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CHEC chief calls on govt support for firms in Africa

2014-05-06 14:32 Global Times Web Editor: Qin Dexing

A major Chinese enterprise operating in the African market has called for the government to increase its support for Chinese firms on the continent in order to stave off risks such as political instability in some African countries.

The call came as Premier Li Keqiang started his first official visit to Africa since taking office in March 2013. Li is visiting Ethiopia until Tuesday. The trip will also take him to Nigeria, Angola and Kenya.[Special coverage]

China's economic presence in Africa is now focused on infrastructure development, extraction of resources and telecommunications.

By the end of 2013, China's direct investment in Africa reached $25 billion, data from China's Ministry of Commerce showed.

China Harbour Engineering Co Ltd (CHEC), a centrally administered enterprise, has more than 20 branches across Africa. One of its major markets in the continent is Angola, the third stop of Li's visit.

Lin Yichong, president of CHEC, told the Global Times in Beijing that the company's total contract value in Angola stands at $2 billion, including two port construction projects in the capital Luanda and coastal town Lobito.

"It lets us see the prospects of African market," he said.

Lin regards Premier Li's visit as a positive signal, which shores up Chinese enterprises' confidence in expanding their developments in Africa.

Despite a rosy picture for the continent's prospects, Lin admitted there are still various barriers hindering Chinese companies' development, such as inadequate legal environments, divided policies and weak social stability.

He named political instability in some African countries the biggest concern, as the frequent changing of regimes would push up investment risks.

After coming into power, some African governments had scrapped business deals signed under their predecessors, leading to the loss of foreign investors.

"We hope the Chinese government could sign bilateral investment protection agreements with as many African countries as possible," Lin said, noting most of the countries in which CHEC has projects don't have such agreements with China.

On April 9, in a meeting with his Namibian counterpart in Sanya, South China's Hainan Province, Premier Li expressed his hope that a bilateral investment protection agreement could be approved by Namibia at an early date.

"We also hope [China's] diplomatic missions in Africa could provide relevant guidance for our investment so as to minimize the risks," Lin said.

Amid China's economic slowdown, there has been concern about how much the African economy will be affected, as a result of declining investment interest by Chinese companies caused by a tightening of lending in China.

Lin acknowledged financing cost is rising, but noted that developing the African market wouldn't be compromised, as it is a long-term strategy for CHEC.

"But amid the credit tightening in the country, we do hope the government can roll out more favorable policies for overseas economic expansion, as overseas development could help absorb domestic overcapacity," he said.

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