africa in their words: a study of chinese traders

7/31/2019 Africa in Their Words: A Study of Chinese Traders

1/47

Strengthening Africas economic performance

T H E B R E N T H U R S T F O U N D AT I O N

AFRICA IN THEIR WORDS

D sc ss on Pape 2012/03

W t G eg M lls, Sebabatso Manoel , Masana M la dz ,St a t Do an and Emma C en

Te ence McNamee

A Study of Chinese Traders in South Africa,Lesotho, Botswana, Zambia and Angola


2/47

About the Author

Dr Terence McNamee is the Deputy Director of the Brenthurst Founda on.

P bl s ed n Ap l 2012 b :The Brenthurst Founda onE Oppen e me & Son (Pt ) LtdPO Box 61631, Jo annesb g 2000, So t Af caTel +27(0)11 2742096 Fax +27(0)11 2742097www.thebrenthurs ounda on.orgAll rights reserved. The material in this publica on may not be reproduced, stored, ortransmi ed without the prior permission of the publisher. Short extracts may be quoted,provided the source is fully acknowledged.La o t b S eaf P bl s ng, BenonCove p oto : Gallo Images/AFP. The shopkeeper depicted in the photograph was not interviewed for this study.

Contents

Acknowledgements 3

Execu ve Summary 4

Introduc on 8

Methodology and Research Challenges 10

Overall Findings 14Push and Pull Factors 14Fujian 16Shared Values 18Corrup on, Crime and Coping 22

Doing Business 24Beijing: Distant and Disinterested 26Increasing Compe on 27

Key Country Findings 29South Africa 29Botswana 32Lesotho 33

Angola 35 Zambia 36

Conclusions 38Chinese Ways, African Ways 39

Can the good mes last? 40Endnotes 44


3/47

3B R E N T H U R S T D I S C U S S I O N PA P E R 2 0 1 2 / 0 3

AFriCA iN ThEir WOrDS: A STuDy OF ChiNESE TrADErS

AcknowledgementsTis project was conceived in 2010 by the Foundations Director, Greg Mills, ol-lowing a visit to a general store in Kleinmond*, in South A ricas Western CapeProvince. Although the Chinese owner spoke little English, he had clearly built upa success ul business, which served as the main outlet in the area or various goods.Te experience sparked a number o questions: How had he come to this cornero A rica? What had he done better than his local competitors? Had anyone everasked him what he thought o li e and doing business in A rica? It occurred thathis answers might reveal as much about A ricas economic challenges as the untoldstory o the continents Chinese traders.

For various reasons, a number o organisations and individuals who helpedacilitate this research project are not named here, though we are grate ul or

their assistance. Particular thanks go to Nthakong J-C Masithela, ristan Pascall,Moipone Male ane and Lehasa Moloi. Te research support provided by theFoundations current and previous Machel Mandela Interns, Sebabatso Manoeliand Masana Mulaudzi, was un ailingly excellent and both contributed valuableinsights. Vital input was given by Stuart Doran, who undertook and helped devisethe initial pilot study that paved the way or this ve-country survey.

Above all, the success o this project hinged on the skills and intuition o the

translator, Emma Chen. A renowned restaurateur and author, she proved a earlessand spirited companion in each o the 22 interview locations we visited in southern A rica. Tat only a ew individuals re used to participate in this study is testamentto her highly-perceptive, deeply humane approach to the task.

erence McNamee

* Tis store was not included in this study.


4/47



Execu ve SummaryThe China in Africa story brims with ambivalence and ambiguity. Nowhere is this more

evident than on the African street. The in ux of Chinese products and the prolifera on of

small Chinese enterprises are a ec ng ways of life in African towns and ci es, but exactly

how and to what extent is hotly contested. Their presence has sparked outbreaks of xeno -

phobic violence, led to increased compe on with local businesses and prompted calls

for tougher regula on and government interven on. They have become the whipping

boy for Africas poli cians, merchants and labour unions upset by Beijings growing es to

the con nent. However, Chinese traders have also a orded millions of African consumers

the opportunity to purchase a range of goods for the rst me. Whilst debate over their

mpact on Af cas development escalates, t e ave ema ned a la gel nknown new-

comer, scarcely understood and rarely examined.

This study is perhaps the rst to inves gate and compare the percep ons of Chinese

traders in a systema c way, across several African countries. The Brenthurst Founda on

conducted nearly 200 in-depth interviews with Chinese traders in ve countries in

So t e n Af ca So t Af ca, Lesot o, Zamb a, Botswana and Angola between Ap l

2011 and February 2012. This Discussion Paper dis ls the key ndings of the interviews

and, supplemented by addi onal research, considers inter alia w C nese t ade s ave

p oved so s ccessf l n Af ca and w at t e expe ences m g t tell s abo t t e f t e

of ChineseAfrican rela ons.

There is no reliable data on how many Chinese ci zens are in Africa, although some

es mates put the number at over one million. Of those, we know least abo t t e C nese

m g ants w o a e mak ng a l v ng as t ade s n al a eas and ban ma ketplaces ac oss

the length and breadth of the con nent. They have forged their own pathways in Africa

and are seemingly en rely divorced from the policies o en associated with Chinas

African interests. Yet the experiences of traders could weigh heavily on the future of

ChineseAfrican rela ons, more so than even big business or high poli cs.

Ove w elm ngl , Af cans and C nese meet, nte act and explo e eac ot e s wo lds

on the street, at the grassroots level. By restric ng our in-depth interviews to this sphere,numerous ndings and insights not captured in the wider China in Africa narra ve were

exposed. At the most general level, this Paper reveals the complex and mul -layered

nature of the Chinese presence in Africa, so frequently misrepresented as one great

monolith. Although across the ve countries examined in this study there are sharp dif -

ferences in the opinions and percep ons of Chinese traders, it is the striking similari es

that are most telling.

Africa is the bo om-rung des na on for Chinas migrants. The con nent draws the

poorest and least educated of the Chinese diaspora. Nearly all are in Africa because

they could not make a living in the pressure-cooker that has become Chinas job market.


5/47



if t e ad a c o ce, t e wo ld be elsew e e, b t onl Af ca possesses t e m n mal entrequirements and light regula ons that enable Chinese migrants with limited capital and

low levels of skills to compete. S ll, only a ny minority intend to make the con nent

their home. The vast majority of traders long to either return to China or rese le some -

where other than Africa. In one country in our survey, Lesotho, not a single interviewee

de nitely wished to remain in the country. In part this is due to issues such as rampant

corrup on, high crime and low quality of life which gured prominently in responses

throughout our study. More and more, however, traders have become fearful of the ris -

ing de of resentment amongst locals, fuelled by Chinas perceived dominance over many

sectors of their respec ve economies. This was especially pronounced in Lesotho, Angola

and Zambia, and less so but increasingly in Botswana.

T s s ve pa nts a bleak p ct e of t e place of C nese t ade s w t n Af can soc -

e es. Only in South Africa did traders express any sense of belonging or a achment to

the country. Almost without excep on, Chinese traders seal themselves in cocoons, com -

pletely cut o from local communi es. Their experience suggests that, at least for now, it

is pointless to even speculate on the prospects for deeper integra on of Chinese migrants

into African society. In some countries, just hal ng the rise of mutual suspicion and ten -

sion could prove a colossal task.

yet t s st d also s eds l g t on t e val es and m nd-set t at ave enabled C nese

traders to succeed where many others have failed or feared to tread. Their capacity to

endure hardships and sacri ces to earn a living, not least long separa ons from their

families, seems ines mable.

Ev dent t o g o t o nte v ews was also t e ab d ng comm tment to lea n ng a

new profession (only 1 in 5 had experience of trading back in China), o en moving from

the lowliest posi on in a workplace to owning a small business; a marked tolerance for

risk, forging opportuni es where none seemed to exist, where pro t margins were mini -

mal and supply chains weak; an ingrained sense that a person is nothing without a job and

only hard work will prevent someone else from taking it; and a willingness to compete.

in t e v ew of most C nese t ade s, t s m nd-set s not s a ed o nde stood b t eAfricans who purchase their goods and work in their shops. Instead, traders feel besieged

b c a ges t at t e a e s ng ll c t means to ob and c eat Af cans, at e t an s mpl

out-compete them. In some countries, ill-will is clearly growing amongst their custom -

ers over the (poor) quality of some Chinese goods and shopkeepers business prac ces,

namely their refusal to respect consumer rights. As the clamour for ac on against Chinese

traders intensi es, they will be less able to sidestep the conten ous issues which sur -

o nd t e b s nesses, espec all elated to tax, mpo ts and t e fa l e to establ s

links with local rms and supply chains.


