simon zadek

The China Council for International Co-operation in Environment and Development (CCICED) has been around since 1992 as a high-level bridge between the international community and China’s leadership on environmental and broader sustainable development issues. And this week my membership of the CCICED’s Task Force on Trade, Investment and Environment (ITE) brings me to the Jingzhihu Resort Hotel outside of Beijing for its final, face-to-face meeting before completing its report to the next CCICED meeting later this year.

China’s ‘outward foreign direct investment’ (OFDI) is the main focus of our work, a topic in its application to Africa I have covered in previous blogs and publications. Perceptions of China’s OFDI are outside of China almost universally conflicted, welcomed by recipient governments, and criticised by many players on the ground and most international environmental and social watchdogs. Brazil, one of the key destinations for Chinese OFDI, has recently banned majority foreign ownership of land, a new law specifically targeted at China’s considerable interest in purchasing land at scale.

Huawei, arguably China’s most important global corporation, has for the first time revealed details of its board members, including the basics, their names. And there is little doubt that this is because of its continued failure to establish a strong foothold in its role model economy, the USA. Blocked access by the US Committee on Foreign Investment in the United States, it is having to shape its image to fit its purpose and commercial imperative to become a trusted global player.

China’s OFDI will shape the watermark of the global economy this century. To date the numbers are very small. China’s total ODFI is estimated (don’t ask about the quality of the numbers) at about US$230 billion all told, less than 2% of global FDI, putting them today on a par with New Zealand and Austria. That said, the flow data paints a different picture, with China figuring as one of the fastest growing outward investors. Indeed, Orville Schell of the Asia Society Centre on US-China Relations has made the point that the USA will suffer competitive disadvantage if it continues to block Chinese investment as a key source of capital for the development of its domestic economy – oh how times change!

The CCICED Task Force has a bunch of really smart people and key Chinese institutions, including the National Development and Reform Commission, the Ministry of Environmental Protection, and the Chinese Academy of Social Sciences, and co-Chaired by Brazilian John Forgach and Professor Jiahua Pan from CASS. Sitting now listening to them debate the facts and the issues, it is clear that there is a deep commitment to improving China’s OFDI practice as well as profile. Reviewing the results of a recent visit to Indonesia, whilst polite, it pulled few punches, highlighting everything from illegal logging and corruption as well as the smart, green and responsible things that Chinese companies are doing on the ground.

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