Monday, December 30, 2013

Nigeria: Labour Practices in Chinese Factories

A Chinese biscuit factory in Nigeria. photo credit: Paolo Woods
I've been snowed under (so to speak) with work and travel for the last six weeks or so. I hope to blog more in the new year, since it's one of the most fun parts of my professional life. Meanwhile, I'll be posting some links to other interesting material on China's "going global", particularly in Africa.

Irene Yuan Sun, author of the popular post on this blog, "A Blind Date in Namibia," spent some of last summer in Nigeria, where she wrote up her keen observations in two articles for the Guardian (Lagos). In her first article, "Labour Practices in Chinese Factories," (October 19, 2013), Irene notes that investors from Hong Kong have been running factories in Nigeria for several decades. One factory is one of the world's largest makers of flip-flops, another, just opened, will be one of the world's largest producers of rolled-steel. An earlier Guardian article by Okechukwu Onwuka, "No power, no infrastructure, Yet Chinese factories are flourishing in Nigeria," also comments on this phenomenon.

Chinese employers have been criticized by NGOs and others in Nigeria for operating factories where workers are treated "more or less like slaves" -- yet most critics have not themselves actually been inside a Chinese (or Hong Kong) factory in Nigeria. Irene, who is bilingual, visited eight factories to observe their work conditions. She observed large variations in lighting, cleanliness, whether workers had protective clothing and safety equipment, yet, she says, the gates at "several of the factories I visited were crowded with Nigerians who were hoping to find work."

Labor relations are one of the most commonly cited issues in the China-Africa engagement. Irene's suggestions for bilingual labor mediators at each factory and random safety inspections are good ones -- but hard to put into practice. Safety inspections with bite require a government that cares about workers. However, with the rapid expansion of Chinese language courses in Africa, the language of advocacy, labor relations, and mediation might shift from being exclusively English/French/Portuguese to include a focus on communication with the continent's newly significant investors from China.

Thursday, November 21, 2013

Opportunity: SAIS Ph.D. Program, China-Africa Economic Engagement

I am looking for an excellent candidate to undertake Ph.D. research on China-Africa economic engagement under my supervision, to enter in the Fall of 2014. SAIS offers fully funded Ph.D. fellowships. Candidates must already have an MA degree, ideally in development studies, economics, or international relations.

The ideal candidate will have some background in China-Africa relations, fluency in Chinese including the ability to read Chinese, field experience, and excellent English. Admission will depend on academic excellence (high GPA, excellent GRE scores), and a convincing statement of research interests that includes China's going-out engagement in Africa, broadly defined. Quantitative skills (econometrics), Portuguese or French would be assets, but not required. 

The deadline for applications is December 15. For more information, and to apply, consult the SAIS Ph.D. program website here.

Tuesday, November 19, 2013

New Research on China, Africa, and the Media

The South African journal Ecquid Novi:  African Journalism Studies has a special issue (v. 34, n. 3) on China and Africa. For the moment (and this likely won't last) the issue appears to be available for free.  I haven't read all the articles yet, but I see several scholars I recognize, including Bob Weseka from Kenya who has written for this blog, and Iginio Gagliardone, who used "participant observation" to analyze CCTV in Africa. Download while you can.  h/t to Yoon Jung Park

Saturday, November 16, 2013

China and the Phillipines: Humanitarian Aid

A week after Typhoon Haiyan hit the Philippines, the Chinese have been bit players in the response, with an initial pledge of 10 million yuan ($1.6 million) in-kind aid, and $200,000 in cash. Is this all we can expect? Probably not. Yet while all the news stories on the meager Chinese donations usually note that China has "the world's second largest economy," they usually fail to put China's generosity (or lack) into context. Context helps to understand Chinese actions in two ways.

First, any donation should properly be judged against not against a country's absolute wealth but in relation to its wealth and population: i.e. wealth on a per capita basis. Seen from this perspective, China falls to #92 in the list of prosperity (using the World Bank's measure of 2012 GDP/pc, or per capita, PPP). With a per capita GDP of $9,233, the Chinese are far less wealthy than the countries that have contributed the most to the relief effort, so far: the UK ($32 million, $36,950 GDP/pc), Australia ($30 million; $44,598 GDP/pc), and the US ($20 million; $49,965 GDP/pc). (Many of these countries have also pledged in-kind assistance). Still, the response could have been more generous. Indeed, as I outline below, a historical perspective shows just how paltry the Chinese response has been so far, and how much it likely has to do with Chinese bitterness about the Philippine's recent actions in the South China Seas.