6/47



In some Southern African countries more than half of the traders come from just oneprovince, Fujian, home to less than 3 per cent of Chinas total popula on. Networks in

Fujian have been excep onal in crea ng opportuni es that facilitate greater migra on

from China to African countries both legally and illegally yet Fujianese traders have

been t e so ce of cons de able tens on, not least amongst t e w de C nese m g ant

community, who are widely cri cal of their approach to business, if not their character.

Revealingly, traders o en reserved their harshest comments for their puta ve guard -

ians in African countries Chinese diploma c and consular o cials. Ninety- ve per cent

of o s ve cla med t at t e ad neve ece ved ass stance of an k nd f om t e

respec ve Chinese embassies. With rare excep ons, the percep on of Beijing amongst

them was extremely nega ve.

Should tensions con nue to escalate over traders ac vi es in Africas towns and cit -

ies, it will become harder for China to remain indi erent to their plight. Sooner or later,

Beijing will have to de ne its rela onship with Chinese traders in Africa. The large num -

bers of Chinese migrants living in vola le countries across the world, not least in Africa,

could become Chinas Achilles Heel. The fear is that violence against Chinese migrants

abroad could stoke na onalist reac ons at home and threaten the countrys unity. So the

ques on arises from our study, might China be compelled to involve itself in the internal

a airs of unstable or con ict-ridden countries, not least in Africa, to a far greater degree

t an t e to? if so, t en C nese t ade s t e most v lne able of C nas m g ants

could nd themselves on the frontline of their countrys foreign policy rather than the

furthest margins.

T e fo m dable obstacles C nese t ade s ave ove come to ea n a l v ng n Af ca

during the past decade, from insecurity and loneliness to language di cul es and xen -

ophobia, are well documented in this Paper. As for the coming decade, the emergent

challenges to their supremacy on the African street are likely to be even more arduous.

Prominent among them are changing government policies, new market compe tors and

shi ing dynamics within China. Despite the obvious drawbacks, however, life in Africa s ll

makes economic sense for Chinese traders, at least for now. Research suggests that trad -ers in Africa are making about three mes what they might theore cally earn in China.

That essen al di erence is where much of the Chinese trader phenomenon in Africa

starts and stops.

yet t e e s an ac te p eca o sness to t e ex stence n Af ca t at s not gene all

felt by Chinese migrants elsewhere. It may stem, in part, from the anxiety evident across

Africa over whether the con nent can address the manifold challenges that threaten its

econom c g owt , s c as g o t nemplo ment o an nexpected fall n commod t

prices. Doubtless it also relates to the lowly place of Africas Chinese traders in the wider

Chinese diaspora: if they dont make it in Africa, they have nowhere else to go.


7/47

7


B R E N T H U R S T D I S C U S S I O N PA P E R 2 0 1 2 / 0 3

Y ou will nd them in the backstreets and crowded passageways o So Paulomarket in downtown Luanda. Te chaotic bus station precinct o Lesothos

capital, Maseru, is home to many, too; they are instantly recognisable by the young Basotho with pump-action shotguns who man the entrances. In Lusakas Kamwala market they are less conspicuous, in part because the traders spend as little timeinside them as possible; new legislation has orced them into a hide-and-seek game with Zambian immigration o cials. Botswanas second city, Francistown, boastsabout 70 o them in a city o less than 100 000. And it is rare or even the smallest

arming towns o South A ricas North West Province not to have at least one.Te Chinese shop1 is the opaque underbelly o Chinas presence in A rica.Chinese traders might number in the hundreds o thousands across the con-

tinent. Teir presence in rural towns and urban centres has sparked outbreakso xenophobic violence, led to increased competition with local businesses andprompted calls or tougher regulation and government intervention. Yet they are a largely unknown newcomer, scarcely understood and rarely examined.

Te experience o small-scale Chinese traders during the past 20 years revealsa wealth o detail and insight that is not captured in the wider China in A ricastory that has become so prominent in discussions about the continent. In someSouthern A rican countries more than hal o the traders come rom just one prov-

ince, Fujian, located on the south east coast o China and home to less than 3 percent o Chinas total population. With rare exceptions, Chinese small business own-ers have never had contact with the Chinese embassy or o cials in the country they operate in; indeed, the near unanimous perception o Beijing amongst them isnegative. Most traders are in A rica because there are shrinking opportunities andtoo much competition in China, yet only a minority wish to make the continenttheir home; the overwhelming majority long to either return to China or resettlesomewhere other than A rica.

Te desire to better understand how Chinese migrants perceive and experi-

ence A rica was one o the main impetuses behind a major interview-based study by the Brenthurst Foundation. Te Foundation conducted nearly 200 interviews with Chinese traders in ve countries in Southern A rica South A rica, Lesotho,Zambia, Botswana and Angola between April 2011 and February 2012. TisDiscussion Paper distils the key ndings o the interviews and, supplemented by additional research, considers why Chinese traders have proved so success ul on the A rican street and what their experience might tell us about wider ChineseA ricanrelations.

A ter a brie introduction to the current China in A rica story, the Paper out-lines the methodology o the study and highlights several key issues and challenges

T e C nese s op

is the opaque

nde bell of

C nas p esence

n Af ca


8/47

8



The percep on of

Af ca as not onl a

bo ndless font of

nat al eso ces

b t a business

opportunity

a nea b ll on-

pe son ma ket fo

low-cost C nese

man fact ed

goods

encountered in the course o this research. Examined next are the key ndings o the study, both overall and speci c to each country. Te Paper ends with some nalobservations on the uture Chinese presence in A rica.

Introduc onTe explosive growth o Chinas engagement with A rica in recent years has gener-ated signi cant debate amongst policymakers, scholars and business leaders on a number o levels. wo o the most o t-heard questions are: what are the key driverso Chinese investment in A rica and how is China a ecting A ricas development?2

On the rst, less contentious question there is a wide consensus that Chinasmacroeconomic priorities are the main spurs to its ever-deepening involvementin A rica, namely its need to access A ricas natural resources to ensure the con-tinuation o its industrialisation and economic development.3 Over the past twodecades, Chinas annual economic growth has averaged 9 per cent. o help powerits booming economy, China receives an estimated one third o its oil imports

rom A rica, although the continent possesses only about a tenth o the worlds oil.4 Trough various loans and in rastructure or extraction rights agreements, China also has tapped the continents wealth o minerals: A rica holds 95 per cent o the

worlds reserves o platinum group metals, 90 per cent o its chromite ore reserves,and 85 per cent o its phosphate rock reserves, as well as more than hal o its cobaltand one-third o its bauxite.5

rade between ChinaA rica reached a staggering $115 billion in 2010, in sharpcontrast to the mere $12.14 million in 1950. Te trade has increased at an annualrate o 43.5 per cent.6 In 2011, bi-lateral trade soared to $160 billion according to gures published by Beijing, making China A ricas biggest trade partner.7 Tistrade is relatively balanced, with Chinas exports to A rica about $10 billion lessthan imports.

Te perception o A rica as not only a boundless ont o natural resources buta business opportunity a near billion-person market or low-cost Chinese manu-actured goods strengthened with Beijings decision to initiate the going out

(zou chuqu,in Mandarin) strategy in 1999. Te aim was to help Chinese rmsexplore investment opportunities abroad and, with government support, open upnew markets by establishing either joint ventures or wholly Chinese-owned sub-sidiaries in various countries. At the time, Beijings business-oriented approach tothe continent contrasted sharply with the dominant portrayal o A rica in the Westas a largely humanitarian or security issue. In recent years that reputation has begun


9/47

9



to whittle away, although the West has struggled to play catch-up with China intrade and investment.

