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270 Diagnosing Corruption in Ethiopia
work by Chinese contractors, particularly those that are now well established
in Ethiopia.
China’s role in road construction in Ethiopia is controversial,
generating sharply divergent views during stakeholder consultations. The
participation of some Chinese contractors both in the survey and in the
second stakeholder workshop of this study allowed the perspective of
Chinese SOEs to be expressed and, to a limited extent in the time available,
discussed. However, it did not prove possible to obtain the views of
the economic and commercial counsellor attached to the Chinese Embassy
in Addis Ababa despite significant efforts to do so. 11 It has therefore been
assumed for the purpose of this study that the approach taken and role
played in Ethiopia by the embassy, the China International Contractors
Association (CHINCA), new entrants, and flagship Chinese companies in
Ethiopia is broadly consistent with the general picture described in box
6.1. This picture is based primarily on international studies of Chinese
contracting in Africa (including Ethiopia) and does not contradict the
views expressed directly by stakeholders in Ethiopia.
As in other developing countries, some stakeholder groups within the
road sector in Ethiopia have concerns about possible collusion among
Chinese contractors to drive competitors out of the market by bidding
below cost and later increasing prices to market rates. Competent authorities,
including the World Bank, have studied the possibility of such collusion,
but insufficient evidence has been found to support any specific
allegations. In several cases, however, suspicions have been strong enough
to warrant the suspension and relaunch of the procurement process.
Box 6.1
Market Entry Strategies for Chinese Construction
Companies in Africa
The construction industry plays an important part in the implementation of
China’s Going Out strategy. The Chinese Ministry of Commerce (MOFCOMM)
recognizes this and encourages construction firms to invest abroad through
policy structures and financing systems (Chen and Orr 2009).
China’s Africa focus is geared primarily toward resource-rich countries but also
includes countries with strategic regional influence. The Chinese government
regularly commissions SOEs for infrastructural aid projects in countries where it
wishes to expand its influence.
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