INSIGHT: In Africa's warm heart, a cold welcome for Chinese
Tue Sep 18, 2012 8:08am GMT
By Ed Cropley and Michael Martina
SALIMA/BEIJING (Reuters) - Malawians bill their country as the "Warm Heart
of Africa" and pride themselves on a reputation for friendliness. But Jaffa
Shaibu, a burly 32-year-old merchant in a clothes market in Salima, a dusty
town near the shores of Lake Malawi, feels less than welcoming to the
Chinese traders who have moved in over the past four years.
"The way it looks, one day there will be a big fight with them," Shaibu
said. "One day there will be blood."
Echoing a grievance heard across Africa, Shaibu and his colleagues in this
town of of 40,000 complain of Chinese businessmen with better access to
cheap imports of clothes, shoes and electronics, and deeper pockets that
allow them to reduce their margins.
That sentiment is part of a grass-roots backlash against Beijing's
increasing diplomatic and commercial clout in Africa.
In many ways, the relationship between the two has never been stronger.
Bilateral trade has almost doubled over the past three years, to $166
billion in 2011 from $91 billion in 2009. In July, Chinese President Hu
Jintao offered Africa $20 billion in cheap loans over the next three years.
China, he said, would forever be a "good friend, a good partner and a good
brother" to Africa.
But a growing number of Africa's billion people are less enthusiastic.
Last November, four Chinese in rural South Africa were burnt alive in an
arson attack on their home. In Zambia last month, miners in a dispute over
pay crushed a Chinese supervisor to death with a coal truck. In Ghana, armed
Chinese informal miners have clashed with gangs of local youths, triggering
a government crackdown. In Angola a few weeks ago, 37 Chinese men were
deported on suspicion of running a criminal gang that burnt its victims with
gasoline before burying them alive, according to China's Xinhua state news
agency.
And from Senegal in the west to Kenya in the east, traders are up in arms
about what they see as unfair competition from private Chinese merchants
surfing into Africa on the back of a wave of big investments.
SLOW-SLOW
The backlash has reached parts of Malawi, a nation of 13 million people,
where anti-Chinese protests in the northern town of Karonga in late June
prompted the government to dust off a decades-old law that confines foreign
retailers to big cities.
So far, the government has not forced the issue. Salima's high street is a
tatty strip of tarmac flanked by dusty sidewalks and 200 metres of
shop-houses, including nine owned by Chinese traders. There, the end of July
deadline to move on came and went without a flicker.
Fuxing Trading, Peng Heng Shop and the other Chinese outlets continue to
offer their wares as before, feeding a belief the government will not act
against anything even vaguely connected to Beijing.
Chinese construction firms have just completed a huge hotel and conference
centre in the capital Lilongwe and are busy building schools and upgrading
the main road to Tanzania.
"The government is slow-slow," said Noel Zenengeya, a portly 48-year-old
Salima merchant in a dazzling Hawaiian shirt. "If they don't do anything, we
will have to fight for it."
The authorities acknowledge the bad blood and insist Chinese merchants - an
estimated 140 businesses across the country - will be moved to the three
biggest cities as stipulated by law.
The Chinese embassy says it does not oppose the move. Ambassador Pan Hejun
has appealed to Chinese businesses to move to designated areas "to respect
principles guiding the development of China-Malawi relations."
At the same time, Malawian officials sense they can only go so far before
annoying their giant benefactor.
"It's a very big issue and politically sensitive because the Chinese have
been very helpful to Malawi. It's becoming tricky how we treat their
nationals," Salima District Commissioner Ali Phiri told Reuters. "But we
anticipate a lot of conflict if they don't move."
TRADE IMBALANCE
As trade has soared almost 20-fold in the last decade, the basic nature of
the exchange has not changed: raw African materials - oil, ore, timber -
flow east, while manufactured goods flow west.
Malawi's case is typical.
It sent $46 million of tobacco, coffee, spices and other agricultural goods
to China last year, and in return bought $112 million of textiles, machinery
and high-tech goods.
Even South Africa, far and away the continent's biggest and most
industrialised economy, as well as a major coal and iron ore producer, faces
an imbalance. In Beijing in July, President Jacob Zuma said the trade
relationship was "unsustainable in the long term".
Faced with an official unemployment rate of 25 percent, South Africa's
ruling ANC talks incessantly about the need to boost domestic industry. In
particular it would like to see its minerals processed at home.
But the problem runs deeper: parts of South Africa's manufacturing sector,
nearly 20 percent of the economy, are in direct competition with China, and
in many cases are losing the battle against a much cheaper producer.
According to a recent study by economists at Britain's University of East
Anglia, South Africa lost 78,000 manufacturing jobs to Chinese imports
between 2001 and 2010.