What Chinas deepening engagement means or A ricas development is hotly contested. For its part, Beijing argues that its A rica policy is predicated on theprinciple o mutual bene t and common development, to develop and exploitrationally [A ricas] resources, with a view to helping A rican countries translatetheir advantages in resources to competitive strength, and realise sustainable devel-opment.8 In accordance with its requent boasts o state-sponsored economiccooperation, Chinas Ministry o Commerce has agreed to help establish severaleconomic and trade cooperation zones on the continent in order to help A ricancountries develop industries and expand local employment.9

Critics charge that the proposed special economic zones are in act politicalinvestments, which are neo-colonial in nature and directly linked to Chinas geo-strategic goals. Tese ambitions are, controversially,not constrained by concernsover A rican countries governance records. In various international ora and media,Beijings policy o non-inter erence in countries internal a airs and its seemingly conditionality- ree aid provokes sharp condemnation, especially vis--vis repres-sive states such as Sudan and Zimbabwe. More recently, China has also attractedthe ire o international human rights groups or alleged abuses o A rican labourers,

notably in its mining operations.10Su ce to say, the China in A rica story brims with ambivalence and ambigu-

ity. Nowhere is this more evident than on the A rican street. Te infux o Chineseproducts and the proli eration o small Chinese enterprises are a ecting local busi-nesses and ways o li e in A rican towns and cities, but exactly how and to whatextent is not yet clear.11 At the most general level, cursory observations suggest thatthe number o Chinese shops and small businesses has grown substantially in recentyears, in some countries very rapidly; the Chinese have displaced some local traders,though how many is di cult to determine; their presence has provoked a back-

lash in many A rican communities, but the severity and possible explanations orlocal reactions is highly variable; and the massive infow o low-cost Chinese goods unwanted or surplus products dumped on the A rican market, say critics hashurt local manu acturing but also proved a huge boon to poor A rican consumers.

In the nascent research on the impact o Chinese private enterprises in A rica 12,this study is perhaps the rst to examine and compare the perceptions o Chinesetraders in a systematic way, across several A rican countries. Given the mani oldchallenges encountered in the eld work or this Paper, this lacuna is hardly sur-prising. Yet the research e ort pays a rich dividend. While the interviews rein orcesome commonly-held belie s, they also yield resh insights and expose some old

t e C na n

Af ca sto b ms

w t amb valence

and ambiguity.

Now e e s t s

mo e ev dent

t an on t e

Af can st eet


10/47


11/47

11



T e ave fo ged

t e own pat wa s

n Af ca and

a e seem ngl

en rely divorced

f om C nas

Af ca pol c es

local o cials or business persons, researchers or representatives o their respectiveChinese missions. Nor had they ever been requested to share details o their opera-tions, other than by local police or immigration o cials, which more o ten thannot was merely a pretext to extract a bribe.

Although this may refect a general disinterest in their views and perspectives,perhaps the most likely reason or the lack o inquiries into traders views is thesheer complexity o this kind o research. Firstly, there is no reliable data on how many traders are based in a particular area or where they are located. Tey have

orged their own pathways in A rica and are seemingly entirely divorced romChinas A rica policies; i any are aware o Chinas going out strategy, they certainly havent availed themselves o the government support it apparently entails. None o the governments or business associations (either nationally, regionally or locally) inthe ve countries covered in this study have captured statistics on the number andlocation o Chinese traders, or i they have they are not making the data publically available. What is more, o cials in at least three o the countries originally slated

or this study actively discouraged us rom undertaking the research.13 One canonly speculate on the exact reasons or their stance, although one possible expla-nation is that they believed the project might antagonise Chinese o cials insidetheir country and thus negatively impact their diplomatic or economic relations. I

even partly true, their opposition refects a common misperception o the (discon-nected) relationship between traders and Beijing.

Te task, then, o identi ying the location o individual or clusters o Chineseshops involved various communications with locals on the ground. In cities,generally they were to be ound in poorer, densely populated areas. In some cen-tres notably Johannesburg, Gaborone and Francistown locating them wasstraight orward, owing to the well-established concentrations o Chinese shops inparticular areas. In other areas where Chinese traders have only recently establishedthemselves, such as parts o greater Luanda, it took considerably longer to pinpoint

their location. In the smaller centres that boasted only one or a ew shops, typi-cally it would take two or three conversations on the street be ore a help ul local would point the way to the store. Te Zambian capital, Lusaka, proved the mostchallenging to conduct interviews because traders avoided spending more than a

ew minutes at a time in their shops. Unlike in other centres in our study, LusakasChinese traders usually le t the running o their shops to locals. Most o the traderspossessed only work permits rather than sel -employment permits14, which new requirements apparently stipulated were necessary to run a business ergomost o the traders were technically illegal and thus subject to regular checks and/or harass-ment by immigration and revenue o cials. Consequently, many o the interviews


12/47

12



Ini ally most

t ade s we e

nstantl s sp c o s

of an one ask ng

t em abo t

t e b s ness

o backg o nd

were conducted in the principal nighttime gathering place or Chinese workers andbusiness persons the citys main casino. Elsewhere in Zambia, some interviews were hastily undertaken at a Chinese restaurant.

All o the interviews in this study were conducted by the projects Chinesetranslator. Tis was necessary or two or three key reasons. Te majority o thetraders interviewed spoke either no English or only the minimum necessary to runtheir business in an English-speaking environment (or Portuguese in a Lusophoneenvironment), although in major centres like Johannesburg and Cape own somelong-established traders spoke excellent English. Initially most traders were, moreo-ver, instantly suspicious o anyone asking them about their business or background.It required an extremely de t introduction by the translator to allay their concernsand explain the nature o the project. Above all, this meant convincing them thatthe Chinese government wasnot involved in this study (in which case most wouldnot have participated) and that it was an opportunity or their voices to be heard.Tis emphasis proved vital in acilitating the interviews and winning their trust.

During the rst interviews conducted or this project, the translator carried with her an o cial letter (translated into Chinese) rom a government departmentin the country concerned, which stated its support or the project and asked or theinterviewees cooperation in the survey. Tis elicited a measure o anxiety amongst

some o the traders, who eared that their responses might be used against themby the government so no such letter was used during the remainder o the study.

All the interviews undertaken were anonymous and generally lasted approx-imately 30 minutes, although on occasion some traders ended up speaking oras long as 90 minutes. None were pre-arranged; even the casino and restaurantinterviews were set-up there and then. Te interview questionnaire comprised19 questions, which included basic queries about personal in ormation age,Chinese province o origin, number o years in A rica and their businesses, suchas the number o Chinese and local employees, the origin o their products and

rom whom they rented or leased their shop. Te more substantive questions asked why they came to A rica; what the main challenges were to their business activities; whether they had experienced crime or corruption; what types o interactions they had had with local o cials and their Chinese embassy; and what their views wereon li e and opportunities in A rica. Teir answers refect their own experiences andperceptions.

Given the complexity and ad-hoc nature o the interview process, the crite-ria or the interview sample required some fexibility. Nearly all the subjects were traders involved in either general shops, selling a vast array o personal orhousehold items; grocery and convenience stores; or textile and clothing shops.


13/47

13



186 n-dept

nte v ews we e

cond cted fo

t s st d

Nevertheless, when the opportunity presented itsel , interviews were conducted with other types o small scale Chinese businesses, such as tile stores, scrapyards, a glass actory and a small cement plant. Teir businesses usually employed less thanten locals although a minority o the sample employed more. O ten the interviewee was the principal trader running the business but a signi cant minority were theChinese sta , many o whom were related to the business owner. Roughly 30 percent o the interviewees were women.

In total, 186 in-depth interviews were conducted or this study. As a southern A rica-based oundation, a decision was made to restrict our initial investigationto select countries in the region. Te original aim was to conduct a roughly equalnumber in each o our survey countries, but in the end the nal tally o interviews

or each country refects, to some extent, how di cult accessing and identi ying the trading locations proved. Consequently, as per the interview map, proportion-ately ewer interviews were undertaken in Zambia and Angola given the reportednumber o Chinese working in those countries although as mentioned above,such gures are highly speculative. o ensure we captured any sharp discrepancy between the views o traders operating in the countrys major city and those basedin other centres or rural areas, we achieved a geographic spread o interviews acrossthe ve states. Needless to say, during the course o the eld work we learned o

countless individual or clusters o Chinese shops in parts o our survey countriesthat we did not visit.

Te in ormation represented in the tables and graphs below is drawn exclusively rom the in-depth interviews. Due to the lack o any reliable data on Chinese trader

communities, this type o qualitative sample is the only means to analyse theiropinions and attitudes systematically. In each country represented in this study, thenumber o interviews was su cient to ensure that most or all o the perceptionsthat might be important were exposed. o some extent we were constrained by timeand the other limitations noted above, but generally the concept o saturation was

ollowed across all ve countries i.e. when the collection o urther data did notalter the patterns identi ed or reveal new themes related to the core issues underexamination. Although important in erences can be drawn rom the gures in theillustrations, like all qualitative research this study is less about numbers than therichness o the in ormation and insight gained rom candid, structured conversa-tions with the people who are the ocus o our research.


