Chinese SOEs should learn from ZTE and Huawei and get local partners, says Sri Lanka business council chief
Sri Lanka business council chief says partnerships help limit controversy
Chinese companies should learn from ZTE and Huawei and get local partners to insulate them from controversies like the one raging over the US$1.4 billion Colombo Port City project, says Sri Lanka-China Business Council president Navindra Abeyesekera.
"Local partners instil confidence in the regulator and the government. Not tying up with local companies is one of the biggest mistakes Chinese companies made," said Abeyesekera.
He cited the example of Dialog Axiata, which operates Dialog Mobile, the country's largest mobile network. With a market capitalisation of more than US$1 billion, the subsidiary of Malaysia's Axiata Group is among the biggest listed firms in Sri Lanka.
"They came in with a local partner, then went for a local listing. That's how you make locals stakeholders in your company's success. But the Chinese do not know this model. The Port City company has no local partners, Avic (Aviation Industry Corp of China, whose subsidiaries are building highways and luxury apartment blocks in Sri Lanka) has no local joint venture," said Abeyesekera.
"On the other hand, look at ZTE and Huawei. They have local partners and they are doing very well. State-owned enterprises (SOEs) should learn from them."
Promoted by state-owned and Hong Kong-listed China Communications Construction, Colombo Port City has become a bone of contention between China and Sri Lanka ever since the new government suspended it this month over corruption allegations.
A high-end real estate project on land reclaimed off the capital, Colombo Port City is the most prominent of the Chinese-backed mega infrastructure projects that have come under the scrutiny of the government of President Maithripala Sirisena, who defeated pro-China Mahinda Rajapaksa in January.