Sunday, February 6, 2011

USA Africa Dialogue Series - China's economic invasion of Africa

China's economic invasion of Africa

About a million Chinese, from engineers to chefs, have moved to work
in Africa in the past decade. Xan Rice talks to some of them to find
out why

Xan Rice
Monday February 7 2011
The Guardian


http://www.guardian.co.uk/world/2011/feb/06/chinas-economic-invasion-of-africa


In December 1999, a 24-year-old Chinese man called Zhang Hao left
behind the freezing winter of his native Shenyang province 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 [http://en.wikipedia.org/
wiki/Zheng_He
" title="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. [http://www.guardian.co.uk/world/
2010/dec/23/china-africa-trade-record-transform
" title="the trade is
00ADestimated 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."


guardian.co.uk Copyright (c) Guardian News and Media Limited. 2011

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