South China businesses commit to PNG

One year ago Pacific Islands Trade & Invest (China) brought a business delegation from the Pacific to South China, featuring business-matching events in the major economic centres of Guangdong Province and launched a Chinese-language guide to investment in the Pacific Islands.

The Chinese business delegation engaged in a discussion in PNG.
The Chinese business delegation engaged in a discussion in PNG.

Today, the relationships formed on that visit are developing into valuable business opportunities for Papua New Guinea. PT&I recently co-hosted a business roundtable in Port Moresby with all of the Guangdong firms in PNG to assess progress made and opportunities for the future.

As a result of an introduction made on the October PT&I South China Mission, PNG Ports met Yantian Port, one of the world’s biggest port operators from Shenzhen, the giant city next to Hong Kong. A few months later, on a return visit, accompanied by PT&I China, PNG and Shenzhen Ports signed a cooperation agreement that is likely to lead to significant future investment in the ports of Port Moresby and Lae.

Shenzhen Energy, which manages massive power projects in China, also discovered the Pacific at one of the PT&I South China Mission events, subsequently opening a representative office in Port Moresby and currently bidding for major power projects in PNG.

Not only big business connections were made: On the delegation was small business owner Kathleen Johnson, of PNG’s After Dark Fashions, who met potential business partners in South China. Today, a year later, Kathleen is working with PT&I China to realise her ambitious plans to work with a Chinese investor to develop PNG’s first major garment manufacturing factory in Port Moresby, employing and empowering women.

The delegation in PNG,
The delegation in PNG.

On September 27, PT&I China Trade Commissioner David Morris co-hosted a roundtable with PNG’s newly-formed Guangdong Enterprise Association to take stock of the growing business ties. The companies expressed high expectations about future growth in South China-PNG trade, investment and tourism.

Some Chinese companies, such as Guangdong Foreign Construction (GDFC) Company and China Harbour Engineering, had been drawn to PNG initially to work on aid-funded infrastructure projects and have since successfully bid to undertake commercially funded projects. GDFC recently completed new student accommodation at the University of Goroka, ten years ahead of schedule and China Harbour has built important new roads in the capital. Next GDFC plans to build the new Enga Province hospital.

Guangdong Province is where China’s modernisation began 35 years ago and today it is a US$1 trillion economy featuring many of China’s leading global companies. A natural partner for the Pacific Islands, Guangdong has exported its people to the region for centuries and now has businesses looking to invest in building tourism, trade and investment links with the region. Indeed, the Chinese Government has nominated Guangdong to take the lead in its “21st Century Maritime Silk Road” strategy to build infrastructure and logistics links for trade with development partners including the Pacific.

Guangdong is actively developing cultural cooperation and people-to-people links, including a series of healthcare and education assistance projects. Shenzhen, has become sister city with Port Moresby and Guangdong has become sister province with East Highlands Province. Guangdong helped PT&I China to exhibit leading PNG artists at the Shenzhen International Cultural Industries Fair in May this year.

A major new investor, Vivafounder, has recently completed surveys for a 200,000 hectare forestry, agriculture and tourism project to support sustainable development in north western PNG, working in close consultation with local communities. Guangdong company Artepharm is providing new anti-malaria medicines for an ambitious Chinese-Australian aid program to eliminate malaria in PNG.

Some Guangdong companies have been in PNG for some years, such as Communications giant Huawei, which has its regional HQ located in Port Moresby, servicing its broadband and other projects across the Pacific Islands region. Huawei has recently been engaged to develop the PNG Government’s broadband network, electronic identity card and submarine cable network and has projects in Vanuatu, French Polynesia and Samoa. Of Huawei’s 100 PNG staff, half are local and half from China.

Metallurgical Corporation of China (MMC) has had a difficult but ultimately successful investment in PNG’s $2 billion Ramu Nickel project, including putting in place international standards and learning to place local economic and social development first. In the next few years, Guangdong Rising Assets Management Company (owner of Panaust) expects to develop the giant Frieda River mine, one of the largest undeveloped deposits of copper and gold in the world.

At the roundtable, Guangdong companies frankly discussed some of the challenges of doing business in PNG, from the difficulty of obtaining visas to law and order concerns. Optimistically, all agreed that they had learned much about corporate social responsibility and had developed a strong commitment to supporting sustainable and fair development to benefit their PNG workforces.

For more information, please email Vivienne Song, Manager Tourism, Media and Marketing at vivienne.song@pacifictradeinvest.org.cn

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