Second, China has been more generous in other humanitarian disasters. China is not a new player at humanitarian aid. Shipments of food in times of famine are a familiar element in Chinese assistance. The Chinese Red Cross has been providing disaster aid since at least 1981.  In 1985, the Chinese Red Cross raised $5 million for famine relief in Africa. After the Haiti earthquake, the Chinese pledged over $7 million in cash assistance.

History helps put China's paltry assistance to the Philippines into perspective. Below is a section from my book on China's aid program, The Dragon's Gift, pp. 121-122.
... [Over the past decades,] China has given bilateral earthquake relief to Algeria and Iran, mud avalanche relief to the Philippines, tents, mosquito nets, and blankets to Iraq and Somalia, and even donated $5 million after the Katrina hurricane disaster in the United States...
... Today, China’s humanitarian aid has greatly increased, consistent with Beijing’s relatively new desire to project itself as a “responsible major power.” It is also increasingly being channeled multilaterally, as in Zimbabwe’s 2009 drought, when the Chinese made a $5 million cash donation to support WFP [World Food Program] operations.

This new multilateralism began during the 2004 Indian Ocean tsunami. At first, China reacted unilaterally, as its foreign emergency response mechanism swung into motion. Wang Hanjiang, then head of the Department of Foreign Aid, met quickly with his counterpart in the Ministry of Foreign Affairs to map out the first steps in China’s response. After getting approval from the State Council, they called in the Foreign Affairs Office of the Chinese Ministry of National Defense, and the Ministry of Civil Affairs, which carried out the tasks.

The Chinese were proud that a planeload of supplies from China was the first foreign aid to arrive in Sri Lanka, flown directly from a Beijing factory only two days after the disaster. Chinese medical teams and engineers were posted to a number of countries struck by the tidal wave. But then China publicly pledged more than $60 million, and channeled almost a third of this through the UN – a first. (Some in the region speculated that China’s historic response was partly done to outgun Taiwan, which had pledged $50 million for the recovery effort.) Private citizens in China donated more than $61 million through the Chinese Red Cross and the China Charity Federation. With the disaster of the Pakistan earthquake following the tsunami, China’s official bilateral humanitarian aid for 2005 ultimately totaled nearly $128 million, with NGOs and Chinese companies raising an almost equal amount.
I anticipate that Chinese aid to the Philippines will rise, but Beijing will not be able to easily play down the conclusion that their response to this disaster was stingy, and petty.

Monday, October 28, 2013

China's Environmental Impact in Africa: New Evidence

Curious about China's environmental impact in Africa? See this new piece by Daniel Compagnon and Audrey Alejandro, "China's External Environmental Policy: Understanding China's Environmental Impact in Africa* and How It Is Addressed", Environmental Practice, 15(3), 2013.  While we still lack systematic, cross-national evidence on this impact, this article is a good example of the growing trend of scholars doing fieldwork and subjecting the conventional wisdom on Chinese external engagement to the test of evidence. The authors' research suggests that in South Africa, "Chinese companies are as compliant as the Western ones—and perhaps more than Indian companies—when it comes to local law, be it on labor or environmental issues." They emphasize the importance of local African agency in determining environmental outcomes. It also contains a helpful overview of changing policies on the environment and going global, in China.

Article abstract: "Many Chinese economic actors in Africa have come under harsh criticism for the alleged environmental impact of their activities. This impact is not always documented, is uneven across the continent, and should be compared to that of business actors from other countries—in particular
from the OECD. One major factor accounts for the recorded differences: the policy and regulatory framework within which these business actors operate. The African weak state is not conducive to the adoption of robust standards and their subsequent implementation. However, the shift in Chinese policy at home on environmental issues is already producing some changes for the state-owned companies, and there is a growing concern in China’s leading circles about the international image of the nation and its companies turning global."

h/t to Yoon Jung Park. *Update: when I wrote this, the article was accessible free, online. That's apparently no longer the case. Apologies. Thanks to @krizcpec for pointing this out.

Tuesday, October 22, 2013

TI: Chinese Multinationals Score Low on Transparency

A new report from Transparency International rated Chinese companies lowest among 100 companies from the emerging market countries for levels of transparency. This has implications for African countries and civil societies. 

Beijing has required little of its firms. Yet what is also interesting is that two Chinese firms were among the five best performers, with regard to transparency (below). Unfortunately for Africa, two of the firms that operate on a large scale across the continent, Huawei and CNOOC, are also among the firms that scored 0 on TI's scale (below). Add to this the zero rating of Brazil's huge engineering firm, Odebrecht Group, and the challenges for transparency in Africa are apparent. It would be interesting to study the "best" and "worst" Chinese firms on this list to discover why some have chosen to adhere to a growing international norm, while others choose to remain opaque.

