The Chinese Thrust into Africa Thread

10 posts

Niccolo and Donkey

We'll use this thread to document China's moves into Africa.

China poised to pour $10bn into Zimbabwe's ailing economy

Niccolo and Donkey
China's economic invasion of Africa

Guardian UK

Xan Rice

February 6, 2011

Chinese civil engineer Liu Hui, who is overseeing the construction of a highway between Nairobi and Thika.

In December 1999, a 24-year-old Chinese man called Zhang Hao left behind the freezing winter of his native Shenyang city to fly to Uganda . Zhang was nervous. He spoke no English. The journey was not even his idea, but that of his father, who had worked in Uganda a few years before on a fishing project involving the Chinese government.

"If you want to start something – and be the boss – Africa is the place to do it," Zhang's father had told him when he asked for business advice.

Zhang had quit university to travel to east Africa, but he did not need a degree to spot easy money-making opportunities as soon as he set foot in Kampala: goods that were available cheaply in every city in China were either expensive here, or unavailable. He started by importing shoes. Then schoolbags. Then fishing nets, nails and bicycles.

"I imported everything. At that time they needed everything!" recalls Zhang, an affable man with rimless glasses.

His business grew quickly; he made money and local friends. But after a few years he grew weary of the long buying trips to China. So he and his wife bought a large plot of land in Kampala. On it they constructed a spectacular Chinese-Korean restaurant, with private dining areas, karaoke rooms and a giant 500-seat dining hall. To the side of the restaurant they built a bedroom, which became their home. The business prospered, and soon he started additional enterprises including a bakery, a firm selling flat-screen televisions and a security company.

"Chinese don't think, they just try without studying the market too much. Otherwise, the chance is gone," he says.

At the site of each new enterprise, Zhang built a room for his family – he had a son in 2007 – to sleep in. They literally live at work.

It has paid off. Zhang says he is now the biggest Chinese employer in the country, with 1,200 local staff. He has even been offered a Ugandan passport, but has refused, just as he has declined to take an English first name.

"I am Chinese, and we need to build a Chinese name here – to let people know that our country is not like before. We are richer, catching up the world."

Few Ugandans need reminding of that. When Zhang arrived in 1999 there were only a few hundred Chinese in the country, including embassy staff. Today, the most conservative estimate is 7,000, from the petty traders who have taken over whole blocks of the central business district to the construction engineers changing Kampala's skyline and the sharp-suited oil executives who frequent Zhang's restaurant. It is a similar story across the continent. Figures are hard to come by, but a decade ago there were probably no more than 100,000 Chinese people working in Africa. Today, there are around a million.

The first Chinese reached Africa nearly 600 years ago during the Ming dynasty, when the armada of admiral Zheng He landed on the Kenyan coast. The next significant arrival was in the early 1900s, when 60,000 Chinese miners worked on the South African goldfields. Half a century on, Chairman Mao Zedong sent tens of thousands of agricultural and construction workers to Africa to enhance ties with countries emerging from colonialism.

But post-cold war migration concerns economics rather than politics. China-Africa trade grew from $6bn in 1999 to more than $90bn (£56bn) in 2009, roughly split equally between imports and exports: Africa's natural resources – oil, iron, platinum, copper, and timber – flowing east to feed China's factories, and finished goods, from flip-flops to trucks, travelling the other way. Last year, the trade is estimated to have topped $100bn. Chinese state involvement in the trade is crucial. Each year Beijing provides billions of pounds in grants and loans to African governments as a sweetener to secure raw material deals or to finance infrastructure projects that could benefit its companies.

That is what brought Liu Hui to Kenya . A slight, 41-year-old civil engineer, he was working for China Wuyi, a state-owned construction firm, in Fujian province in 2006 when he was called into his "leader's" office, and told he was needed on a project to upgrade Nairobi's main airport. Liu had never set foot outside China. He was reluctant to leave his wife and seven-year-old son. He knew as little about Kenya as Zheng He's sailors. "My image was: very poor, dry and hot," says Liu. "But if my company wanted to send me somewhere, what could I have done? You have to show your capacity for work."

On arrival, Liu found that Nairobi was neither dry nor too hot. When the airport contract finished, he was assigned to oversee the construction of a highway between Nairobi and Thika, a pineapple-growing district to the north-east.

Liu lives at China Wuyi's main site office, a four-storey building alongside the highway. Though the commute to work consists of a flight of stairs, the day is long – from 7.15am to 6pm. The pace of work is often frustrating, and can be complicated by language difficulties; Liu speaks in halting English, and knows a few phrases of Swahili. "Chinese work very hard, very quickly," he says. "But here we are training local people to do the work, and if someone does not understand, he works slowly. You have to watch."

