Windhoek - Growing competition for business between local companies and Chinese investors that allegedly flout labour laws is stoking tensions in Namibia, a research institute in the south-west African state has warned.

Namibia's Allgemeine Zeitung newspaper on Thursday cited the independent Labour Research Institute (LARRI) as sounding the alarm over what it called "unacceptable" working conditions in Chinese companies.

The conditions, which fall short of minimum requirements under Namibian legislation, were stoking anti-Chinese sentiments in the country of around 2 million inhabitants, the report found.

"The government needs to intervene and control the immigration of Chinese and the working conditions at Chinese companies in Namibia," the Institute's Herbert Jauch was quoted as saying, warning of possible xenophobic attacks targeting Chinese.

Chinese companies are present mostly in the construction and retail sectors. Most of Namibia's largest construction projects have gone to companies from China, which provides development grants and loans to African countries.

Estimates of the number of Chinese nationals living in Namibia range from 3,000 to 10,000.

A study into Chinese investment commissioned by the National Union of Namibian Workers (NUNW) in 2006 showed that Namibian companies were paying about 8.44 Namibia dollars per hour as required by law, as against 2.50 to 3.50 dollars per hour in Chinese companies.

Jauch accused the government of at times awarding tenders to Chinese companies that did not respect labour laws.

The LARRI report is part of a ten-country study on the impact of Chinese investment in Africa, coordinated by the African Labour Research Network with funding from trade unions in the Netherlands and Finland. (dpa)