It says China will overtake the EU next year to become the region’s second biggest trading partner, behind the United States.
Going by past experiences, previously reported on chinadialogue, this might present cause for concern. In Peru, in particular, Chinese companies have failed to properly consult local communities, leading to conflicts with the Shougang mining development, for example.
The IIED report also suggests host country legislation and enforcement is important in determining the performance standards of Chinese companies. Brazil and Chile by no means boast perfect ways of operating with Chinese companies to promote sustainability, but the paper shows that their systems of legislation and enforcement are better at doing so than Peru’s.
In Brazil, Chinese investors have typically had to partner with local companies, which has meant that Chinese investors have had to comply with the sustainability agendas of local companies that are relatively stringent and well developed. Peru, on the other hand, is shown by the report to be more flexible in the types of investments it allows, and therefore, the authors argue, allows Chinese companies to function unsustainably.
The focus for the Peruvian government, says the report, is more on “encouraging investment than on regulating companies, understanding companies or preparing communities for the presence of new mining firms”.
In addition, in countries like Peru, where the legislative body is also in charge of attracting Chinese investment, the authors questions where the priorities lie.
Tom Jamieson is an intern at chinadialogue