Most evenings Liu and his Chinese colleagues – there are about 100 on the road project – watch DVDs on their laptops or chat to family and friends over the internet. But they do get out occasionally, for coffee or dinner in nearby malls. Liu says he intends to return to China for good – his bosses permitting – when the road project finishes, in order to spend more time with his family.

But for Wang Lina, seated in her shop in downtown Nairobi, a few miles away, family is the reason she is here. The child of "normal worker" parents, Wang grew up with few thoughts of leaving Benxi, an industrial town nearly 600 miles north-east of Beijing. But in 2003, when she was 21 and newly married, her husband's uncle approached them with a proposition. A few years before he had travelled to Kenya to set up a home furnishings company. Now his business was expanding fast, and he was looking for family members to help run it. Wang and her husband agreed to join him.

But she missed her friends. In Kenya she could not find any clothes to fit her. She was too shy to talk to local people. So, after a year, she and her husband quit and returned to Benxi. But soon his uncle came calling again, begging them to give it another try.

This time Wang found herself appreciating the upside of living in Nairobi. In Benxi, she had lived in a flat, but was now sharing a large house and garden with two other couples from the extended family. Instead of simply being a cashier in the store, Wang moved into design and sales. She works hard, often seven days a week, but has also found time to enjoy some of east Africa's best tourist attractions – a safari near Mount Kenya, a beach holiday in Zanzibar. She and her husband have saved enough to buy an apartment back home, which is the goal of many young Chinese who take jobs abroad, even though she has no intention of returning soon.

"My friends who now work in Beijing and Shanghai are so tired," she says. "There's no time to relax, it's always faster, faster! Things are slower here, and I like that. No hurry in Africa, that's what they say."

China's move into Africa has not all been driven from the east. Countries such as Uganda have actively courted Chinese companies, to good effect: in 2010 China replaced the UK as the biggest source of foreign direct investment. One of the largest firms to have set up in Uganda is ZTE, China's second-biggest telecommunications equipment company. Zhu Zhenxing, 32, is its MD in Uganda. Growing up in Jiangsu, along China's east coast, Zhu was certain about two things: he wanted to learn English, and wanted to be an international businessman. He was recruited by ZTE at a job fair, with the promise of a job abroad.

"I did not want to stay in my home area, or even in China," he says, puffing on a Dunhill cigarette. "I wanted to experience things, to grow. The further away the better."

So when he was asked to go to Abuja, the capital of Nigeria , Zhu did not hesitate. "Other people said: Africa is like this and like that. But I thought if other humans lived there, I could too."

He learned a lot. The corruption dismayed him. But Zhu liked Nigerians' optimism, "always talking and smiling, not worrying about tomorrow". He was so desperate to prove himself that he nearly burned out. He developed vitiligo, a disorder that causes loss of pigmentation. His face turned white "like Michael Jackson" and he was forced to return to China to recover.

He returned to Africa via Vietnam. In Uganda, he has grown ZTE's business exponentially – the company sold more than 500,000 handsets this year. Zhu looks the modern high-flyer – smart shoes, trousers with a Mont Blanc belt, a dress shirt and trendy black glasses. At weekends he plays golf with clients and Chinese embassy staff. But beyond that his lifestyle is far more modest than that of most expats. He and his staff all live in the same apartment block. A company vehicle takes them to and from work each day. His salary is good by Chinese standards but not comparable with those of his western competitors. Still, he has no complaints.

"We are still working towards being a world-class company," he says. "Our core competency is our low costs, so we must keep expenses down."

If there is one home comfort Chinese migrants in Africa can't do without it is their food. Most companies, including ZTE, bring over their own chefs. Xu Jianwen, 34, is one of them. Raised and trained in Sanhe, in northern China, he was working in a restaurant in Beijing when he heard that the China Road and Bridge Corporation, a state-owned construction giant, was hiring cooks.

When he was offered a job in Uganda, his wife, with whom he has a young daughter, protested vehemently. But he won her over when he told her the salary – two and half times what he was earning in China. "Salaries in China are not enough," he says. "I had to come for the money."

His first job was to cook for 20 Chinese workers in Soroti, a small town in eastern Uganda. He had two local assistants but, lacking English, no way to communicate with them. At least the cooking was uncomplicated. Only five vegetables were available locally – aubergine, cabbage, potatoes, green peppers and tomatoes. "And there was no spicy sauce," he says. "I work every day, because people need to eat every day. I wake up at six in the morning and finish at seven. Every day is like that. I rest on Chinese public holidays."

