More involvement needed by Chinese SMEs to generate employment in B&R markets

By Wang Jiamei Source:Global Times Published: 2017/12/6 20:53:39

As Chinese companies' mega infrastructure projects encounter setbacks in some neighboring countries, it may be time for China to put more emphasis on encouraging the overseas development of its small and medium-sized enterprises (SMEs), which could provide a breakthrough for the Belt and Road (B&R) initiative.

According to, Nepal and Myanmar recently cancelled three major hydroelectricity projects planned by Chinese companies. There are several economic and political reasons behind these decisions: financing terms and repayment periods, pressure from Western media and opposition from local political parties.

But these developments underscore the difficulties for Chinese companies in pursuing infrastructure projects along the B&R route.

There is no denying that the construction of infrastructure projects is of great importance to the B&R and the economies of the B&R countries and regions, but the current challenges faced by Chinese companies in these projects represents a lack of local support, to a certain extent.

That means that closer ties between Chinese companies, especially SMEs, and local interests are needed to move forward with infrastructure projects in B&R markets.

Many Chinese businessmen already went abroad in search of expansion opportunities over the past few years, but most of them are only engaged in trading business in overseas markets. China should provide more support to encourage those SMEs to set up manufacturing facilities in the B&R markets.

If these Chinese-owned facilities can help create jobs in those places, Chinese companies will blend better into the local societies and economies, establishing a strong foundation and firm support for future large projects from China.

As an example, take Indian companies' investment in Nepal. Those Indian companies are active in a wide range of business activities in Nepal, ranging from hydropower projects to IT and the services sectors, and they are deeply involved in the locals' daily lives.

About 525 Indian companies created 58,161 jobs in the country in 2013, according to a report by Indian news agency IANS in January 2014, citing statistics from Nepal's Department of Industry. Indian yoga guru turned entrepreneur Baba Ramdev also announced late last year plans to invest billions of rupees in the country that would eventually create 20,000 jobs for Nepalese youths.

China is now Nepal's largest source of foreign direct investment, but Chinese companies mainly focused on tourism, telecommunications and some agro-industry, which were less diversified and created fewer jobs compared with Indian companies.

China should pay more attention to the bonds between Chinese SMEs and the public in B&R markets. Making those bonds stronger could serve as a strong foundation for major infrastructure projects.

The author is a reporter with the Global Times.


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