Diagnosing Corruption in Ethiopia - Ethiomedia

Box 6.1 (continued)
Construction Sector Corruption in Ethiopia 271
Winning a tender for a government-endorsed contract enables the Chinese
company to secure low-cost capital from Chinese banks. Once established in a
country, the company then draws on its knowledge and experience to identify
more commercial opportunities. Where possible, it will register a local company
to gain better access to the construction market.
The economic and commercial counsels attached to the Chinese embassies
enjoy some autonomy but have as their primary responsibility the control and
coordination of Chinese business activities in the host countries. They interpret
their main role as being to provide information to Chinese companies. They also
authenticate and translate official documents issued in China, such as company
registrations and academic qualifications. The political support includes assistance
to Chinese nationals with any administrative problems they may encounter
with local authorities. MOFCOMM regulations require contractors to register with
the Economic and Commercial Counsellor’s Office upon entering a foreign country
for the first time (Chen and Orr 2009).
MOFCOMM’s Department of Foreign Economic Affairs does not restrict the
number of Chinese contractors that participate in an overseas market bidding
process, but it does require the China International Contractors Association
(CHINCA) to take responsibility for coordinating the Chinese contractors before
bidding commences. CHINCA is a nonprofit organization with corporate status,
approved by MOFCOMM and a member of the International Chamber of Commerce
(Chen and Orr 2009). Box figure 6.1.1 below provides a simple overview of
the Chinese government’s approach to organizing and controlling the Going Out
national strategy through overseas construction.
Box Figure 6.1.1 Control of China’s “Going Out” Strategy in African
Infrastructure Provision
Chinese
contractors’
entry into
Africa
coordinate, guide,
consult, and serve
control and
coordinate
finance
China International
Contractors Association
Economic and Commercial
Counsellors’ Offices
China Ex-Im Bank
Sources: International studies of Chinese contracting in Africa, including Chen and Orr 2009.
Chinese
government