Natalie Bridgeman Fields

The View | China’s promise of responsible belt and road investments is in the hands of its bankers

All along the belt and road, from Myanmar to Peru, ignoring community feedback is costing Chinese investors dearly. China’s banks and financial institutions need to quickly adopt an accountability framework for Chinese investments abroad

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An environmental activist in costume during a protest against the Chinese-financed coal plant project in Kenya, outside parliament house in Nairobi last year. The project has stalled due to the storm of unhappiness locally. Photo: Reuters

Natalie Bridgeman Fields

Published: 2:00pm, 12 Jun 2019Updated: 10:27pm, 12 Jun 2019

Over the past few months alone, Chinese banks and corporations have been reinforcing a negative reputation with local people in places like Kenya, Myanmar and Peru, where Chinese-supported projects are taking root. In Kenya, communities have been raising concerns about harm from a coal-fired power project, sending three years of unanswered letters to the Industrial and Commercial Bank of China (ICBC), which is financing it. Kenyan litigation has stalled the project.

In Myanmar, officials recently arrested Chinese nationals employed at three Chinese agribusiness companies for operating in protected forest reserves. Also in Myanmar, a Chinese-sponsored dam is facing intense opposition from local people. In Peru, local people protesting against the Las Bambas mine, a project of the Chinese firm MMG, have stopped production due to disputes over land use, compensation, and abuse of local people.

This investment approach which ignores community feedback is costing Chinese firms dearly.

Such community protests over the years are bringing about a conversation between some Chinese policymakers and regulators on how to prevent and avoid harm from Chinese investment. This conversation has the power to transform China’s approach to the trillion-dollar Belt and Road Initiative.

The aspirational talk about the national importance of “greening” the Belt and Road Initiative may be precisely because of this reputational blowback. Regulators in China seem to be considering a new, wider interpretation of “green”, including the potential adoption of accountability frameworks for Chinese overseas investment.