Emirates Airlines (UAE)Anshan Iron and Steel Group (China)
Johnson Electric (China)Chery Automobile (China)
Petronas (Malaysia)China National Offshore Oil Corporation (China)
Shanghai Electric (China)China Shipbuilding Industry Corporation (China)
United Company Rusal (Russia)Chint Group (China)
 Galanz Group (China)
 Geely – Zhejiang Geely Holding Group (China)
 Huawei Technologies (China)
 Mabe (Mexico)
 Odebrecht Group (Brazil)
 Wanxiang Group (China)
 Source: Transparency International. 100 = most transparent. 0 = least transparent. 

Friday, October 18, 2013

Guest Post: A Kenyan's Tales from the Beijing Subway

This guest post is courtesy of Bob Wekesa, Kenyan journalist and Ph.D. candidate at China Communications University.
When I first came to China in the autumn of 2011, it was with feelings clear as mud. On the optimistic expectations continuum, I was all upbeat about imbibing a new culture framed as mystical and mysterious. On the opposite end of the spectrum, I was wary of China’s reputation as a communist state. My mind raced hither and thither even as the Emirates Airways taxied on the runways of Jomo Kenyatta International Airport in Nairobi bound due East.

Arriving at Beijing Capital Airport on the evening of September 8, I and would be classmates at Communication University of China were received by volunteer students. I was mesmerized by the sheer smoothness and neatness of the roads as a courtesy bus conveyed us to China and Asia’s foremost media and journalist school. The more distance we covered away from the airport toward the university, the more I was charmed by the complexity of the road network: underpasses here, flyovers there; endless road safety rails that would long have been vandalized were it in Nairobi; service roads aplenty, name it? 

Something else struck me – the absence of pedestrians on the airport highway! Wasn’t this the capital of the world’s most populous nation? Hadn’t I read that Beijing itself was on course to top 20 million residents in short order? Where are the Chinese ‘commoners’, I mused!

The answer to my bewilderment over the absence of Chinese pedestrians would come to me powerfully once I settled down on campus and started venturing out. My very first encounter with throngs of Chinese was within days of arrival when colleagues from Tanzania, Belarus and Nigeria went to the Sanilitun diplomatic enclave to register our presence with our embassies. 

Two young Chinese students offered to help us reach our embassies. At the Communication University of China station on the Batong Line, we were baptized into the Beijing subway culture. Although we left for the diplomatic district mid afternoon that bright October day, we found the trains packed to the brim. Drive on Mbagathi Road in Nairobi any working day morning and what strikes you is the great number of manual laborers walking to Industrial Area work from Africa’s largest slum - Kibera. Aha, when you don’t see the Chinese on Beijing highways, they are commuting underground in their millions! 

It was evident that some of the Chinese passengers were encountering black people for the first time, judging from the glances and gazes we were attracting. I am not too sure if I am less conscious today than I was two years ago but it appears there are fewer darts directed at me nowadays when on board the subway. The number of Africans (or blacks for that matter) coming to Beijing has shot up over the past two years. New African students mingling with Chinese people must have helped break cultural barriers in a way that a television feature can never do.  

The Beijing subway is a study in convenience if one gets the hang of navigating it. Peak hours are to be avoided like the plague on account of the jam-packed crowding, and cramming in Beijing takes on a particularly buffeting quality! Five pm is particularly rough as commuters often stampede into the trains where one has to reckon with being squeezed as well as the resulting odors. This is when you come face to face with the foibles of living in a populous nation, notwithstanding the many positives of ‘strength in numbers’. Off peak however, the subway is less packed. Thus, unless absolutely necessary, many foreign students plan their sojourns away from universities between 9.00 am and 4.00 pm or any time after 7.30 pm. 

A journalist colleague has pointed out that the number of skyscrapers in Beijing could be as many as the number of high rise buildings in all the African cities together. This claim is rather hyperbolic. But the fact remains that locating a building on your own in Beijing is a complex affair on account of the many buildings in the sprawling city. Here, the subway comes in handy in that it serves as a location marker. I have found it convenient to be directed to any rendezvous by for instance arranging to meet a contact at the entrance/exit of a subway station. It’s not uncommon for one to pose: “well, this building is near which subway station?”

