Chinese firms pay dearly for Libyan unrest
April 07th, 2011 | Shanghai DailyThe unrest in Libya has cost Chinese companies dearly beyond the rising price of oil.
More than 30,000 Chinese workers were working in the north African country on infrastructure construction projects such as railways and telecoms before they had to evacuate.
At least 27 Chinese construction projects had suffered directly from attacks even before NATO air strikes occurred, according to the Ministry of Commerce.
More than 50 projects by 75 state-owned Chinese companies in Libya have been suspended due to the uprising that has pitted rebel forces against the army of Moammar Gadhafi.
Among those are four listed companies: China Railway Construction Corp, China Gezhouba Group Co, Metallurgical Corp of China and China State Construction Engineering Corp, the ministry said.
The value of projects in Libya is estimated at US$18.8 billion, according to Commerce Minister Chen Deming.
The value of unfinished contracts at suspended projects of the four listed firms is more than 41 billion yuan (US$6.25 billion), with China Railway Construction accounting for nearly 24 billion yuan, the State-Owned Assets Supervision and Administration Commission said.
China Railway shares lost 12.7 percent to 6.92 yuan since February. Gezhouba shares fell 22.5 percent during the same period, Metallurgical Corp was up 1 percent, and China State Construction gained 4.3 percent.
The losses in Libya have prompted the State Council, China’s Cabinet, to explore better ways of safeguarding Chinese assets in foreign lands.
The State Council is considering the establishment of a new department to take on that task, according to 21st Century Business Herald.