Monday, August 20, 2012

Kenyan Traders Protest Against Chinese Competitors

The proliferation of Chinese traders in African markets is one of the perinneal sore spots in China-Africa relations. This video highlights the recent protests in Nairobi where African traders fear and resent the competition. Consumers generally welcome the expansion of products at lower cost, but frequently complain about the low quality of cheap goods.

On the plus side: cheap Chinese cell phone have allowed Africans at the bottom of the pyramid to communicate in unexpectedly large numbers. On the negative side, counterfeit pharmaceuticals -- a regular phenomenon -- can exacerbate illness or fail to prevent death. This creates a climate of fear and distrust affecting all Chinese pharmaceutical exports. None of these products need to be sold by Chinese, of course. As I've noted in this blog, thousands of African traders visit Chinese cities and export directly from China to their home markets.

While some traders believe that their governments are required to accept Chinese immigrants or traders as a quid pro quo for aid, I have never seen any seen any evidence of an agreement to this effect. Some governments do allow Chinese construction companies to import a proportion of Chinese workers for a project. Some works may stay on as traders. Ultimately, decisions about local competition rest with African governments. In Ethiopia, for example, there are no Chinese retailers on the street.

A hat tip to Solange Chatelard.


Stephen Mogaka said...

Greetings Professor,

My name is Stephen Mogaka Biko. I am a researcher on Kenya-China relations and I had a chat with you during your recent visit in Nairobi. I agree with you that the issue of Chinese traders in Africa is a complex one. I think the issue of Chinese traders speaks to the issue of agency as far as the relationship between Africa and China is concerned. When local traders protest about Chinese traders the implication is usually that the government has failed in protecting its vulnerable people and is only interested in attracting Chinese aid and investment.

It behooves African leaders to play their role in shaping the relationship in a manner that advances the interests of their citizenry. Only then, can ordinary Africans begin to believe that the relationship is indeed a mutually beneficial relationship. In this regard, I think African governments must emulate the likes of Ethiopia (where as you have mentioned in the past) the government has limited the involvement of Chinese traders in certain sections of the economy.


Below is a news article on local unease about Chinese traders for those who are interested in the issue.

Deborah Brautigam said...

Good analysis, Stephen. There are not many governments like Ethiopia in the developing world. Even South Africa has seen a sharp influx of Chinese shops.

Anonymous said...

I simply fail, as hard as I try, to understand the usefulness of protectionism.

Limiting the influx of anybody in any trade - and I am not talking only about the Chinese in Africa - to protect the locals, at best, will generate a temporary fix to whatever that already ill the society.

The best, and most obvious solution, in fixing any problem, is to fix the problem at its roots, and in the case of the African traders, the root cause is the inability (and/or unwillingness) of the African traders to compete with those from the outside (not only from China, but also traders from the Middle Eastern region, who have out maneuvered local African traders for centuries).

It is thus important for all, especially for the Africans themselves, to enable themselves to be as competitive - if not _MORE_ competitive - than anyone on Earth.

One thing that Africa can learn from Asia is the will to make oneself better.

Like Africa, Asia used to be bullied by the West.

Like Africa, Asia used to be colonized by the West.

Like Africa, Asia used to be exploited by the West.

But Asia today, - while I can't say the entire Asia has risen, at least a sizeable portion of Asia has arisen - has shown the world how competitive they can be.

Cases from Japan to Korea to India to China has proven to us that one do not need to be weak forever, that one can become strong, if only one has the will to change.

It is time for the Africans to learn from their brethren in Asia, and be weak no more.

Protectionism is never a cure.

Protectionism will bring more bad than good.

Anonymous said...

You Miss the point here, the whole issue is how A Chinese citizen gains entry in to Kenya and becomes a retailer. We are not talking about Chinese Millionaires in this case. The Chinese are competing with other hawkers on the streets. Whta kind of visa do they have in the first place. Do you think an african would be allowed to do the same thing in Beijing?/Peking?

Anonymous said...

its happening! chines are selling their wares in the streets of Nairobi Kenya

Anonymous said...

Hahaha, you think Asian countries aren't protectionist.

Here is how you make protectionism work:

Pick an industry in which you believe your country could be competitive internationally. Implement sufficient protections for that industry that foreign competition cannot kill it; but not necessarily enough to keep them out entirely. In the most famous cases the industry has been autos, and the protection has been import duties. If you're a big enough market, you can develop your local industry by inviting foreign manufacturers to set up shop to develop the local knowledge base (China with everyone, Korea with Ford and GM, to a lesser extent Japan at various times with various foreign companies) or you could just copy foreign technology for the domestic market (China, Japan early on). You could also have the state provide a market for the products of the industry in order to build it up (like Korea and China with their steel industries) but then you've got the risk of overcapacity (China).

There are (or were, immigration has changed) plenty of Africans in Beijing on illegal visas. But no, not many African street merchants. (And those I did encounter were selling drugs in Sanlitun.)