Quite apart from the fact that I get fewer quizzical looks when I use Beijing subways nowadays, I have gained other sociological-cum-psychological insights, albeit neophyte. As a rule of thumb, when a fellow Chinese subway commuter fixes me with a glance, I look back straight and he or she will surely avert his or her gaze. Better still, if someone looks at me a little bit intensely and we are within short distance, I will offer a greeting. Often ‘ni hao’ leads to some conversation; in once case, I have developed a long term relationship on the basis of a mere subway greeting. However, if I am not up to any of these strategies, I opt to whip out my phone and delve into any online engagement.

Chinese kids are particularly flummoxed when they meet an African, on the subway, in a public park or elsewhere. The trick, I have learned is to be playful with the kid and even make faces and the kid is your buddy (often the parent as well). I have also learned that older folk are likely to give you that quizzical look than are the middle aged Chinese – I propose the younger people have witnessed China’s opening up relative to older folk. I also now know that most of the subway commuters who seem so mesmerized by Africans would be new to Beijing, visiting from other Chinese provinces or the outskirts of the city where exposure to Africans is less. 

Just so that we could test our thesis that ‘Beijingers’ in the outer districts are less exposed to Africans, a colleague from Lesotho and I recently commuted to Tuqiao, the terminal of the Batong line in East Beijing. There we went into a restaurant and ordered a drink but the surprise written on ‘fuyuwuan’ the waiter’s face as well as other patrons at the bar served to confirm our suppositions.    
In a nutshell, the Beijing subway has countless tales to tell.

The author is a Kenyan journalist and PhD in communication candidate at Communication University of China. He is also a fellow of the China-Africa Reporting Project at University of the Witwatersrand, South Africa. Contact:                              

Monday, October 14, 2013

Chinese Aid: How Much?

We anticipate the publication this month of a new report from China on its foreign aid program. In the meantime, we have yet another media-report based study with outlandish numbers. In a recent op-ed in the Wall Street Journal researchers at Rand gave the highlights of their two year "research project" on "Chinese aid". I hoped this would not attract much attention, but people are starting to send it to me for comment ... so here goes.

There are so many things wrong in the WSJ op-ed that I hardly know where to begin. Most importantly, the study followed the same deeply flawed methodology (and indeed, used the data from) the notorious 2009 Congressional Research Service study that relied on a group of students at the NYU Warner School to collect media reports on any story of direct investment, mergers and acquisitions, trade finance, bank loans, equity funds, and so on, that appeared to have anything to do with the Chinese government. Adding all of this together, and without apparently investing much in checking the media reports for accuracy, or thinking much about why the purchase of an oil well should be counted as "aid", Rand has come up with some truly preposterous figures. According to Rand, China is budgeting more than twice as much on aid as on defense: $189 billion in 2011 alone. Can these researchers be serious?

This report was done, in part, for the US Department of Defense. I have to wonder what they will do with these ridiculous figures. Will DOD relax, because a generous China appears to be spreading aid around the world rather than building its military? Or will they demand a bigger share of our own aid budget in order to counter all of this nefarious "Chinese aid"?

For the record, China does have "official development assistance" that looks much like ours, as I've tried to explain across several chapters of The Dragon's Gift (apparently it's not in the library at Rand...). Below are the actual external assistance expenditure budgets for the last decade (source: China Statistical Yearbook). This includes grants and zero-interest loans, and any subsidy provided to make the relatively small set of concessional foreign aid loans [优惠贷款] provided by China Eximbank as one of its many loan instruments, concessional enough to qualify as official development assistance (ODA). In recent years, however, China Eximbank has apparently done all of the subsidies through its own profits, cross-subsidizing these loans and not drawing on the budget.

So in 2011, China allocated direct expenditures of about $2.5 billion on official aid (grants and zero-interest loans; see Table 1 below). These figures cover all the short term training courses, the youth volunteer program, military aid, some turn-key projects funded by grants and zero-interest loans (like stadiums, hospitals, schools, agro-technical demonstration centers, government buildings) but does not include the concessional loans. According to official figures from the State Council, between 1960 and the end of 2009, "China had provided a total of 256.29 billion yuan ($37.7 billion) in aid to foreign countries, including 106.2 billion yuan ($15.6 billion) in grants, 76.54 billion yuan ($11.3 billion) in interest-free loans and 73.55 billion yuan ($10.8 billion) in concessional loans" [exchange rate is for 2009]." 

Concessional foreign aid loans have been growing rapidly. However, in 2011, by my estimates, China Eximbank committed no more than $8 billion in concessional foreign aid loans, and disbursed much less . (We'll see how close I was when the official figures are released). This would mean at most, a total of $10.5 billion in official development aid commitments in 2011, not $189 billion. Preferential export credits are not official development aid, and would be additional to this, but they are unlikely to be higher than $8 billion in 2011. Finally, most of China Eximbank's export credits -- the bulk of their funding flows -- are not subsidized and not concessional.