14/47

14



most we e

o g nall d awn

to the con nent

b t e p ospect

of compara vely

be er income andopportuni es

Overall Findings

Push and Pull FactorsFor all the various push and pull actors underlying the dramatic rise o the Chinesetrader throughout the continent, the act that it is easier or themto make money in A rica than China is the catalytic essence o virtually all their individual stories.Nearly 90 per cent o our interviewees cited it as the main reason or doing businessin A rica. O the remainder who wished to return immediately to China becauseit was no longer attractive doing business in A rica, most were originally drawn tothe continent by the prospect o comparatively better income and opportunities.

Te reasons why so many traders struggled to nd viable livelihood options inChina varied depending on their pro ession (whether a trader or another), the eco-nomic situation in their home province or region, and personal circumstances.

Following Chinas admission into the World rade Organisation in 2001, Beijing accelerated the restructuring o its economy, which involved a new emphasis oncompetitiveness and the employment o skilled workers by the private sector. Fromthe pool o low-skilled labourers who were retrenched in the subsequent downsiz-ing by major companies, a signi cant number made their way to A rica in searcho better economic prospects. Tis was especially true o the coastal provinces, such

Figure 2: What is the main reason Chinese traders are doing business inAfrica?


15/47

15



W e e ot e

fo e gne s wo ld

cons de t e Af can

market insu ciently

pro table, the

C nese co ld

s cceed n an

env onment

where pro t

ma g ns we e low

as Zhejiang and Fujian, which experienced major adjustments in the manu actur-ing sector.15 In addition, the states support o large in rastructure and constructiondevelopments in China o ten displaced Chinese citizens. Some o these internally displaced people (IDPs) made their way to A rica as they were already migrants intheir own country.16

ime and again in our study, traders despaired at the lack o opportunities andintense competition or jobs in China. Among the more educated o our sample,several noted thateven i you nish university, you cant nd a job in China.O those who were traders or small business owners in China, none could compete any longer in a saturated market increasingly dominated by larger businesses. However,only a minority o interviewees 21 per cent had been traders by pro ession inChina. No pro ession was dominant in our sample, but it includedinter alia actory or construction workers, armers, students, mechanics, housewives, teachers andservice industry employees. Aside rom their employment woes, many migrants were also infuenced by complicated personal or amily situations.

What pulled the new traders to A rica were not, as noted above, state-led ini-tiatives such as the provision o trade zones on the continent, or the SmallMediumEnterprises International Market Development Fund (which ostensibly is gearedto helping SMEs explore overseas markets, though ew large private rms seem

to know about it), although Beijings loosening o its once-prohibitive emigrationpolicies beginning in the 1990s did enable millions to leave China or the rst time.Instead, it was the ineluctable lure o an immense market or low-cost Chinesegoods. Unlike markets in Europe or North America, in A rica there were ew constraining regulations and minimal entry requirements, so entrepreneurs withlimited capital and low levels o skills and education could compete. Whats more, A rica represented a virgin market or household goods, apparel and other itemsthat China could produce at very low cost. Where other oreigners would considerthe A rican market insu ciently pro table, the Chinese or various reasons dis-

cussed below could stick it out in an environment where pro t margins were low.In nearly all cases in our sample, the journey rom low-skilled or unemployed worker in China to sel -employed trader and small business owner in A rica wasmade possible via strong amily, village or provincial networks. More o ten thannot, in the case o traders, migration is acilitated through these relationships,sometimes with the help o illegal or semi-legal unlicensed employment agenciesor even human smugglers known as snakeheads. Sometimes it is just one amily member who serves as the pioneer, establishing him/hersel as an in ormal traderin one location be ore moving upward to become a business owner or wholesaler,in the process drawing other members o his extended amily or hometown to the


16/47

16



same location, a phenomenon known as chain migration. (From one pioneer inthe Chen amily, there are today 172 members o the same amily scattered acrossLesotho doing various types o trading.17) Eventually a support network develops, which may provide basic accommodation and employment guarantees or new entrants. ypically they start o as hawkers or shop workers but they, too, aspire tobecome sel -employed in the same kinds o businesses, and o ten do. Stories o therelative ease o upward social mobility in A rica resonate power ully among belea-guered communities back in China.

in no p ov nce

ave t e t ade

netwo ks p oved as

g l developed

or proli c as FujianFigure 3: Places of origin of Chinese traders in southern Africa

FujianIn no province have the trader networks proved as highly developed or proli c asFujian (or FJ). Nearly hal o the traders in South A rica interviewed or this study were rom Fujian, slightly more than hal in Botswana and almost three-quartersin Lesotho. It is impossible to consider the Chinese trader phenomenon in A rica

without some discussion o FJ, the character o the Fujianese people and the o tennegative perceptions o them held by other Chinese.Located on the coast across rom aiwan and home to about 35 million peo-

ple (roughly 2.7 per cent o Chinas total population), FJ is by some estimatesthe largest source o overseas Chinese, some one- ourth o the entire diaspora, liv-ing in more than 90 countries. Te greatest concentrations are in Southeast Asia,although a signi cant number have recently established themselves in A rica.18

Prior to 1990 emigration rom FJ was the preserve o the better educated, maleurban dwellers. But as the barriers to leaving China lessened, the rural and working


17/47

17



class Fujianese began to orm the bulk o the exodus to various parts o the world,driven partly by diminishing opportunities at home. Aside rom the loss o jobs inthe manu acturing sector, agrarian re orms in China created a vast surplus o work-ers no longer needed in the agriculture industry; and the commercialisation o the

shing industry, coupled with the sharp rise in diesel prices, made it unpro tableor many o the provinces shermen.19

FJ networks have been exceptional in creating opportunities that acilitategreater migration rom China to A rican countries both legally and illegally. Inpart, communities in FJ encourage emigration or economic reasons. Whether themoney is borrowed or traveling abroad or or start-up capital, the economic debthas both economic and social dividends. A saying in Fujian Province captures thissentiment, the more people go abroad, the easier to borrow money .20 Some o theeconomic dividends include the high rates o remittances that FJ receives. Many believe this fow o money is responsible or FJs new ound economic vitality andthe major in rastructure developments undertaken in recent years. (Tere is a wide-

spread perception that Beijing has not invested in the province due to its proximity to aiwan, which theoretically makes FJ a potential battleground should the islandand the mainland ever go to war.) Te remittances serve as a means o establishing and deepening the migration networks, and rea rming the incentives or those inthe place o origin to migrate overseas.

Gracia Lui-Farrer, whose work ocuses on undocumented Fujianese in Japan,explains Fujian migration as debt-driven migration, and network support oremigrants who overstay their visas.21 She explains migrations through the reci-procity-oriented culture that in orms the Fujian ethical ramework. In the caseo A rica, the responses o FJ traders suggest that concerns over status and other

t e esponses of

FJ t ade s s ggest

t at conce ns

ove stat s and

ot e soc etal

p ess es we e

just as important

as econom c

p ess es c del

p t, o we e not

a man nless o

went ove seas

Figure 4: Percentage of Chinese traders from Fujian Province in eachcountry


18/47

18



societal pressures were just as important as economic pressures crudely put, you were not a man unless you went overseas . Te social meaning o moving abroad inFujian communities has changed rom being seen as the privileged exploits o the

ew to a search or status and a means o survival or the many. What in particular about the Fujianese character might enable them to gain

a strong oothold in such challenging environments as A rica requires urtherresearch, although their conduct suggests, at the very least, a highly competitive andterritorial nature, which can be glimpsed in their habit o including Fu, denoting the rst character o Fujian, on their shop signs. Fujian is comprised predominantly o Han Chinese although it is also home to numerous dialects and nearly 50 ethnicgroups who live in very compact, tight-knit communities, which may go some way to explaining the power and resilience o their support networks abroad.

