Thursday, October 21, 2010

African Traders in China and Substandard Goods

photo credit: Evan Osnos, The New Yorker

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One of the primary complaints I hear on China-in-Africa is the issue of substandard Chinese goods in African markets. Clearly, Chinese traders are bringing in a lot of these goods. But an under reported factor is the role of African traders in the supply chain.

As many as 20,000 African traders and entrepreneurs live, visit, and work in a suburb of the city of Guangzhou (Canton) called by locals "Chocolate City". The suburb is divided into different neighborhoods -- Nigerian, Malian, Benin and so on. From time to time the local police crack down on traders who have overstayed their visas.

A report by Bill Schiller in The Star (Canada) on a crackdown last year caught my eye recently because it contained an illuminating reference to practices of some of the African traders and how substandard goods enter African markets. A Nigerian trader explains:
"My brother came here first to seize the opportunity. So I came, too. Everything is so much cheaper here," he said one recent afternoon.
He and other African buyers tour local factories regularly, he says, looking to buy "seconds" with minor imperfections.
A pair of blue jeans can be had for as little as 15 Chinese yuan, the equivalent of $2.45, he says. These he can sell right here at his stall for 28 yuan, or about $4.60. But back home they can fetch as much as 45 yuan or $7.35, maybe even more.
Other reporting elaborates on these practices. Here's an excerpt from the English translation of an article on Chocolate City that appeared in Southern Weekend (courtesy of Africafeed.com):
“Every day after noon, “Chocolate City” begins to turn lively. Tens of thousands of black people seem to erupt from the ground in groups of twos and threes. Carrying large black plastic bags or wearing backpacks, they look through the stalls along the street. The stalls are filled with “tail goods” (excess production that did not meet quality standards) from thousands of small factories throughout Guangdong: blue jeans, unbranded television sets, hand-assembled cell phones.”
For more visuals on Africans in China, click here for Evan Osnos's great slide show from the New Yorker.

Complaints about substandard Chinese goods in African markets abound. Here's one way these goods enter, and why. The price differentials also help explain why African manufacturers are having such trouble competing with Chinese firms. In a future post I'll link to a paper on ways in which consumers in one Tanzanian market are successfully dealing with these challenges.

8 comments:

  1. a great article of the processes of globalism on a human level. hopefully people realize this not inheritantly an african issue.

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  2. My fellow African leaving in Guangzhou and areas: Please note that by buying and selling substandards to Africa, you are contributing in a way or in another in what is happening in Africa: poverty, disease, etc. You have to know that no market is ready to buy and use sustandard items and you have to know what comes after using substandard items. Living in China or in any country, you have to live in a legal way by having all your papers and docments up-to-date. Do nothing that will damage African image in China or elsewhere, safeguard the friendly relations between China and Africa. Lets work for a better China-Africa Relations! Thank you.

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  3. As said here before; that's globalisation. Usualy the faces of globalisation are transnational companies but some African traders are also part of it. Only their risks and benefits are of another magnitude ( cfr. www.pambazuka.org/en/category/panafrican/68191 )
    But pointing to those African cargo traders is like pointing to the African solders in the colonial armies...
    regards
    dan

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  4. Interesting article – look forward to the post on the Tanzanian market. I recently spent some time in Derb Omar, Casablanca, speaking to some of the Chinese traders there. Derb Omar is primarily wholesale, so the customers were mainly Moroccan shopkeepers etc. The Moroccan traders were fairly laidback about the Chinese competition, either citing the poor quality of the goods or sourcing their own Chinese goods. Relations between the Chinese and Moroccans seemed to be good and some of the Chinese traders I spoke to employed Moroccans.

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  5. Please replace the image from storm-front with that from another source or no image at all. Storm-front is a "white nationalist" organization.

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  6. Thanks for the tip. I don't know "Storm-front" but I've now changed the image to one of Evan Osnos' from The New Yorker.

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  7. I appreciate your articles, though i do not seem to find much about the risks involved in China's investment in Africa.

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  8. My fellow African leaving in Guangzhou and areas: Please note that by buying and selling substandards to Africa, you are contributing in a way or in another in what is happening in Africa: poverty, disease, etc. You have to know that no market is ready to buy and use sustandard items and you have to know what comes after using substandard items. Living in China or in any country, you have to live in a legal way by having all your papers and docments up-to-date. Do nothing that will damage African image in China or elsewhere, safeguard the friendly relations between China and Africa. Lets work for a better China-Africa Relations! Thank you.

    ReplyDelete