BEIJING - Those who believe that China is actively cooperating with potentially aggressive regimes specifically to spite the United States are wrong. Chinese companies have recently been much more free to choose their business strategies. And they are choosing Libya, Iran and Iraq as partners because they see it as the only way to expand their markets. Huawei Technologies, one of China's largest makers of telecommunications equipment, is suspected of supplying Iraq with fiber-optic cables needed to upgrade its military communications network. The United States has warned Chinese authorities three times this year that the company's activities are unacceptable. Huawei, for its part, denies all the accusations. "We only implement projects in Iraq that have been sanctioned by the United Nations," Zu Hui, the company's head of Middle East marketing, said Friday.

For Huawei, like many other Chinese companies, trading in troubled regions is a common practice, a means of establishing itself in the global market, starting with outsider countries. In countries such as Iran, Iraq, Myanmar and Sudan, there is virtually no competition for Chinese businesses. "These companies do not attach much importance to the moral aspect of relations with pariah states," says one Western diplomat based in Beijing. "The main thing is to make a quick profit."

China has long provided technical support to friendly countries (often in difficult relations with the United States). Beijing now welcomes the easing of sanctions on Iraq, as it allows China to obtain oil needed for its rapidly growing economy and also provides a counterweight to the growing influence of the United States in the world. In December, a Chinese government delegation visited Iraq, including representatives from the Ministry of Foreign Trade and Economic Cooperation.

But few analysts believe that the companies rushing to the global market are acting on orders from the government. Over two decades of economic reform, the direct link between the Chinese government and business has weakened. As a result, the government has been unable to force Chinese companies to invest in poor regions in the west of the country.

"There should be no misconception about Huawei's activities in Iraq or the machinations of the government," says Patrick Horgan, director of Beijing-based consultancy Apco China. "It's simply about profitable business."

Other companies are also cooperating with Iraq. Late last year, Sinopec won several contracts to develop new oil fields in Iraq. Chinese National Machinery & Equipment Import & Export built a $75 million power plant in Iraq in 2000, the first such project since the 1991 war.

Chinese business is also active in other countries accused of violating human rights and aiding terrorism. For example, Sinopec trained specialists for Sudan. Shanghai Bell Corporation, according to the Xinhua news agency, supplies telecommunications technology to Iran, Iraq and North Korea. (WSJ, 5. 03. 2001)

Business is more important than politics