Te Fujianese character was much commented upon by non-Fujianese trad-ers interviewed in our study and o ten negatively. FJ traders have a reputation

or hard work but also ruthlessness and, in some cases, criminality. Our samplesuggested that their response to the arrival o other Chinese in their territories isgenerally hostile, and sometimes violent. According to one Francistown trader rom Jiangsu,the FJ people here are not educated, and they like to ght some o them eventry to get protection ees rom me, saying they will be responsible or the security o my

shop. Yet intra-Fujianese rivalry is also erce, with extended amily or town-basednetworks competing against one another. As one Lesotho trader bemoaned,whenthe Fujianese are angry they use a stick to beat each other [so the police think] the Chinese are prone to violence and are uncivilised.

Intra-network solidarity and cohesiveness may be particularly strong amongstthe Fujianese, although across the numerous Chinese trader communities whetherdrawn rom Jiangsu, Zhejiang, Guangdong or other major migrant-producing provinces all can be said to associate almost exclusively with their own, usually along common dialects.When there is only one Chinese person, it is a Chinese dragon,

remarked one trader rom Jiangsu, [but]when there are many Chinese people, they are worms a amous idiom that suggested that the Chinese as a whole dont work well as a team. It also true that common among all traders is a pronounced survivalmentality: the job is everything . Indeed, rom the interviews in all ve countriesnumerous other qualities reveal themselves time and again, so much so that they

orm what could broadly be described as a shared value system among traders.

Shared Values Any discussion o values is highly subjective given the disparate and complexnature o any societal grouping, let alone the multidialectic, regionally diverse

common among

all t ade s s a

p ono nced

s v val mental t :

the job is everything


19/47

19



community that are Chinese traders. None the less, the interviews reveal a numbero distinct similarities along three lines: personal aspirations; attitudes to li e and work; and perceptions o A rica and A ricans.

Speculating on the motives or the recent waves o Chinese migration toZambia, Solange Guo Chateland suggests that they can be understood as a means

to secure a amily lineage (real or imagined): in other words, how best to ensurethe longevity o the amily line, either as the prolongation or the segmenta-tion rom ones older generation (lao yi bei ). Settling in Zambia is neither theobjective nor the nal destination or many o these people. Teir stint in A rica

which may last several generations is just one part o the long, arduous andunpredictable journey o a amily li eline.22

In our study, traders were invariably driven to make money in order to either (in thecase o males) support a wi e, or a childs education back home; or in the case o single traders, to make enough money to return to China and purchase a fat, with-out which they would be unable to nd a wi e and start a amily. In general, theChinese, as was o ten remarked, areslaves or their children. A number o tradersspoke variously on the same theme:we do everything or the next generation.

On the whole, our sample suggested that a strong majority o traders de nitely intended to return home, and in two cases the gures were 87 and 95 per centrespectively; in no country did more than 20 per cent o traders indicate that they de nitely planned to stay in A rica. Tat said, it was the aim o many Chinese intheir late 40s and 50s to establish a backdoor in another, non-A rican country in

A n mbe of

t ade s spoke

va o sl on t e

same t eme: we do

everything for the

next genera on

Figure 5: How many Chinese traders plan to return to China?


20/47

20



C nese t ade s

ave been known to

sleep fo o s x to

a oom n ext emel

mble dwell ngs,

o l ve n t e

s ops to c t costs

case something un oreseen happens in China. Tey are the generation that experi-enced the Cultural Revolution and thus were, perhaps unsurprisingly, less sanguineabout Chinas uture than younger Chinese traders.

Lost in the avalanche o stories and commentary on the Chinese invasionis that A rica is the bottom-rung destination or Chinas migrants. In act, it isthe continent least settled by overseas Chinese.23 A rica draws the migrants whoare generally the poorest and least educated. Zambias Vice President, Guy Scott,recently quipped that

One gets the impression that the Chinese are a jolly smart people, who will be

sending a man to the moon, but those are not the guys weve got. Tey are a lotmore rough and ready. Tey are people who have di culty getting work back inChina.24

He might have added that nearly all traders would, i they had a choice, be somewhereother than A rica. O the traders who were parents, only a tiny raction hadtheir children with them; most said they would never bring their children to A rica on account o the poor education and, secondly, medical care. In our study only oneinterviewee had come to A rica rom a more advanced country (Greece, perhaps

tellingly). Yet as noted above, the market entry requirements and so on elsewhereare too prohibitive or most, i not all, o the subjects in our study.

How A ricas Chinese traders succeed in an environment where most oreignersear to tread is not, o course, solely due to their willingness to accept low pro t

margins. Teir capacity to endure hardship and tolerate conditions that woulddeter even the most intrepid Western entrepreneur is nothing short o legendary.Chinese traders have been known to sleep our or six to a room in extremely hum-ble dwellings, or live in their shops to cut costs. Teir hours will vary depending on the business, but generally the ethos is to work all day, 365 days a year.For the

most part they have little or no social lives and mingle only among their co-migrantgroups. Teir one non-negotiable is ood: invariably even the smallest trader com-munities have at least one Chinese cook in their midst, even i sourcing ood andcooking supplies sometimes proves di cult.

Te Director General or Chinas Department or A rican A airs, Lu Shaye,explained recently why large Chinese corporations were so competitive, yet hisobservation also speaks to the mindset and priorities conveyed by numerous trad-ers in our interviews: China spends on average 95 per cent o the money on theproject and on the recipient countries, while the West may spend 80 per cent ontheir own sta .25


21/47

21



C nese t ade s

are a signi cant

emplo e of

locals in ci es

and small towns

His remark goes to the heart o one o the Chinese traders principal grievances:they believe they are widely misperceived by local populations.Everybody sees the Chinese making money and they are getting upset about it but they dont see how hard we work, 365 days a year,said one Gaborone trader. I believe we provide more work opportunities,a clothing trader in South A ricas Western Cape asserted,we alsochange their lives. When I rst came here, black and coloured people didnt dress nicely and cheap Chinese products solved their issues they now need to spend less money onclothing so they can spend their money on other things. Among locals the view o theChinese in Lesotho, lamented a trader rom FJ,is that we are here to rob them.

Chinese traders are a signi cant employer o locals in cities and small towns,ranging in our study rom an average o 8 in Lesotho and Angola to a low o 2 in South A rica. Indeed, our survey puts another dent in the myth, which hasproved stubbornly persistent in many A rican communities, that Chinese rmsonly employ ellow Chinese workers. raders employed on average more localsthan Chinese in each o our countries. Tere is little evidence, however, that suchemployment has helped to narrow the cultural divide or the values gap betweenChinese and A ricans. For instance, what the Chinese see as a virtue rugality islargely perceived by their sta and employees as stinginess, or o ten worse. Socialmingling between Chinese and A ricans is exceptionally rare and marriage all but

inconceivable. Chinese women, who comprised a signi cant minority o our sam-ple, generally are dismissive o A rican men. erms used to describe them includedsexist, lazy, and disregard ul o their children. In contrast, Chinese men, in theirview, had no hang ups about doing work which some A rican men would considerbeneath them.

In terms o their respective approaches to work, one trader rom Sichuan spokeor many when he remarked that A ricans are never in a hurry, they dont save, the

day a ter pay day nobody comes to work. No planning.Paradoxically, the act that A ricans, in many traders views, binge spend, i.e. spend everything they have, is

good or their businesses. In general, our sample was highly critical o their A ricanemployees work ethic. Tey also routinely described them (and their customers)as untrustworthy. Tis was especially pronounced in Zambia, where many traders

eared the consequences o leaving their shops to local sta . As ever, such perceptions are intimately linked to the environments in which

they are born, in this case typically the most deprived and least advantaged partso A rican communities, which o ten exist only just above the survival threshold.By and large, it is these communities which play host to and support trader activ-ity. And there were also important exceptions that could be observed across all

ve countries in this study, where e orts to build-up relationships between traders


22/47

22



Talk of corrup on

nvolv ng C nese

t ade s s almost

alwa s l nked

w t lang age

and their A rican employees were plainly evident. Generally, however, the tradersbelieve that their ways are pro oundly at odds with local values and attitudes.

Corrup on, Crime and CopingOne o the widely-assumed advantages Chinese traders have over other potentialcompetitors on the A rican street is that they are more adept at handling corrup-tion. Tey have no expectation that A rica will be corruption- ree; indeed many cited corruption experienced in China as a good training ground or A rica. Yetin most o the countries examined here, the Chinese trader community has beenoverwhelmed by the scale o police and/or o cial corruption. Across our sample64 per cent said corruption was a serious problem, although that number wouldbe considerably higher i the interviews in Botswana and the Cape own area wereexcluded. In both Zambia and Angola the gure topped 90 per cent, whilst inLesotho it was nearly 80 per cent.

