AS allied forces stepped up air strikes to oust Muammar Gadhafi s regime in Libya, China has decided to halt its investment activities in the North African country amid reports that some of its companies may have suffered heavy losses due to the crisis.
China will not make new investments in Libya in the short term until the situation stabilizes, an official with the Chinese Ministry of Commerce was quoted in domestic media as saying.
Before the situation becomes stable, the exchanges between China and Libya in terms of trade, construction contracts and investment will be seriously affected. I am afraid that China is unlikely to make any new investments there soon, Yao Jian, spokesman for the Ministry of Commerce (MOC), said Tuesday.
China has 50 large projects worth US$18.8 billion in Libya. The country s evacuation of workers from Libya posed great difficulties for the operation of the projects, Yao said.
The government is evaluating Chinese companies losses in Libya, he said
China s investment in Libya is mainly in the energy and construction sectors.
Some Chinese project contractors, including China Gezhouba Corp. as well as China Railway Construction and Metallurgical Co, have projects in Libya.
China has pulled out over 35,000 of its nationals working in various projects in Libya in what was regarded as the country s largest evacuation operation since 1949.
We are closely following events there. But before everything gets back under control. We will not send any people there, said Zhang Hui, spokesperson for Shenzhen-based ZTE Corp.
ZTE Corp. is the largest telecom equipment provider in Libya, and has made investments worth 3 billion yuan (US$457 million) since 1999.
Experts predict the losses Chinese companies incur from the Libyan unrest will be big.
Some executives at ZTE Corp. said the company will probably lose 100 million yuan in the Libyan turmoil, China Daily reported.
The Commerce Ministry s Yao had urged Chinese companies that want to expand their business in Africa to raise their awareness of guarding against risks, especially political risks.
China Export & Credit Insurance Corp. has launched an urgency settlement mechanism after the unrest swept through much of the Arab world, raising the risks in some nations and sending warning messages to Chinese exporters.
However, many experts said China s determination to invest in Africa will not change.
Although the investment in Libya gets delayed, China s investment in Africa will not be affected, said Wu Fang, senior researcher of China-Africa Research Center of International Trade and Economic Cooperation.
We are not too worried about the business in Africa, as we have projects in many African nations and could shift the human resources and efforts elsewhere, said Jin Chengsan, chairman of the trade union of China Gezhouba Group International Engineering Co.
(SD-Agencies)
