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Spotty record for Chinese exec with canal dream

Sunday - 9/1/2013, 1:20pm  ET

ADVANCE FOR USE SUNDAY, SEPT. 1, 2013 AND THEREAFTER - FILE - In this June 25, 2013 file photo, Wang Jing, chairman of Hong-Kong HKND Group, left, watches a presentation detailing the proposed 286 kilometer (178 miles) long canal to be built in Nicaragua during a press conference held at a hotel in Beijing, China. While at least some of the domestic enterprises of his company, Xinwei, appear to be successful, outside of China, Wang’s company has participated in a series of troubled minor ventures. (AP Photo/Ng Han Guan, File)

Associated Press

MANAGUA, Nicaragua (AP) -- When President Daniel Ortega granted a Chinese telecommunications executive exclusive rights to develop a $40 billion canal through Nicaragua and operate it for 100 years, his administration touted the CEO's record of success heading a wireless communications firm with projects in 20 countries.

Wang Jing's company, Xinwei, boasted that it had orchestrated an array of deals worth more than $5 billion over the last three years, in places as far-flung as Zimbabwe and Ukraine. Its own literature describes the company as possessing "huge strength and sublime eminence in the global communications industry."

But an examination of those claims by The Associated Press around the world paints a different picture. While at least some of Xinwei's domestic enterprises appear to be successful, outside of China, promises to build revolutionary new telecom networks have yet to materialize. And deals with local partners have been marred by false starts and poor performance.

In 12 of the 20 countries where Wang's Xinwei Telecom Enterprise Group and associated companies say they've done business, the AP found no evidence of a successful, large-scale project up and running.

In the other eight, either analysts and major telecom firms said they had not heard of the company, or Xinwei did not provide enough details about its partners or projects to allow its record to be examined.

In Cambodia, a promised high-tech new wireless network has yet to launch nationwide after unexplained delays.

In Zimbabwe, officials say Xinwei's partner had its license pulled by regulators and assets seized by a local bank.

And in Nicaragua, where Wang has formed a new company to build a waterway that could be three times the length of the Panama Canal, there is no sign of a promised $700 million national wireless network more than a year after he announced his intent to build it.

That record is raising doubts among local businessmen, political opposition leaders and outside experts about the ability of Wang's new company to build the canal, a gargantuan project that has been considered and abandoned for centuries.

"This is just orders of magnitude beyond anything that they're capable of," said Derek Scissors, a senior research fellow who monitors Chinese overseas investment for the Heritage Foundation. "At this point it's just a stunt."

Beijing-based Xinwei told AP that its global telecom plans were moving forward in at least five countries outside China and it is working with investors to fund what it expects to be billions of dollars of new networks in Russia and Ukraine. It acknowledged that it had run into challenges in several countries, problems that ranged, it said, from malicious underpricing by competitors to delays in receiving government licenses.

"The company is fast-growing. It plans to become a first-class global company within the industry in years. We are making good progress toward the goal and understand there is much work to do," Xinwei said. "The progress of each project depends on our clients' plans."

Xinwei was founded in 1995 under the control of state-owned China Datang Corp. It developed wireless telecommunications technology that is supposed to function as an alternative to better-known standards that are ubiquitous in much of the world. The company appears to have successfully marketed the equipment to Chinese state and private firms. But elsewhere, the technology didn't take root, contributing to Xinwei's financial struggles before Wang took it over in 2010.

Wang, 40, told The Associated Press that he bought 37 percent of Xinwei for $16 million of his personal funds and quickly turned it around, to the point where the company made a $300 million profit last year.

He said that after the 1995 failure of his first business venture, a school of traditional Chinese medicine, he went to Hong Kong and became involved in finance and investment management. Wang said he began to invest in mining in 2007 and is full or part owner of gold mines in Cambodia and Thailand.

According to a Hong Kong database, he has been a director of about a dozen companies, some current, others dissolved. But even Chinese state-run financial news organizations have said they were unable to uncover much about him prior to 2010.

Still, Xinwei's website shows national leaders including President Xi Jinping and Premier Li Keqiang visiting the company, an indication of solid government connections.

Ronald MacLean Abaroa, a former World Bank official and Bolivian mayor who's become a spokesman for Wang, has described him as "a successful businessman in his country and other parts of the world."

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