Be aware of trade deals: Barker

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EXTENSIVE engagements with China in trade, education, investment and contracting, including under the Belt and Road initiative, is desirable, but it should also be tempered with awareness and some caution, an economist says.
Institute of National Affairs (INA) executive director Paul Barker told The National that Chinese financing from the Exim Bank, under the Belt and Road initiative, was often not the most competitive financing source.
Barker said it often came with an array of conditions such as use of a Chinese workforce, plant and equipment, so PNG should be ready to explore the market and be prepared to negotiate firmly in its own best interest.
“Although Chinese financing often seems the most readily accessible, sometimes it poses risks, notably with State-owned enterprises of driving those entities into insolvency, as experienced in various other countries, with the danger of them then being taken over and run by the Chinese corporation or lender,” Barker said.
“Therefore, it’s critical that the PNG State and its SOEs (State Owned Enterprises) undertake proper analysis.
“Do not push into agreements prematurely.
“Ensure proper competitive tendering and, if won by a Chinese corporation, that firm negotiations are conducted to ensure a high level of PNG content, including workforce, independent design and oversight to ensure it meets requirements and PNG standards.”