Currently based at head office in Kampala, Xu plans to spend another two or three years overseas, saving all the while for "housing, education and food" for his family. He won't miss the mosquitoes, he says, but he will miss the people. "They are very nice. Friendly to Chinese."

That is not always the case. In parts of southern Africa there has been strong resentment towards Chinese traders, many of whom arrive on tourist visas and stay on illegally. In Zambia, the Chinese managers of a coal mine recently shot two Zambian employees who were protesting over pay, causing anger across the country. And in Sudan and Ethiopia, rebel groups have killed Chinese workers because they view them as proxies of the local government.

In Kenya, home to up to 15,000 Chinese, the main problem for some of the early migrants was a mistrust of their goods. Xu Hui gave up an editing position at the state news agency Xinhua to start a toy-import business in the mid-90s. But when he moved into computers, people did not trust the quality. He resorted to showing potential clients the labels on the computers they already owned that said: "Made in China".

Today Xu runs a successful business importing Great Wall-brand televisions and giant rolls of toilet paper that are repackaged locally. He regards Kenya as his home – he enjoys the "simple, healthy lifestyle", playing badminton at a sports club every week – and only reluctantly sent his family back to China for educational reasons. But though the attitude to Xu's products may have changed, he is aware that western attitudes to China's push into Africa remain largely negative – something he struggles to understand.

"Western countries also buy oil, and have mines around the world. People don't talk about 'grabbing', or 'new colonialism' there. So why is it different for Chinese? We are not sending our armies to places and saying: 'Now sell us this!'" Xu says. "If you can't compete with us, you find an excuse. It's like two children fighting, and the losing one crying to his parent about funny tricks."

In fact, there is competition now on lots of levels. Every month thousands of African merchants travel to cities such as Guangzhou and Yiwu to buy wholesale goods. And other Chinese firms, including state-owned companies, battle for local tenders.

This can be stressful for company managers. Just ask Dong Junxia, an earnest, smartly dressed woman. Since 2008 she has been in charge of the small Ugandan office of the China Railway Seventh Group Corporation, a subsidiary of CREC, one of the world's largest construction companies. She worked on road-building projects in difficult environments in Tanzania and Liberia, with some success. But in Uganda her company had yet to win a large tender. Dong seemed ashamed, and insisted that her name and that of her company stay out of this story.

"I have progressed professionally [in Africa], but suffered loss in being away from my family. In western culture it's different. Being with the family is the priority. Chinese sacrifice themselves for the family. It is hard to decide which is more important."

But a week later she called to say that her name could be used. She sounded exuberant: her company has been awarded a large contract to build a road. "After two years of hard work! You must understand how good that feels."
Niccolo and Donkey

Looks like India wants to make a play for Africa as well:

India vies with China for influence in Africa

Niccolo and Donkey
China to corner Congo copper

Shades of Mossadegh and 1953:

Lots more in the article. Interesting stuff.
Team Zissou

I read an article in Outside magazine in the grocery store the other day. Environmental conservation is dead in Africa. They're breeding like rabbits, and the Chinese are strip-mining the place.

Yes...Chinese economic colonization will be 100x more environmentally exploitative than old-fashioned Western imperialism ever was. Hypocritical lib-greens will never acknowledge this. And with the environment ruined, there goes any reason to visit Africa in the first place (what, you think it's the culture that drives tourism?).
Niccolo and Donkey

An insightful piece:

America vs China in Africa

Lots more interesting stuff in the article.

These are excellent articles.

It's really hard to overestimate the impact of the neoconservative distortion of U.S. foreign policy. The ramifications of this irrational focus on Israel's security are really far reaching. What's remarkable is how little things change between Democratic and Republican administrations, even when the winning presidential candidate premises his entire bid on such things as "change" and "hope".

Given corruption rampant in many African countries, it's difficult to imagine that China can reliably expect a return on investment other than in improved relations with these countries' leaders. This seems to be an indication of how far China is willing to go to compete with the West for African favor. This increasing competition is good news for Africans.
Niccolo and Donkey
Mike Angocachi

African Union embraces generous Chinese financing

Why has China built a ghost town in Africa? Eerie footage shows brand new Angolan city designed for 500,000 lying empty [video footage]

Check Out The Massive Chinese-Built Ghost Town In The Middle Of Angola