Ground-up understanding key to success of Chinese investments abroad

China recently experienced two setbacks in its energy infrastructure investment efforts in Asean countries. The first was the suspension of construction of a Chinese-backed hydropower dam project in Cambodia. The second was the cancellation of Chinese technical involvement in a Philippine power grid project. In addition, Thailand recently downgraded its collaboration with China on the construction of a high-speed rail network.

Chinese investment, especially in energy and connectivity infrastructure projects, has been pouring into member states of the Association of Southeast Asian Nations and elsewhere, but these project suspensions raise important questions.

It's certain that China needs to fix some things. The most important is its image within Asean and, specifically, the image of Chinese products and investors. The fact that cheap, low-tech, made-in-China commodities are sold everywhere in Asean countries may have affected the image of the technology, and the quality of the infrastructure projects that Chinese companies have invested in. Such correlative thinking is just human nature.

Good communication with the public and a country's regulatory bodies, as well as good project planning that is well integrated into local development plans and meets local regulations, are key to successful infrastructure projects.

In addition, because the impact of energy and connectivity infrastructure projects often crosses borders, Chinese players need to coordinate multilaterally with Asean countries.

However, it is not easy for Chinese companies to carry out these responsibilities alone. Instead, it requires long-term efforts coordinated by Chinese industry associations or international cooperation agencies. The Chinese government, industry associations and companies must play a concerted role in overseas investment.