Local employment especially crucial in African countries, expert says

Besides the cheap consumer goods, roads and bridges it has taken to foreign nations, China should focus on creating jobs in regions, such as Africa, where they are needed, a former government official has suggested.

Wei Jianguo, former vice-minister of commerce and secretary-general of the China Center for International Economic Exchanges, a top-level think-tank, urged the authorities to standardize "localization" efforts by Chinese companies investing abroad, so that they recruit more local employees as the world's second-largest economy accelerates the pace of its overseas expansion.

Chinese and African workers at an oilfield in Sudan. While boosting its global presence, China is helping to build a significant number of infrastructure projects in foreign countries, and is also creating more job opportunities abroad.TONG JIANG / FOR CHINA DAILY

"Chinese companies have made big contributions to local communities when they expand abroad, such as building roads and schools, but that's not enough yet," said Wei in an interview.

"As far as I know, more than one-third of Chinese companies are still indifferent to the issue of local jobs, although many have local employees, which account for more than half of the total.

"Chinese companies should, from now on, prioritize the creation of more local jobs and strive to be responsible corporations in foreign communities," he added. "Otherwise, their overseas businesses will neither prosper nor last for long."

According to the Ministry of Commerce, China's ODI in the non-financial sector in 2012 rose 28.6 percent from a year earlier to $77.22 billion, which made the country the third-largest investor globally, after the United States and Japan.

In the first half of the year, China's non-financial ODI increased 29 percent year-on-year to $45.6 billion. Gao Hucheng, minister of commerce, said on Wednesday in a group interview that such growth momentum would be sustained in the second half.

While expanding its global presence, China has helped to build a lot of infrastructure projects and has provided significant foreign aid to many foreign countries, but "more and more foreign countries and officials are increasingly pushing for more local job opportunities, requiring Chinese companies to address this specific issue", said Wei, who is also a guest economist at the China Daily.

He specifically cited Africa. "Many leaders from African nations blame Chinese companies for ignoring what they desire most: local jobs. And they strongly expect Chinese companies to recruit more local people in Africa when they expand in whatever way, including setting up plants, working on infrastructure projects and bidding for more engineering contracts."

Last year, South African President Jacob Zuma bluntly warned that an unbalanced pattern of foreign trade between China and Africa was "unsustainable".

Wei suggested that Chinese companies increase their investment to provide local employees more training programs tailored for their specific jobs when they expand abroad.

He also urged Chinese authorities to release "detailed and clear rules" to guide domestic companies expanding abroad, so that they recruit a certain proportion of local employees.

He pointed out that companies involved in natural resources and infrastructure projects should expand the proportion of local employees.

"Chinese companies which would strictly implement the rules would be highly recommended for projects abroad. But if some failed to meet the requirements, they should be either punished or banned from further expanding abroad," Wei said.