Chinese investors get cold shoulder
- By Wang Yanlin
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E-mail Shanghai Daily, May 15, 2012
'Demonizing China'
Shen Jiru, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said Zhongkun's case is just the latest example of a trend "demonizing" China.
"There is a big market for 'China threat' theories," Shen said. "It produces hurdles in some really normal commercial deals. While China is marching towards a market economy, businesses in quite a few countries are more and more ruled by unnecessary political worries."
Some critics speculated that Zhongkun was intent on setting up a secret military port in Iceland that would give China influence over oil development in the Arctic. But the land Zhongkun wanted to buy was far from the coast.
Sun Lijian, an economics professor at Fudan University, said the case also mirrors indecisiveness by some foreign governments. "They need money, but sometimes they are not wise enough to accept good money," Sun said.
Robin Bew, chief economist and editorial director at Economist Intelligence Unit, suggested that Chinese investors should try to improve their overseas image and correct the impression that Chinese funds are more politically than commercially driven.
Public relations
"Chinese companies need to do more public relations to allay fears and address doubts concerning their investment purposes," Bew told a seminar last month. "You need to explain your business intentions, your long-term strategy and how you will handle the assets not only to targeted government or business officials but also to the wider community as well."
Bew's advice makes sense. It is in China's interests to portray a positive image in its foreign forays. But what happens if foreigners refuse to listen?
Setbacks haven't dented China's enthusiasm for investment overseas. Excluding financial market transactions, it expanded 1.8 percent in 2011 from a year earlier to US$60 billion. Investments in Europe and Africa surged more than 50 percent, according to the Ministry of Commerce. In the first quarter of 2012, outbound investment from China shot up 94.5 percent to US$16.5 billion.
Huang isn't feeling particularly enthusiastic anymore.
"The rejection sent a message to Chinese investors that you are welcome to emigrate or to buy properties and luxury goods, but if you want to engage in anything related with natural resources, you are not welcome," Huang said.
One can sympathize with his disillusion because the treatment accorded his company just doesn't seem justified.
Huang is undecided about whether to proceed with his resort plans given the restrictions placed on it. One thing is certain: Huang's fuzzy warm feelings toward Iceland have certainly chilled.
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