Investments that officials attract should not sway their evaluations

THE LOCAL GOVERNMENT IN HANDAN, North China's Hebei province, recently said it suffered heavy losses in a 2008 project with expected investment from a South Korean company that called itself Hyundai Construction Group, which later turned out not to be part of the Hyundai Group as the government believed. Beijing News comments:

The Handan municipal government meant to attract foreign direct investment from the South Korean company, but actually it lost money in the process. Reports show that the investment by the local government - all taxpayers' money - was as much as 600 million yuan ($87.25 million), which was lost after the construction projects that they were "co-working" on came to a halt.

The South Korean company cheated in a rather simple way, analysts said, because a misrepresentation made it look like it was part of the Hyundai Group. The Handan government, which had the company's materials in different languages, failed to spot the differences in the Korean and Chinese materials provided by the company and as a result, suffered the loss.