Te nature and severity o the corruption varied considerably, rom relatively mildharassment by local police seeking small bribes or ood to major, systemic abusesby customs or immigration o cials who solicited large nes or real or concocted

transgressions. ellingly, numerous traders blamed their ellow Chinese migrantsor encouraging corruption. In the words o a general store trader in Lusaka,partly its the ault o the Chinese, we like to use money to get rid o trouble.In Luanda, a trader rom Guangxi was even more to the point: the Chinese culture o solving problems by money makes them[police and immigration o cials] believe that we have money.

alk o corruption involving Chinese traders is almost always linked with lan-guage: due to the poor English (or Portuguese, in the case o Angola) o mosttraders, they are apt to readily pay bribes because they have little means o eitherexpressing their grievances or interrogating the reasons or a demand or payment.

Figure 6: Is police and/or o cial corrup on a serious problem?


23/47

23



lang age p oved

a signi cant

obstacle fo C nese

t ade s, espec all

w en t e fell

vic m to crime

At the same time, it seems clear that their poor English is routinely exploited by corrupt police or o cials who, as consequence, believe they can act with impunity. A Chinese idiom heard more than once during our interviews was,i you give some-thing very bitter to a mute person, they cannot express their sufering , meaning thatsome traders can only be quiet because they cant express themselves as they would wish.

About hal o all traders in our study cited language as a major problem experi-enced in the course o their business activities. In Lesotho, the Chinese interviewedin many o the smaller centres spoke passable Sesotho (which they would simply re er to as the local language), a urther illustration o their adaptability to di er-ent environments. More o ten, however, language proved a signi cant obstacle orChinese traders, especially when they ell victim to crime. Other than Botswana,crime and insecurity was a major concern. A Lesotho trader summed up a widersense o helplessness in the ace o the polices apparent ailure to protect them orinvestigate crimes against them:Our language is not good and we dont know the law.Te blacks will always protect their own.

Variations in crime perceptions amongst Chinese traders are elaborated upon in thecountry sections below, but generally their limited English compounds a broaderimpression that they have no status in the societies in which they operate and thus,in e ect, no human rights. As most traders eel they are being singled out or rob-beries, they rarely venture out in the evenings. Even during the daytime, however,traders are o ten targeted because it is assumed they walk around with lots o cash.Several interviewees spoke o Chinese traders having experienced random violent

Figure 7: Percentage of traders who said corrup on was a serious problem


24/47

24



attacks, which they believed stemmed rom anti-Chinese sentiments (xenophobia).Each incident ampli es perceptions o crime amongst the tight-knit Chinese com-munities and networks. In several interview locations, we heard the same expression

rom traders:we live like we are holding our hearts in our hands . In most places in A rica, in other words, they live in continual ear.

Doing Business At least some o the anger directed towards Chinese traders in A rica comes romlocal traders, some o whom have been pushed out o the market because they canno longer compete against low-cost Chinese goods. In some centres, ill-will alsoappears to be growing amongst customers over the (poor) quality o some Chinesegoods and shopkeepers business practices, namely their (lack o a) return policy.

From the Chinese perspective, such resentment is born o misunderstanding and ignorance. As one Francistown merchant rom Fujian explained,the Chinese have lower pro t and price margins, with little a ter-sale service, that is why the Chinese have a bad name as opposed to locals and Indians who have higher pro t and lower sale, and much a ter-sales repair. According to a trader in Stellenbosch,locals believe that Chinese goods are rubbish, but we sell our goods so cheap and its because they cannever be returned. I can never return my goods to my wholesalers.

Several interviewees noted that initially they were embraced by locals, whorelished the opportunity to purchase a ordable clothing, electronic products andother items or the rst time. But more recently a perception has crystallised thatChinese products are in erior and no longer to be trusted. Te derogatory termFong Kong, which implies that Chinese goods are cheap imitations, entered thelocal lexicon in South A rica in the 1990s26 but elsewhere it is a more recent phe-nomenon. Te locals used to be riendly , said one clothing merchant in Botswana,now they call me china, china and I resent it.One trader in Kitwe remarked thatbecause they sell goods so cheap, the locals resent them the year be ore the shop was

attacked because our prices are a threat to the local market.Te bitterness o some Chinese is heightened by the act that Chinese wholesal-ers are requently key to local retailers activity, as they serve as an important link in supply chains: A rican traders purchase low-cost Chinese goods and then sellthem on elsewhere. Moreover, increasing numbers o A rican traders travel to partso China such as Guangzhou and Shenzhen to acquire Chinese products. Noneo them, certainly, could claim the Chinese have un air advantages on the A ricanstreet.

In Johannesburgs bustling CBD you will nd street vendors rom Zimbabweor Zambia selling pairs o Chinese-made socks or 5 Rand (60 US cents) each.

Seve al

nte v ewees noted

that ini ally they

we e emb aced b

locals, w o el s ed

t e oppo t n t to

purchase a ordable

clot ng, elect on c

p od cts and

ot e tems fo

the rst me


25/47

25



t ade s ac oss all

ve countries in

o st d we e

gene all el ctant

to d sclose

exactl ow t e

par cular supply

chains func on

Tey will have purchased the socks in packets o our or 10 Rand rom the nearby A rica Mall, where Somali, Eritrean and Ethiopian retailers supply the street trade.Tey will have sourced the packets rom the Chinese wholesalers at the citys China Mall, or as little as 5 Rand each.

For the most part Chinese traders sell Chinese products, although Lesotho is a notable exception. Other than discussing the origin o their goods, however, tradersacross all ve countries in our study were generally reluctant to disclose exactly how their particular supply chains unction. Some traders sourced their goods direct

rom China, others used wholesalers based in their country o operations, and somerom outside South A rica would source their goods directly rom China Mall or

Oriental Plaza in Johannesburg. Nearly all operated on a cash-only basis and a sig-ni cant number did not pay tax.

A ew o the interviewees were prepared to discuss the issue o tax and customs,

even though it was clearly a highly sensitive subject. Although perceptions o cor-ruption varied sharply across the ve countries, in terms o the container ees paidby wholesalers and retailers there was a rm view that it was not easible to gothrough o cial channels: widespread corruption orcedeveryone to pay xed ratesper containers to middlemen in order to acilitate their passage through Customs.Should a trader decide to pay all the correct taxes, VA and so on, their businesses would collapse because it is not, in their estimation, a level playing eld. Even i they wished to do conduct their business on a strictly legal basis (as many said they would) they are not able to, in their minds; consequently, they usually avoid bank-ing or declaring their pro ts, recording the goods they have imported, and so on.

Figure 8: Origin of goods sold by Chinese traders


26/47

26



unexpectedl , t e

o en reserved their

a s est comments

for their puta ve

g a d ans n Af can

co nt es C nese

diploma c and

consular o cials

As a emale clothing trader in Johannesburg explained,because you are not able to import anything legally, you are orced not to obey the law, it is the environment, and i I could bring some products in legally, why would I not do it? But customs are so cor-rupt; they let other people bring their goods through corruption, thus orcing everyone todo the same in order to compete.On the same note, a luggage shop owner remarkedthat no business is 100 per cent legal, even white peoples chain stores, their goods alsocome rom some place illegal. Another wholesaler in Johannesburg acknowledgedthat paying tax is the responsibility o every individual, but it is something that the Chinese do not do.

Beijing: Distant and Disinterested

Te issue o tax evasion perpetuates and rein orces other practices that impactChinese trader activity, particularly the bribe culture the overriding sense thatall problems can be resolved by money. raders continually protested in our study that, other than their immediate amily or network, they cannot rely on anyone inlocal societies to protect their interests; even lawyers are generally viewed as a wasteo time.

Unexpectedly, they o ten reserved their harshest comments or their putativeguardians in A rican countries Chinese diplomatic and consular o cials. Ninety-

ve per cent o our survey claimed that they had never received assistance o any kind rom their respective Chinese embassies. Te anger expressed by a Luandan

Figure 9: Have you ever received any assistance (e.g. consular/immigra on) from the Chinese Embassy?


