Asians warned on China investment

PUBLISHED : Wednesday, 30 June, 1993, 12:00am
UPDATED : Wednesday, 30 June, 1993, 12:00am

SOUTHEAST Asian Chinese are emerging as the dominant investors in China, responsible for between 75 and 80 per cent of money poured into the country over the past 12 months, says Pacific Rim Conference chairman Alan Carroll.

At the same time, the loss of capital investment from the investors' own countries had the potential of becoming a ''politically sensitive issue'', Mr Carroll warned yesterday when announcing the agenda for the conference gathering in Bali, Indonesia on September 5 to 8.

He said governments of the countries involved could interpret the business transactions as pouring money back into an ''ancestral homeland''.

''The attitude of the investors' domestic countries towards the massive capital outflow into the Chinese market could be one where it raises the question of 'Whose side are you on?'.

''It is an emerging sensitivity, a real question which is greatly unspoken still, but a real issue.'' Mr Carroll said that to companies, investment in China was hugely attractive and regarded and transacted purely on an economic basis, but governments might take a different view.

If those countries believed that the investors were taking away money which should be used for their own country, old ethnic problems might re-emerge.

''The old line that flows from it is 'We always said, a hundred years ago, that they would rather invest back in China, and then here now we're seeing it'.

''So you can start to build this ethnic stereotype of 'the enemy'.

''But intelligent bureaucrats and corporate people must realise the sensitivity and have to manage it so that they don't go out of their way to look stupid.

''Managing the politics and economics will be quite interesting and it could be a political time bomb if not managed properly.'' The Pacific Rim Conference is a major platform organised for the commercial, political and opinion leaders of the Asia-Pacific region.