Chinese investments not cause of poor governance in Southeast Asia

By Ding Gang Source:Global Times Published: 2013-9-26 1:08:01

Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

China's investments in Southeast Asian countries have often been controversial. Critics are picky about the political systems in the countries that have accepted China's investment, or concerned about legal issues brought by the investment, believing Chinese investment does not effectively promote good governance.

Problems are bound to occur when foreign capital enters countries with a relatively weak legal system such as Laos, no matter whether such investment comes from China or the US. But one thing is for sure: Without foreign investment, the problems in Laos would only have been worse.

It is easy to simply talk about good governance and a legal system, but not everyone can really experience the lives of these countries. Unless one can endure the toughness of the roads and the hardship of life there, he will never be able to apprehend the real emotions of people who have been living in remote mountain areas for ages.

There, every villager will tell you that what they mostly need are roads and railways that could connect their villages with Vientiane and the external world.

Laos is a poor country. There are many people who have been residing in the mountains for years. Only with help from the outside world can they possibly realize their dreams of walking out of the highlands.

The Laos government has announced its ambitions to leave the least developed country list by 2020, while the key is to improve infrastructures by attracting foreign funds and thus speed up economic development.

Not only Laos' economic development will depend on how much foreign investment it attracts, but stable and orderly political reform and legal construction, based on economic development, is also closely related to foreign investment.

If foreign countries are to help these countries realize political stability, ensuring local economic growth must be a priority. Past experiences show that chaos will occur if economic development doesn't progress at the same speed as political reforms.

Investing in neighboring countries fits the interests of both China and these countries themselves. Without China's investment, people living along the Kunming-Bangkok Expressway are likely to remain in poverty and cannot benefit from the connection between China and Southeast Asia.

Indeed, China has encountered various troubles when investing in Southeast Asian countries such as Myanmar, Laos and Cambodia. Quite a few reasons are that the governments or systems of these countries are not transparent enough so that investment projects are hard to carry out legitimately or interests have been distributed unevenly.

But these problems are not brought by China's investment, nor should they become obstacles to China's entry. Those who object to China's investment in these countries for the sake of "good governance" are actually helping these countries head toward the opposite direction.

Being overcritical toward and applying Western standards to Chinese enterprises is neither realistic nor fitting local people's interests.

Chinese enterprises should adapt to such local political environment, and Western opinion should learn to be kind to Chinese investors.

Western colonists were present in these countries much longer than Chinese investors. They brought many laws and regulations, but not good governance. Meanwhile, the problems they have left are still hindering the development of these countries.

No one denies Chinese investment is relevant to the political reconstruction of the countries where investments are made. In fact, the Chinese government has already demanded Chinese enterprises do as the Romans do and many of them have behaved accordingly. They are actually doing a far better job in terms of social responsibility than their Western counterparts in these countries.

The establishment of a legal system needs a process. The conflicts brought by the entry of Chinese capital can precisely be the chance to promote the construction of a legal system.

Developing countries cannot wait for foreign investment only after a legal basis is established. Laws and regulations need to be improved amid the interaction between foreign capital and local societies.

China could provide more assistance for countries such as Laos in terms of legal system construction. For example, China can help train local law enforcement personnel and offer consultations. It is another kind of help if Chinese enterprises establish new norms through solving troubles.

As for the construction of a legal system, China has accumulated rich experiences from its three decades of reform and opening-up. These experiences better apply to developing countries than the rules set by the West.

The author is a senior editor with People's Daily. He is now stationed in Brazil.

Posted in: Counterpoint, Ding Gang, Viewpoint

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