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Managing projects along the Belt and Road route


04-19-2017 13:45 BJT

Full coverage: Belt and Road Forum for Int'l Cooperation

(Source: CGTN)

As Chinese companies become more engaged in world trade, many are undertaking massive industrial projects overseas. Launching these projects is quite an achievement, but managing them sustainably is another story.

Chinese companies are actively investing overseas. Clothing maker Hodo Group in Wuxi, Jiangsu province operates an economic zone in Cambodia. The company could tell you that among the many reasons for Chinese firms to move productions to that country, there’s a very specific consideration.

"Cambodia is still one of the least developed countries, so it doesn’t have trade tensions with developed nations. For example, some of our car makers face a 78 percent tariff in the US. But if they export from Cambodia, they won’t face any tariff," Jack Chen, president of Sihanoukville Special Economic Zone Co., said.

But managing projects in developing countries also comes with its challenges. Hodo Group needed to deal with the locals who were mainly peasants.

"The locals used to tear down our walls the night they were built. Our constructions sites were frequently vandalized. After some investigation, we found out that the locals were worried that once we come in, they won’t have free land for herding," Dai Yuee, vice chairman of Sihanoukville Special Economic Zone Co., said.

Today the zone is welcomed by the locals. The company’s chairman said channelling a message of social responsibility is key to turning public perception around.

"Before the zone was set up, the locals earned on average 400 US dollars a year. Now many are factory workers, and they earn on average 1000 dollars a year," Zhou Haijiang, chairman of Hodo Group, said.

Challenges for investing in developed countries is another story. The Zhejiang-based Chint Group acquired a solar panel factory in Germany in 2014 in order to bring in their smart manufacturing expertise, and also to get around anti-dumping tariffs for Chinese made solar panels.

As Chinese companies expand their operations all around the world, it has become an imperative to understand and deal with the country-to-country differences in politics, culture and business systems.

Chint was going into a country with strong labor union.

"We accept 100 percent the management team from the original factory," Huang Haiyan, vice president of Chint New Energy Co., said.

Huang said managing production lines in Europe usually require a different set of cost-benefit calculations compared to that in China.

"We have four shifts for the production line to keep 24 hour running. In China we only need to prepare 2.5 shifts, because a lot of employees are happy if they have some overtime. But in Germany it’s totally different. They really don’t want to have some overtime work. So that’s why in Germany, our factory at least have 5 shifts," Huang said.

The companies said knowledge like these are critical for any Chinese firms wishing to expand overseas, as addressing these issues would determine the life and death of their projects.

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