its manufacturing industries.

"We must see China for what it is: a competitor. We must not only produce locally goods in which we can build comparative advantage, but also actively fight off Chinese imports promoted by predatory policies," Sanusi wrote.

According to official Chinese figures, China's trade with Africa has grown from $10 billion to in 2000 to nearly $200 billion last year, driven largely by China's demand for oil and other African raw commodities. Africa is also a major investment destination for Chinese companies building infrastructure ranging from hydroelectric projects to telecommunications grids, with a total of more than $15.3 billion invested directly by the end of last year, Zhai was quoted as saying.

Such rapid increases had created "growing pains in China-Africa economic and trade cooperation," Zhai said.

"Although volume increased rapidly, there is not much progress in quality improvement," he said.

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