For more on this, see The Dragon's Gift, my book on Chinese aid, or two papers I wrote in 2011: "Aid with Chinese Characteristics" and "Chinese Development Aid to Africa: What Where Why and How Much?".

Table 1: China's External Assistance Expenditures, Annual (billion)
(exchange rate is the IMF annual rate) 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
RMB   4.6   4.7   5.0   5.2   6.1   7.4   8.2  11.2  12.6    13.3   13.6  16.0
US$        .55   .57   .60   .63   .73   .91 1.03  1.47  1.87  1.95   2.00  2.46

Friday, October 11, 2013

The Dragon's Gift: Translated into Complex Chinese

I am pleased to announce that The Dragon's Gift has now been translated into complex Chinese and published in Taiwan (it was published in a simplified Chinese translation in 2012 with the Chinese Academy of Social Sciences).

Looks like the publishers in Taiwan did a much better job with the cover than CASS (below). It actually looks like something someone might pick up. On the other hand, they took some liberties with the title. Guess I don't get to approve those changes...

Here are links to the book on the website of Eslite and Hope it will be available in Hong Kong, too.

Cover of the simplified Chinese translation.
Thanks to Jyhjong Hwang for tracking down the links.

Thursday, October 10, 2013

Vulnerable Chinese Employers? New Ghana Research

Fascinating new fieldwork research based on approximately 100 interviews with small-scale Chinese trading companies and their Ghanaian employees: "The Vulnerable Other -- Distorted Equity in Chinese-Ghanaian Employment Relations," by Karsten Giese and Alena Theil.

From the abstract: "Central to the frictions of mutual equity expectations is the feeling of existential vulnerability that -- although particular for each group -- is shared by both Chinese migrant employers taking high financial risks in an unfamiliar and potentially hostile environment and their local employees recruited almost exclusively from economically marginalized groups."

Available in a free version online from Ethnic and Racial Studies 2012: 1-20. Thanks to Karsten Giese for the link.

Saturday, September 28, 2013

Chinese Investment in Africa: How Much?

How much has China invested in Africa? I just received a slightly breathless invitation to an event to be held at the Ritz-Carlton in Beijing, which led off with this statement:  "China's investment in Africa has increased a staggering 30-fold since 2005, with 2,000 Chinese firms now present in 50 African countries." 


Let's look first at the math. Here are the annual official figures for Chinese investment in Africa from MOFCOM:

Chinese FDI Flows to Africa (US$ million)

2005   2006   2007   2008   2009   2010   2011   2012
  392     520   1574   5491   1439   2112   3173   2520

Source: MOFCOM. This data has problems, as I've noted here before, although many of these problems are also shared by other countries' official FDI data,  And the leap from $392 million to $2520 million is not "a staggering 30 fold" increase, but a factor of 6.

Let's look at accumulated FDI figures:

Chinese FDI Stock in Africa (US$ billion)

2005   2006   2007   2008   2009   2010   2011   2012
1.60    2.56    4.46    7.80    9.33   13.04  16.24  21.23

Source: MOFCOM. The figure for 2012 is higher by a factor of 13, compared with 2005.

The most recent white paper on China-Africa Trade and Economic Cooperation noted that between 2009 to 2012, China's direct investment in Africa grew at an annual rate of 20.5%. This is a brisk clip, but I'm not sure I'd call it a "staggering" rate.  

How many Chinese companies are active in Africa? The figure on 2000 firms in 50 African countries comes from China's Ministry of Commerce. More precise numbers that I have from MOFCOM state that 2372 investments have gone through the required approvals for Africa, as of March 2013. Some firms will have multiple projects. On the other hand, it probably doesn't include a number of small enterprises that fly under the radar -- including all the Chinese shops -- so the true number of "firms" is undoubtedly higher.

Tuesday, September 24, 2013

China and the DR Congo

Jacob Kushner, a young journalist with a grant from the Pulitzer Center, has produced a new e-book on China and the Congo, which can be downloaded on Kindle for just $1.99. Viewing his creative effort is well worth the small expense. Kushner traveled to the DRC, interviewing Chinese managers, Congolese officials, visiting the Sicomines project, and immersing himself in a challenging environment. While as journalism, this isn't the detailed look at China and the DRC that scholars like Johanna Jansson have produced, it is a fascinating "new age of journalism" multi-media production. (Look past the catchy title: Kushner might have more usefully put "Congo Plan" in quotation marks, as he ends up doubting that there is a plan.) The talented Mr. Kushner combines short videos, excellent photographs, and traditional narrative to produce a book that is far more of an experience than simply a read. If this is the future of journalism as reflected in books, I'm looking forward to it.

