One Decade's Growth of the CAEXPO to Set up a Platform for "Going Global" -- Exclusive Interview with Diao Chunhe, Chairman of China International Contractors Association

Over the past 10 years as the CAEXPO has gradually grown mature, China’s international contractors have established good relations with enterprises from the ASEAN countries and gained remarkable achievements.

Closely Bound to the CAEXPO

After 10 years’ development, the CAEXPO has become an exchange platform for China and ASEAN to discuss cooperation. Investment cooperation, which is tailored for the CAFTA, includes international project contracting, labor service cooperation, resources, energy development and infrastructure construction. During the CAEXPO, a great many financing institutions, investors and contractors gather together and carry out discussions on cooperation.

Diao Chunhe, Chairman of China International Contractors Association (CHINCA) attended the CAEXPO each year. He said that, “From the 1st to the 10th CAEXPO, the CAEXPO’s foreign investment cooperation has gone through 10 years. Over the past 10 years as the CAEXPO has gradually grown mature, China’s international contractors have established good relations with enterprises from the ASEAN countries and gained remarkable achievements.”

“With the aid of the CAEXPO, Chinese enterprises’ contract amount with the ASEAN countries had exceeded $120 billion in infrastructure construction from 2004 to 2013, among which the revenue reached nearly $100 billion. And there are still a multitude of projects under negotiation”, Mr. Diao Chunhe introduced. Among those projects in negotiation, rail transit takes a large share, and the main projects include China’s railway projects with Thailand, Laos and Malaysia.

During the 10th CAEXPO, the China- ASEAN Infrastructure Cooperation Forum sponsored by CHINCA made a great success. Diao Chunhe said, “On the forum, the rotating president of ASEAN Infrastructure Fund elaborated on the application procedures and methods of the fund, and shared some experience from the Chinese and ASEAN enterprises on business development. All the enterprises participated felt quite benefited.” As one of the series forums of the CAEXPO, the China-ASEAN Infrastructure Cooperation Forum has invited trade associations of the ASEAN countries to discuss cooperation. By increasing the number of professional visitors, it has promoted more tangible cooperation.

Broad Prospect for “Going Global”

There is great potential and development space for the infrastructure cooperation between China and ASEAN. The ASEAN countries are the traditional markets of Chinese enterprises, and one of the markets for overseas contracting and investment. Under the economic downturn, the ASEAN countries are boosting their economy through increasing investment in infrastructure construction. This includes house building, railway repairing, rail transit, roads and bridges repairing, and water resources management, which are all closely related to national welfare and people’s livelihood. It has undoubtedly provided huge opportunities for the Chinese enterprises.

It is said that among those large-scale infrastructure construction projects of the ASEAN countries, many landmark constructions are undertaken by the Chinese enterprises. The Surabaya- Madura Bridge, a cross-sea bridge linking Surabaya and Madura, is a milestone project of China’s foreign project, and the symbol of the friendship between China and Indonesia. What makes this project different from other projects is that the bridge is designed by China and it adopted the Chinese standards, equipments and building materials. What’s more important, the bridge is of great significance to Indonesian economy.

Compared with the ASEAN countries, China has advantages in technology, capital and equipment. With these advantages, the Chinese enterprises have also engaged in energy projects like thermal power station, hydropower station, solar energy and wind power station. Diao Chunhe explained that, “Among Vietnam’s 11 300,000 kilowatt above power stations, 9 are built by Chinese enterprises. This shows that the Chinese enterprises’ ability and technologies have won recognition from the Vietnamese government and the Vietnamese counterparts.”

In recent years, more and more Chinese enterprises have their eyes on ASEAN for investment. With unremitting efforts, they have gained favorable economic and social benefits, and further consolidated China-ASEAN ties. With regard to this, Diao Chunhe claimed, there are still a lot of uncertainties and challenges despite the opportunities. The imperfect investment environment and investment laws of some of the ASEAN countries have posted certain risks for Chinese enterprises to invest there. This requires the Chinese enterprises to have risk awareness and get ready for challenges when engaged in project construction in the ASEAN countries.

Standing on a New Starting Point

“Both trade associations and their member enterprises are paying closer attention to the functions of the CAEXPO, for the CAEXPO has become a favorable booster for Chinese enterprises to enter the ASEAN market”, Diao Chunhe said with a glow of enthusiasm.

According to him, each time before the CAEXPO, the ASEAN enterprises would contact the CHINCA for information on projects and cooperation intentions, so as to reach more cooperation through communication. When talking about the future plans, Diao Chunhe felt very confident, “Based on the investment cooperation mechanisms, we are going to discuss the challenges we face and dig out more business opportunities, so as to reinforce the close cooperation between China and ASEAN.”

It is predicted that as global trade is recovering in 2014, infrastructure construction will continue to be the potential impetus for economic growth. Infrastructure construction in the ASEAN countries will usher in a new round of expansion, so Chinese enterprises need to get a head start and be more active when investing in ASEAN. Diao Chunhe claimed, a “bridge” is required in investment cooperation, and the CAEXPO is an inseparable bridge. “After 10 years’ growth, we expect the CAEXPO would bring more surprises for enterprises from both China and ASEAN”, said Mr. Diao at the end of the interview.