27/47

27



rat e t an los ng

a job, the Chinese

w ll do t as long

as t e can cove

t e ove eads

merchant was typical:there are more than 300 000 Chinese here, yet the embassy only work hal a day a week in dealing with Chinese matters they completely do not helpus. Tey are nicer to the Angolans. A clothing trader in Maseru was more caustic:the embassy here only knows how to eat rice, they never help us Chinese, they are totally use-less.Te embassys response to several who complained o ill-treatment or unlaw ularrest was thatwe cannot intervene in the internal afairs o another country. At leastthey are consistent, some might say.

Increasing Compe onOne o the key dynamics a ecting Chinese trader communities is the recent emer-gence o new competitors. Depending on the centre and country, typically it iseither newly-arrived Chinese, Vietnamese or Somalis, although other groups suchas Pakistanis, urks, Indians and Lebanese, as well as small numbers o Congolese,Ethiopians, Ghanaians, Nigerians and Malians, were all mentioned as part o anincreasingly competitive marketplace or Chinese traders in A rica.

For most o our sample, the incomes to be made in A rica when comparedto their perceived opportunities and earning power back in China were still su -

cient to make it worthwhile to continue trading, even i none would be drawn onexactly how much they were earning. Te overwhelming majority o our study said

that pro t margins were narrowing, however.Its not the same as be ore,a trader inthe Cape own area complained,this whole area is ull o Somalis, they also get goods rom the same place and so there is a lot o competition one re ugee status permit canbe used by ten peoplebecause they dont even run a proper business, the [Somalis] canaim or a much lower pro t margin.In Luandas So Paulo district several Chinese

Figure 10: Is business becoming more compe ve?


28/47

28



had t e C nese

become vic ms of

t e own s ccess?

shopkeepers rued the loss o business to new traders rom Vietnam. Tey paid less wages to their sta and were undercutting the Chinese on price, although at least

or now the Vietnamese businesses, such as textile and garment shops, catered to a more niche market.

Te larger question raised by our interviews was whether the various markets werenearing, or had reached, saturation point. Had the Chinese become victims o their own success? In Gaborone, or instance, more than 80 per cent o traders saidthat business had become more competitive, mainly because other Chinese were

Figure 12: From whom do Chinese traders rent?

Figure 11: With whom do you compete?


29/47

29



T e C nese

popula on in South

Af ca s ma ked b

va o s cleavages

and some tens ons

making li e much more di cult. Tey regularly decried the erociously competitiveChinese approach to business, which regularly descended into the type o price wars not typically seen among other groups. As one trader noted, the Chinese aredi erent rom oreigners, who are less negotiable on price. Rather than losing a job, the Chinese will do it as long as they can cover their overheads:everybody competes, competes on prices. It is almost like a vicious circle that the tender price is lower and lower Locals and oreigners look at how much pro t their companies need Te Chinese look at how many people there are in the company I need to guarantee their ood, their accommodation, their wages. So I need to get the business. Te Chinese want to keep the company operating, maybe not to make money, but just to keep the company operating.

Only in South A rica do Chinese own their own shops or rent rom otherChinese in signi cant numbers. In Botswana the gure was around one quarter, inZambia less than one in ten. None o their business premises in Angola or Lesotho were Chinese-owned. Notably, about hal o the traders in Lesotho, Zambia andBotswana rented rom Indians, a telling gure which speaks to their own, largely under-appreciated role in A rican economies. Te issue o ownership and xedassets is one o several key issues that are sure to infuence the long-term plans o Chinese traders in each o our survey countries.

Key Country Findings

South AfricaSouth A rica is the only country in our study with a longstanding Chinese com-munity. From the rst migrants in the 1870s the population rose steadily overthe decades to number around 10 000 by 1980.27 Te Apartheid regimes strong ties with aiwan paved the way or aiwanese entrepreneurs to come and establish

restaurants, rms and small businesses in towns and cities. From a high o 40 000,by 1994 the number o aiwanese dwindled to about 20 000. Since then, post- Apartheid South A rica has welcomed up to 200 000 migrants rom the PeoplesRepublic o China and Hong Kong.

Te Chinese population in South A rica is marked by various cleavages andsome tensions, particularly along the divide that separates the latest Chinese immi-grants who are o ten perceived as illegal and the established South A rican Chinese,especially the middle class rom Hong Kong and aiwan, who have citizenship.28 Tis diverse community includes a ew prominent Chinese South A ricans whosit in the countrys parliament, the majority who occupy the actory, merchandise


30/47

30



T e p nc pal

ta get of t e

e was t e c t s

Met opol tan Pol ce

and importexport industries, and a minority o the new arrivals who are allegedly involved in clandestine transnational crime syndicates.29

Chinese traders in South A rica were the most settled community o the vecountries in our study, with nearly 60 per cent having been resident or more than

ve years, more than hal o which had lived in the country or more than ten years.South A rica is the only country with traders o more than 20 years continuousresidence.

Our South A rican sample revealed a number o intriguing paradoxes. On theone hand, the interview subjects in Johannesburg were nearly unanimous in cit-ing crime and corruption as their biggest concerns. Te principal target o theirire was the citys Metropolitan Police. Nearly all o our Johannesburg subjects hadexperienced numerous run-ins with the police, especially on the citys roads, wherethey elt most exposed. Harassment and demands or payment by tra c cops hadbecome so routine that they tried to avoid driving where possible, and i they didthey would carry as little money as possible. Te ear o Johannesburg extended well beyond the citys perimeter, as evidenced by the remarks o a Lichtenburg trader who sourced his goods rom China Mart:every time when I am approaching Joburg, I start to worry, I breathe normally again when I am driving outthe police look at our number plate and know we are not local and are coming to etch goods, you

cant hide it. I am always holding my heart in my mouth.In sharp contrast, just 26 per cent o our interview subjects in the Cape

own area cited corruption as a serious problem. Tis compares to 87 per centin Johannesburg. Crime was a major concern in both centres, although generally traders in Cape own perceived the issue as a problem o petty the t rather than a threat to their sa ety.

Figure 13: Is corrup on a serious problem? Comparing Johannesburg andCape Town


31/47

31



Jo annesb g

is the major

b of C nese

wholesaler ac vity

n So t e n Af ca

Figure 15: Comparing the number of Chinese and locals employed byChinese traders

Somewhat surprisingly, then, traders in Johannesburg had lived in the city or anaverage o 9 years, longer than any other major centre we examined. South A rica also had the highest number o respondents who de nitely planned to stay in thecountry, even i the number was still relatively low, 20 per cent. Explaining herreasons or making Johannesburg her home, a emale underwear trader quipped:Te place you ought a battle is the place where your home is.Doubtless her and

other Chinese traders decision to remain, despite the serious drawbacks, is that Johannesburg is the major hub o Chinese wholesaler activity in Southern A rica and a dynamic commercial centre where there are still signi cant pro ts to bemade.

Figure 14: Comparing how long Chinese traders have lived in select ci es


32/47

32



t ngs ema n

be er for Chinese

t ade s n Botswana

t an n most and

pe aps all ot e

Af can co nt es

raders in South A rica on average employed the least number o locals, three.O them, many were not in act South A rican but other A ricans, particularly Zimbabweans, which many traders indicated a pre erence or on account o either their education or reliability. Intra-Chinese competition was sti est in Johannesburg, whereas in the Cape and North West Province several intervieweesnoted that their pro t margins had been squeezed in the past ew years by new trad-ers on the scene, especially Somalis.

BotswanaChinese migrants rst arrived in Botswana in the 1980s to work on large-scaleconstruction projects hospitals, government o ces, urban sewage systems undertaken by Chinese state-owned enterprises.30 raders ollowed in the 1990sand by the end o the 2000s their numbers reached several thousand, scatteredthroughout the country. Tey constitute by ar the largest group o sel -employedpermit-holders in the country.

For nearly two decades relations between China and Botswana prospered onthe back o numerous Chinese investments in the country. China also won many

riends in Botswana through their numerous charity works, unding o HIV/AIDSpatients care and joint cultural programmes, which indirectly probably helped

ease the transition into various parts o the country or traders.31 Initially, the new arrivals were seen as taking a largely complementary approach to local tradersactivities.32 Tey were particularly welcomed by rural dwellers who relished theopportunity to buy various goods and oodstu s or the rst time.