Monday, September 23, 2013

China Africa Ec. and Trade Coop. White Paper 2013

Source: State Council, "China Africa Ec. and Trade Coop. 2013"
The Chinese State Council has published the new China-Africa Economic and Trade Cooperation White Paper (2013): click here. (hat/tip to Prof. Zhang Haisen).

While in China at the World Economic Forum/Dalian a couple of weeks ago, I heard that a new white paper on China's foreign aid will be published soon, probably in October.

While only one foreign aid white paper has been published so far, these overview reports on China-Africa trade and economic cooperation have been published annually since 2010, and are one of the signs of a new transparency in Beijing.  

Some of the highlights of this report:
  • "In 2012, the total volume of China-Africa trade reached US$198.49 billion, a year-on-year growth of 19.3%. Of this, US$85.319 billion consisted of China's exports to Africa, up 16.7%, and US$113.171 billion was contributed by China's imports from Africa, up 21.4%."
  • "From 2000 to 2012, the proportion of China-Africa trade volume as a part of China's total foreign trade volume increased from 2.23% to 5.13%." This shows that although China looms large for Africa, Africa is still a tiny part of China's overall trade.
  • "In 2012, the proportion of mechanical and electrical products as a part of China's total commodity exports to Africa reached 45.9%." A lot of these are vehicles, generators, telecoms and factory machinery.
  • Cumulative Chinese FDI to Africa now amounts to US$21 billion (by official figures). Of this, manufacturing investment is at US$3.43 billion.
  • China Africa Development Fund has "invested US$1.806 billion for 53 projects". So far, only one is in agriculture.
  • China's agricultural exports to Africa are now at US$2.49 billion, having increased 57.6% since 2009. Yes, China exports food to Africa, Africa exports mainly industrial inputs like rubber, cotton, sisal, along with oil palm, sesame, cocoa, and peanuts to China. 
  • "In 2012, Chinese enterprises completed construction contracts worth US$40.83 billion in Africa." As I have been arguing, this is a huge and under-appreciated sector of commercial interest for the Chinese.
  • "From 2010 to May 2012, China approved concessional loans worth a total of US$11.3 billion for 92 African projects." This includes preferential export buyer's credits, and foreign aid concessional loans. It is in fulfillment of the 2009 pledge of $10 billion over 3 years. All of these loan commitments would have come through China's Export Import Bank. This comes to about US$4.7 billion per year.

Thursday, September 19, 2013

Chinese energy companies go global ... in the US

Chinese companies are big investors today -- not only in Africa, but in developed economies like the US and Canada, where they compete for engineering projects, real estate deals, and acquisitions of companies that have the competitive technology and marketing know-how that they lack. A new article in the Beijing Axis's China Analysis by Daniel Galvez, analyzes this outward investment. For those interested in comparisons with Chinese engagement in Africa, skip down past the luxury real estate deals to the "energy infrastructure" section, which describes the ways in which Chinese companies are engaging in the US energy sector. 

Chinese banks are playing a big role here, just as in Africa:
  • In April, it was reported that Industrial & Commercial Bank of China (ICBC), China’s largest bank by market value, agreed to help finance plans for the USD 25 billion LNG export terminal in British Columbia, set to be among the 10 largest refineries in the world.  
  • In September 2012, Seattle-based Summit Power Group LLC announced that Sinopec Engineering will manage the construction of a critical portion of the Texas Clean Energy Project, a planned power-generating facility near Odessa, Texas. The facility will be funded by China Exim Bank, and is in line to receive USD 450 million in US federal funding.
See more at:

Monday, September 9, 2013

Jo'burg: Chinese shops move out to the suburbs

All photos: Yoon Jung Park
China in Africa: The Real Story is pleased to welcome this guest post from Dr. Yoon Jung Park, sociologist and author of the acclaimed A Matter of Honour: Being Chinese in South Africa and a number of other studies on Chinese immigrants in Africa. She writes:

I was recently in Johannesburg and managed to spend part of my last day there at the China Discount Shopping Mall. While there are dozens of wholesale/distribution centers around Johannesburg, most are south of the city center, off the main highway towards Soweto … in an area that was reclaimed from the mine dumps that had been there for at least two or three decades. This one, however, is different in at least two ways: (1) it is located in the northern suburbs – typically whiter and wealthier, and (2) it is a retail shopping center… or at least a “wholesale prices to the public” kind of place.

