Chinese Firms Caught Up In Libya Unrest

State media are reporting attacks on Chinese firms working in Libya as unrest continues in the North African country. No fatalities have been reported but there is word of injuries. (Update: 15 are reported to have been seriously wounded.)  Workers are quoted as saying that nearly all Chinese companies in the country have been attacked or looted. It is not clear if Chinese businesses were targeted or whether they were just caught up in the general violence. South Korean firms have also been attacked, but, equally, that could also be a case of mistaken identity. Eighteen months ago, Chinese businesses in Algeria were the focal point of a violent backlash against the growing Chinese business presence in North Africa.

China’s trade and investment in Libya is modest but has been expanding since the U.N and the U.S. lifted their sanctions against Libya in 2003 and 2004 respectively, opening the way for Gaddafi’s pariah state to reengage with the world. Two-way trade reached $6.6 billion in 2010; Sinopec buys 6 million barrels of crude a month from Libya. Chinese companies have won a reported $21 billion of contracts to develop infrastructure in Libya, with Italian, Turkish and Russian companies providing stiff competition. ZTE, and Huawei have won telecoms contracts. China Railway is working on $2.6 billion worth of rail projects as Libya restores the rail network it abandoned in the 1980s. China Civil Engineering Construction Corporation is a general contractor. Chinese companies also have a joint venture with a Libyan state investment fund in a controversial rice farming project in neighboring Mali.

In all there are some 30,000 Chinese working in Libya, mostly in the construction and oil and gas industries. Chinese operations known to have been attacked in recent days include a construction site in the eastern city of Agedabia run by Huafeng Construction, which was looted, forcing nearly 1,000 Chinese workers to flee. Separately,  83 employees of China Building Technique Group, a state-owned architectural design firm, working in Tobruk evacuated to Egypt, where the Chinese embassy has temporarily stationed staff near the border with Libya.

Libya is Africa’s third largest oil producer and fourth largest natural gas producer. China has been trying to ease its way into the energy sector, which is dominated by BP and Italy’s ENI.  In  2009, Libya vetoed a $462 million bid by China National Petroleum Corp. for Canada’s Verenex Energy, which operates in Libya, and bought it itself. Chinese oil survey teams have since been active in Libya. CNPC announced last year its first find, a small oil and gas field in the Sirte Basin, which holds four-fifths of Libya’s proven oil reserves.

The fighting in Libya, in contrast to what happened in Egypt and Tunisia, has been on a scale that has made it difficult for China to ignore. The foreign ministry spokesman says China is concerned about the current situation in Libya, and says it will protect its nationals and firms in the country. Vice Premier Zhang Dejiang has been deputed to organize the evacuation of Chinese citizens from Libya. Chinese vessels in the Mediterranean have been put on standby to provide medical and other emergency supplies for Chinese nationals.

Update: Nearly 3,000 Chinese nationals including embassy staff are being evacuated to Tunisia by a fleet of some 100 buses. Meanwhile, an Air China airliner left Beijing on Wednesday for Libya carrying an official evacuation task force. Four liners have also been chartered in Greece and Malta for sea evacuations.

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2 responses to “Chinese Firms Caught Up In Libya Unrest

  1. Pingback: CNPC Confirms Attacks On Libyan Operations | China Bystander

  2. Pingback: Adding Up The Business Cost In Libya | China Bystander

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