Goods of Chinese origin accounted for about 18 percent of South Africa's
imports of manufactured goods in 2010, up from 2 percent in 1995, the study
said. Labour-intensive industries such as textiles, clothing, footwear and
furniture, have been the hardest hit, with more than 40 percent of footwear
and knitted fabrics purchased in South Africa coming from China. Chinese
imports have also cut into South African exports to other African countries.
"The economy hasn't been able to absorb the labour force, and of course the
manufacturing sector, far from absorbing labour, is expelling labour," said
Rhys Jenkins, one of the authors of the British study.
ONE CIGARETTE AT A TIME
Like consumers around the globe, Africans have an insatiable appetite for
cheap goods, and China supplies them like no other.
Africa has enjoyed average economic growth of 5 percent in the last five
years, and this year contains five of the 10 fastest-growing economies
according to the International Monetary Fund: Sierra Leone, Niger, Angola,
Liberia and Ghana.
But disposable income levels remain very low, defining the way many Africans
buy things. Hawkers selling individual cigarettes are a common sight at
bus-stops throughout the continent; many people can only afford to buy one
at a time. It's a similar story with clothes or shoes: where the cheap
Chinese option beats out locally-produced goods irrespective of the quality.
"In the past, I used to buy from the local market, but now with the prices
in the Chinese shops, I buy from them," said Enifa Mbeleko, a 35-year-old
Malawian mother of six who took a 50 km (31 mile) bus ride to shop for a
blouse. "I've never had a problem with the quality."
SHIFTING TO AFRICA
Africa's growing power as a consumer market has registered 11,000 km away at
the other end of the supply chain, where there's new recognition that the
continent is one of the few bright spots in a gloomy world.
In the eastern Chinese province of Henan, Shao Yali sits in her office at
Kaifeng Tianyi Garments sketching out various commercial strategies on her
computers. The euro zone crisis has hammered exports to Europe, the clothing
factory's biggest market until last year, and she is worried about
generating enough sales to keep the 100-employee operation running.
Africa now accounts for 70 percent of revenue.
"The Africa market is extremely important to us," Shao said. "When orders
for Europe dropped, we had to look for ways to push down prices and ship
items to Africa."
"We are doing all we can to boost orders from South Africa."
She's not the only one. Services firms such as Asia Inspection, which runs
supply chain audits and quality checks on Chinese manufacturers, are also
busy cashing in on strong demand. Chief executive Sebastien Breteau said
European business has declined but a new office in Nigeria, Africa's most
populous nation, will help take up the slack.
"Europe is flat to declining. We see Africa growing big time," Breteau said.
"It's all over Africa, but especially in Nigeria. We believe in the growth
there, and the Chinese are very close to the Nigerian market."
"STEMMING THE TIDE"
Africa's growth means Chinese officials are unlikely to stop their people
heading to the continent to make their fortune.
At the official level, Beijing and its foreign envoys insist that Chinese
nationals and businesses should comply with domestic laws in each African
country.
"If Chinese traders engage in activities that violate your laws, we would
not seek to shield them. We would not protect Chinese citizens' illegal
behavior," said Zhong Jianhua, China's Special Representative on African
Affairs. "We just hope the relevant parties can handle the situation
justly."
But the small private Chinese merchants flocking to Africa from areas such
as Fujian, a traditional source of migrant labour, are not high on Beijing's
list of priorities.
"There's a disconnect between the official Chinese, who are frequently from
Beijing, and the likes of the Fujianese," said Yoon Jung Park, a
China-Africa researcher affiliated to Australia's Monash University.
"Quite frankly they are embarrassed by them, but there's nothing they can do
to stem the tide when the word gets out that there are opportunities and
money to be made."
That means there are likely to be more demonstrations like the one in
Nairobi last month, when 500 Kenyan traders blew whistles and plastic
trumpets, waved placards and chanted "Chinese must go." Many Kenyan traders
resent the thousands of Chinese who arrive on tourist visas and hawk
everything from milk to clothes to electronics.
"The issue is to expel these Chinese from Kenya, the ones that are
disturbing our customers. They are involved with every bit of our trading,"
said James Thamo, a textile trader and hotel owner leading the
demonstration.
In Salima, the Chinese shops are now staffed exclusively by Malawians. The
Chinese bosses turn up only once a week to restock and collect the takings.
"Since last month, the Chinese have been staying in Lilongwe," said Richard
Banda, a 21-year-old sales assistant in Fuxing Trading. "Whenever there are
rumours, they immediately go back to Lilongwe. They are always fearful."
Lilly Lin, a young Fujianese who opened a clothing store in Nkhota Kota two
years ago, said she hopes the Chinese embassy will protect her. Her parents
emigrated to Africa last year to help her in her business. She speaks a
smattering of English, her parents none.
"I'm really not sure where in Malawi we are. I know almost nothing about
this country," she said. "But we've invested so much here. We own a car. We
really don't want to leave."
C Thomson Reuters 2012 All rights reserved
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Received on Tue Sep 18 2012 - 17:55:51 EDT