It is also, in my view, an indication of some shifts … a sign of greater economic integration of the Chinese migrant community, certainly a sign of Chinese migrant “filling in the gaps” opportunism and risk-taking business behaviour, as well as a sign that the Chinese are looking to broaden their customer base and bringing the products closer to the people in the ‘burbs.
The consumer's choices...
The China Discount Shopping Mall has basically replaced the owners and installed new management and new shops in an existing mall, which likely suffered from the recent economic challenges. While I didn’t have enough time to do any real research, I did manage to chat with several of the new shop managers – amongst them mainland Chinese (recently arrived) and Taiwanese (20 years resident in South Africa), Pakistanis, and an Ethiopian. There were many clothing shops selling popular fashions, but also shops selling party supplies, beads, housewares, and curtaining. They even had a dragon-shaped kiddies’ jumping castle! They also have a website (, but it seems to be a work in progress. 

As I was doing some research for my book project, I also learned that this sort of management takeover and auction purchasing of major shopping malls has occurred elsewhere in South Africa. “Rivonia Square” including the formerly exclusive “The Cloisters”, in a different part of the northern suburbs of Johannesburg, has recently been purchased by a Chinese migrant and is now called “Rivonia-Oriental City” ; they’re in the midst of trying to convince some of the food outlets and chain stores to stay in place as they attempt to attract higher-end Chinese retailers. Perhaps of greater significance, both the former “Highgate Shopping Mall” just outside Soweto and the former “Wheel Shopping Mall” in Durban are now part of the China Mall group owned and operated by Sino-African Property (Pty). Both are located in more economically marginal areas of the two cities and had recently suffered a serious downturn in foot traffic. 

The acquisition of these two shopping centres add hundreds of shops to the existing China Mall-JHB, which already had over 450 shops, a 1000 square meter food court and over 1000 parking bays! According to their website ( this makes them the “biggest Chinese products market” in South Africa and perhaps on the continent.

Several restaurants from Cyrildene’s Chinatown (also in Johannesburg) have also expanded over the past couple years, opening up second “branches” in Rivonia. My friend and former research collaborator, Anna Chen, surmised that the rationale was two-fold: (1) restaurant owners wanted to capture the wealthier white South African suburban diner population and (2) they wanted more space to be able to open up private dining rooms for larger parties of their Chinese regulars. 

Because of growing crime in Cyrildene (increasing numbers of luxury cars were followed home from Cyrildene and people were carjacked and/or robbed as they pulled into their driveways and homes), these moves have proved to be a boon for restaurant owners, as increasing numbers of Chinese patrons now dine only at the Rivonia restaurants. On the evening that I was at the Rivonia branch of Northern Foods (a favorite), the restaurant was fairly quiet, but it was also quite early… by the time we were leaving, the place was packed.
I can’t say the same about the Chinese shopping experience … there were no huge crowds at the China Discount Shopping Mall on the Sunday that I was there… and the survival of this mall (and the others) will depend in large part on the health of the South African economy, which continues to be in the doldrums.

So… Chinese traders, having started out peddling wares in the streets of downtown Johannesburg and fighting with the black South African street hawkers, moved into wholesale supplying thousands of retailers from across the country and the southern Africa region, appear to be moving into retail again, albeit at a very different level. This is a phenomenon worth watching.

Friday, September 6, 2013

Guest Post: Visiting the Chinese-financed Zongo II Dam

Waterfall Zongo on the River Inkisi
Zongo Waterfall, Inkisi River. photo: Oldrich Neumayer
This guest post comes to us from Antoine Lokongo, a Ph.D. student studying international politics at Peking University. In August 2012, Antoine visited Sinohydro's Zongo II dam project in the Democratic Republic of the Congo. His report provides a useful lens into Sino-African relations.

As part of my field research, it was of great importance to me to visit some Chinese projects undertaken in my country, the Democratic Republic of Congo (DRC). I visited all such projects in and around the capital Kinshasa, including the expansion of the bridge over the Basoko River project, the reconstruction of Boulevard Lumumba, from Limete up to the International Ndjili Airport, the widening of Ndjili Airport’s runaway project and so on. But above all, spending five days in Zongo, the site of the construction of Zongo II Hydropower project over the Inkisi River waterfalls, living and working together with the Chinese there, was the most interesting activity of my field research. 

