Port operating giant DP World slams Chinese companies’ ‘predatory practices’

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US-China trade spat has had an impact, DP World CEO says

China's rapidly expanding footprint in developing countries around the world is facing mounting scrutiny, even as states across Asia and Africa compete for Chinese investment dollars.

Sultan Ahmed bin Sulayem, the chairman of DP World, the UAE's state-owned port operator and among the top four largest port operators on the planet by cargo tonnage, is among those critics. Speaking to CNBC at the World Economic Forum in Davos, he called out Chinese companies for what he saw as unethical practices in foreign countries.

"China as a government has great respect throughout the world. Unfortunately, the actions of Chinese companies don't reflect that," Bin Sulayem said. "They have taken predatory practices in something that (is termed) today to be a debt trap, whereby they overextend their debts to countries and eventually take their assets. This is something that tarnishes the reputation of China."

For Bin Sulayem and DP World, it's personal. The company in November of last year filed a lawsuit against China for what it termed an "illegal seizure" of port and free zone facilities on the Red Sea coast of Djibouti whose operation had been exclusively granted to DP World. It accused the state-owned China Merchants Port Holdings of unlawfully inducing Djibouti's violation of their agreement. UAE authorities also criticized the Djiboutian government for violating its terms with the port operator. The East African nation hosts Chinese and U.S. military bases and is seen as economically and military strategic.

"Unfortunately some of these companies, because they are flush with cash, this disturbs the balance around the world, and gives China a bad reputation," the chairman said.

Djiboutian people hold China's national flag before the launching ceremony of a new housing contruction project in Djibouti, on July 4, 2018. The new project is financially supported by China Merchants Group. YASUYOSHI CHIBA/AFP/Getty Images Djiboutian people hold China's national flag before the launching ceremony of a new housing contruction project in Djibouti, on July 4, 2018. The new project is financially supported by China Merchants Group.

China has poured billions of dollars into infrastructure projects across Asia and Africa as part of its Belt and Road project, providing what many acknowledge is badly-needed investment for developing countries — but what's at the same time sunk several nations into deep debt. Analysts point to Beijing's offers of cheap loans and then demands of control over infrastructure as compensation when those debts cannot be paid off.

In 2017, Sri Lanka, with more than $1 billion in debt owed to China, handed over a port to Chinese state-owned companies. According to the non-profit Center for Global Development, the countries most affected by Chinese debt include Djibouti, Kyrgyzstan, Tajikistan, Laos, the Maldives, Mongolia, Montenegro, and Pakistan, with the first three facing national debt at more than 75 percent of their GDP as of March 2018.

"I would say, you trust the Chinese government, you watch out for the Chinese companies," Bin Sulayem said. "Some of them are good, we have great relations with them. But some of them, unfortunately, they use tactics which are not acceptable in getting market share."

Of China's approximately 150,000 state-owned enterprises, some 50,000 are owned by the central government, with the rest belonging to local governments, according to the U.S. Department of Commerce.

Bin Sulayem isn't alone in his view. White House national security advisor John Bolton in December slammed what he called "the predatory practices pursued by China" as something that would "stunt economic growth in Africa (and) threaten the financial independence of African nations."

DP World is currently expanding its port projects in the disputed territory of Somaliland — which has enraged the federal government in Somalia — as well as in Rwanda, underscoring the growing importance of East Africa not just to China but to the UAE. DP World operates 78 ports in more than 40 nations.

Original Article

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