At one level, things remain better or Chinese traders in Botswana than in most and perhaps all other A rican countries: perceptions o corruption were by arthe lowest in Botswana, with 38 per cent saying it was a serious problem; concernsover crime were also signi cantly lower than the other survey countries, with just22 per cent citing it as a major problem; and quality o li e in Botswana ranked

the same as in South A rica, with only 13 per cent indicating that it was a majorproblem. What made traders in Botswana increasingly uneasy was the apparent shi t

rom an accommodating approach by government to an antagonistic, even hostileattitude to small-scale Chinese businesses. Some believe they are scapegoats or a wider change in attitude nationally, which has more to do with politicians and localbusinessmen stoking up resentment over the dominance o Chinese companies inthe construction business, which has pushed many Batswana out o the industry.Several interview subjects contrasted the style o ormer President Festus Mogae, whom they believed was pro-Chinese, with the policies o the current President,


33/47

33



mo e t an

30 pe cent of

nte v ewees n

Botswana sa d

t e dec s on on

w et e o not to

et n to C na

was dependent

on local pol c

Ian Khama. Tis helps explain why more than 30 per cent o interviewees said theirdecision on whether or not to return to China was dependent on local policy.

Teir main concerns boiled down to a piece o legislation that would e ectively bar current Chinese small businesses in the clothing sector, which is appar-ently reserved or indigenous Batswana, rom renewing their operating licences.Tey would still be permitted to apply or visas and work permits but would haveno business ownership rights, there ore rendering their shops illegal. In the periodsince our last interviews were conducted in Botswana in September 2011, Chineseclothing traders have indeed been unable to renew their licenses and apparently been given an unspeci ed period to nish o their existing stocks and then vacatethe sector. Several traders in Francistown indicated that once their stocks are n-ished they will return to China.33

LesothoTe rst migration o Chinese to Lesotho was rom aiwan in the 1970s. Later,

aiwanese investors capitalised on the Kingdoms boom in the textile industry aided substantially a ter 2000 by the US A rica Growth and Opportunity Act(AGOA), which gave certain low-income countries pre erential trade arrangementsto export to the US market duty ree and acilitated the migration o managers

and skilled workers rom both aiwan and mainland China.34 While the numbero actories declined in the mid-2000s, the migration o Chinese traders to Lesothoincreased. In 2008 Chinese comprised just under 1 per cent o Lesothos 2 mil-lion people by one estimate,35 although given the presence o Chinese in almostevery village or town today running clothing shops, supermarkets, petrol stations,internet ca es and so on it is likely substantially greater than 20 000.

O all the Chinese trader communities in our survey, those operating in theremote, barely-accessible outposts o the mountain Kingdom illuminate moststarkly the qualities on which their success in A rica rests. What stands out in our

survey is their adaptability in speaking a local A rican language; their ability tofourish in the most isolated and deprived communities, where they experiencepoor quality o li e; their perseverance despite extremely high perceptions o crime(the highest in our survey, 90 per cent said it was a major problem) and corrup-tion (78 per cent said it was a major problem); and their ability to carve out a comparative advantage where presumably they could be disadvantaged, in this casesourcing their goods: less than hal were sourced rom China, the majority wereeither local (in this case, primarily South A rican) or sourced rom somewhereother than China.


34/47

34



locals ad a lot to

lea n f om

t e C nese n

te ms of sk lls,

a d wo k and

b s ness know- ow

Revealingly, not a single trader interviewed said they de nitely planned to stay in Lesotho, the only group in our survey where no respondents intended to maketheir current place o business their home. In part this is due to issues such as highcrime, poor education and low quality o li e. More and more, however, tradershave become ear ul o the rising tide o resentment amongst Basotho, uelled by Chinas perceived dominance over many sectors o Lesothos economy. Tis earhad prompted many traders to increase security at their shops, even i the heavily-armed and highly visible young locals they employed were o ten more or deterrente ect than actual protection.

Lesotho is the only country in our survey where local opinions o Chinese trad-ers were solicited, although it was done only in passing rather than systematically.Te brie conversations revealed a mixed picture. Te rst subject, outside the capi-tal Maseru, railed against Chinese traders, accusing theminter alia o ill-treatmento their Basotho sta . He also spoke variously o larger Chinese companies whichhad sole distributor agreements in Lesotho with other Chinese businessmen, whichdisadvantaged local rms; in doing so, he revealed how dynamics involving China and Lesotho at government-to-government level doubtless infuenced general atti-tudes toward the Chinese operating at the micro-level.

Te second subject in Butha Buthe shared an anecdote involving Chinese

supermarkets. Whether act or ction, it isexemple par excellence o stories that canseverely undermine relations between communities once they take hold. He saidthat the Chinese routinely sell what they market as a 2kg chicken but is in act less weight; the shopkeepers are accused o tampering with the chicken by removing some o the meat and then somehow resealing the bag. We were not able to ascer-tain how widespread the allegation was in Butha Buthe, or elsewhere, but clearly rumours o this nature eed negative perceptions o Chinese business practices.

Te last subject in eyateyaneng painted a sharply contrasting portrait o Chinese traders. Having worked in a Chinese-run textile actory or nine years,

he eventually started his own clothing store with his wi e, selling local hand-madetraditional clothes and modern clothing that he would source rom Johannesburg. Although he had encountered numerous challenges in running his business, he

ound the work satis ying. Te Chinese presence in Lesotho was, in his view, pos-itive; what needed to change was the Basotho mindset, which greatly impededentrepreneurship. He noted that locals had a lot to learn rom the Chinese in termso skills, hard work and business know-how.


35/47

35



t e ave age lengt

of me traders had

been n Angola

was two ea s

Angola AngolanChinese relations began during the Cold War but only took o in the1990s when Beijings hunger or Angolas oil put the relationship on a whole di er-ent plane.36 oday Angola is a central pillar in Chinas A rica strategy and its largesttrading partner on the continent. Te two countries have signed numerous tradeand cooperation agreements, and China has played a leading role in the countryspost-war construction boom.37 Statistics rom 2007 indicate that there were at least22 000 Chinese migrants with visas in Angola 38, although current estimates put thetotal number o Chinese in the country anywhere rom 100 000 to 300 000. Tehigh estimates are accounted or by the large number o Chinese workers who arecontracted on large-scale construction works.

Figure 17: Average length of me Chinese traders have lived in eachcountry

Figure 16: Length of me Chinese traders have lived in each country

A minority o these workers have stayed on to try their luck as merchants, thoughmost traders are new arrivals rom China. In our survey the average length o timetraders had been in Angola was two years, hal as long as the next lowest gure or


36/47

36



robbe es and

a acks on Chinese

t ade s and wo ke s

n Angola ave been

w del epo ted

n ecent ea s

traders elsewhere, which was our years in Zambia. Although estimates suggest thatChinese migrants earn up to three times more in Angola than in China, our survey revealed strong disincentives or traders to remain in the country or long periods.39

Angola scored the highest in our survey on perceptions o corruption and sec-ond highest on crime. Almost without exception, traders bristled at the scale o police corruption.Tere are many security issues,said a general trader in the Ben ca area o Luanda,but the police are worse than the bandits. Another in So Paulomarket said, when I see the police, it is like I am seeing a ghost I have to run and hide. In their eyes, government o cials were no better, according to a trader romZhejiang, who also decried his embassys inaction:the Angolan government depart-ments extort money rom us, they threaten us to say that we will be arrested. Why are they so un riendly to us? Tey say we will be arrested. It is because the Chinese govern-ment has never inter ered.

Robberies and attacks on Chinese traders and workers in Angola have been widely reported in recent years40, and in our survey several respondents spoke o colleagues being robbed or killed, especially when in transit. Once again, traders who had been victimised by crime elt utterly helpless in the ace o indi erence

rom Angolan authorities and their own embassy. Language, too, proved a barrier toseeking redress, as many elt their rudimentary Portuguese was wantonly exploited

by o cials. As in Botswana, many observed a change in attitudes amongst locals. Where once the Chinese were hailed or helping Angola recover rom war, a ew widely-reported incidents particularly the collapse in 2010 o part o a hospitalbuilt by the Chinese41 have omented anti-Chinese sentiments.

raders interviewed in the coastal cities o Lobito and Benguela, in central Angola, were generally less negative than their counterparts in Luanda thoughall noted that as more traders have moved south rom the capital, crime has stead-ily worsened. Eighty-seven per cent o our Angolan sample de nitely planned toreturn to China. As in Lesotho, crime, education and medical care were cited as key

reasons why they wou

africa in their words: a study of chinese traders

Documents