Zongo is a beautiful place on the bank of the Congo River in the Western Lower Congo Province of the DRC. Its topography very much resembles that of China’s Yunnan Province (which makes Chinese immediately feel at home). Here, the Congo River, which constitutes an artificial border between the DRC and the Republic of Congo-Brazzaville, is squeezed by rocky mountains, making the deepest river in the world coil like a big snake among those mountains.

Now, the inhabitants of Zongo’s hitherto quiet mountains and valleys are woken up by the sound of the Chinese hammer. From dawn to dusk, hammer beats echo here in these mountains and valleys. The hardworking and industrious Chinese people who have been building dams for thousands of years, have come to the Inkisi River to build a hydroelectric dam called Zongo II (during colonial times, the Belgians already built a first dam, Zongo I, over the Inkisi River to provide Kinshasa with electricity but had always postponed the construction of another dam over the Inkisi River).

Wanting to know whether or not Congolese workers were absorbing Chinese people’s hard-working and organizational culture, I joined different teams on different days and worked with them on site (manual labour like mixing cement with sand, digging trenches to canalize rain water and so on). Although Congolese workers were skilled and knew what they were doing (especially electricians), they were constantly complaining. The culture of complaining in Africa stems from the harsh colonial experience, I guess, but Chinese should not become the new target in this very region of Lower Congo where so many Chinese and Congolese died of slave labour, forced to break the rocks with hammers, to build King Leopold of Belgium’s first railway in Congo, from Kinshasa to the port of Matadi.

"Why don’t we have shoes and uniforms, the same like Chinese workers?"
"Why have they not yet paid us our wages on time?"
"Why don’t they pay us $5 an hour but less?"

These are some of the questions Congolese workers fired at me, “one of them, who could speak Chinese”, as they put it.

I put those questions to a certain Mr. Li Gang, in charge of human resources, who was tirelessly addressing all the questions raised by the Congolese workers to ensure good relations between Chinese and Congolese workers. He told me that he had already many times and repeatedly explained to the Congolese workers that a cargo of new boots and uniforms had arrived at the port of Matadi, but the goods had not yet been delivered to the Zongo due to the slow customs clearance of goods at the port facilities. About pay delay, he explained: “Congolese workers usually get their wages on the 4th of each month. Today is the 6th of August and unfortunately they have not yet been paid. They will definitely get paid tomorrow. This postponement was due to the fact that our financial manager fell ill and went to Kinshasa for treatment."

Mr. Li Gang confirmed that unskilled Congolese workers (jobbers) are paid $2 to $3 a day, but highly skilled Congolese workers are paid $8 per day. “This is very fair,” he said.

The Zongo II Hydropower project, is being jointly built by Sinohydro (China) and Societe Nationale d'Electricite or SNEL (Democratic Republic of Congo). Neither partner is the "boss". SNEL has provided manpower; so has Sinohydro. But of course Sinohydro is injecting more money, expertise and equipment in the project. When the dam is completed, Sinohydro will get more out of the sale of electricty (entitlement is to each according to his contribution). After Sinohydro recovers its money, it will hand over the dam and the management of it to the Congolese government and will have nothing to do with it anymore unless Kinshasa solicits Sinohydro's assistance.

As a reminder, after recovering its investment over five years, Sinohydro handed back to Congo the Kinshasa-Matadi Highway it built, as commissioned by the Congolese government (Matadi is the Congolese port on the bank of Atlantic Ocean in the West). That is what the Chinese are doing all over Africa, and I think it is a good thing that does not leave African countries in debt. Of course due to cultural differences, there were a lot of misunderstandings. I particularly witnessed two negative incidents. The first one involved a Chinese worker. One afternoon, I saw a number of Congolese workers just standing there, chatting, chatting instead of working. This made the Chinese supervisor very angry and he slapped one of the Congolese in the face. 

I mediated between the two. I said to the Chinese supervisor that it would be better to report the matter to the office and the office will decide to sack inefficient Congolese workers. But he should not hit people! A second incident involved a Congolese worker who forged the signature of a Chinese manager, ticked more hours he did not work for in order to get more money. That is a crime! I told the Congolese workers to learn from the Chinese culture of working hard and abandon the habit of corruption.

But at end, the two sides got used to each other. Although they still ate separately, used separate showers and latrines, I could see Chinese and Congolese workers getting on well after all, playing football together on the sandy bank of the Congolese river after work. Local women were employed as cleaners and cooks.

The DRC is still very underdeveloped, but I think for both the Chinese people and Congolese people, this represents a great opportunity. Of course, some labour problems are bound to occur, but this a universal problem, that also occurs in American and European projects sites in Africa. As China begins to transfer its new technologies and expertise to Africa, practical solutions to some of these problems and issues will be found.