BEIJING - The suspension of a $3.6 billion joint hydropower project in Myanmar in September has sent alarming signals to Chinese companies investing in emerging markets, said Luo Zhaohui, director-general of the Asia Department of the Foreign Ministry.
Beijing will boost political and diplomatic backing for its companies overseas, particularly in Asia, the most preferred and concentrated destination of Chinese investment, Luo said during an online interview on Thursday.
By the end of 2010, 71.9 percent of China's foreign direct investment, which totaled $300 billion, was based in Asia, official figures showed.
"As the scope of these companies broadens, the risks and challenges they face, such as shifts in political affairs, disruption by external factors and a lack of experience in operating internationally, are rising as well," said Luo, a former ambassador to Pakistan.
Thursday's interview, the first in a series with a dozen senior Chinese diplomats, was co-hosted by websites of People's Daily, China Daily, China News Service and the Foreign Ministry.
Myanmar President Thein Sein's sudden suspension of the Myitsone hydropower plant, a project both sides agreed upon in 2006, on Sept 30, came as a surprise to many. The country's foreign minister and vice-president paid consecutive visits to China to hold consultations in the wake of the incident.
The two countries are still in the process of properly resolving the issue, Luo said, adding that China supports reconciliation efforts by the Myanmar government and is willing to see its relations improve with Western countries.
Yang Baoyun, a professor of Asian studies at Peking University, said State-owned companies should "be more cautious" in investing overseas.
"The overseas operation of large State-owned enterprises serves as a component of public diplomacy," he said. State-owned China Power Investment is Myitsone's largest investor.
At the diplomatic level, Luo said Beijing is calling on relevant countries to ease sanctions against Myanmar to facilitate the stability and development of the country.
William Hague on Thursday became the first UK foreign secretary to visit Myanmar since 1955. His visit came three months before the European Union is scheduled to hold its annual sanctions review, and followed an unprecedented visit to Myanmar by US Secretary of State Hillary Clinton in early December.
US billionaire investor George Soros recently wrapped up a weeklong trip to Myanmar, during which he met President Thein Sein and Aung San Suu Kyi, leader of the National League for Democracy.
In Beijing, Luo said the US' increasing strategic input in the Asia-Pacific is testament to the vitality, potential and growing significance of the region.
China is "fully capable of well managing its surroundings", he said.
Dismissing concerns of potential clashes as Washington's interests in Asia come to intersect with those of Beijing, Luo said Sino-US cooperation in the Asia-Pacific is the common aspiration of all countries in the region.
China respects the legitimate interests of the United States in the Asia-Pacific, welcomes the US to play a constructive role in regional affairs and urges it to "respect Asian characteristics, respect the Asian model and respect the interests of relevant parties", Luo said.
Beijing will be neither provocative nor afraid of tackling issues, he added.
"We're clear on where the bottom line of our interests is," said Luo.
He added: "We disagree with the concept of zero-sum games, and are not of the view that a rising nation will necessarily collide with an existing power. China is on the path of peaceful development, a path that we chose ourselves."
Shi Yinhong, a researcher at the China Institute of International Studies, said this reflects what President Hu Jintao told his US counterpart Barack Obama in November - that he hopes Washington, too, can respect China's legitimate interests in the Asia-Pacific.
China Daily
