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Chinese traders face hostile reception in Africa

MASERU — In the last decade,
Asian migrants have fanned out through southern Africa, opening shops in small
towns and rural backwaters. 
While consumers in countries
facing increasing economic hardships have come to depend on their low prices,
local shop owners complain they are being forced out of business, pressuring
governments to introduce restrictions on foreign traders. 
In Lesotho, a tiny
land-locked country facing high rates of poverty and unemployment, the
relatively recent appearance of thousands of foreign, mostly Chinese-owned,
businesses has generated resentment from local business owners, but little
government intervention.


Before the mid-1990s,
Makhabane Theko ran a successful retail business in Maseru but now leases his
building to the same Chinese traders who he says pushed him out of business.
“It’s difficult to compete
against the foreign investors, especially the Chinese. You sell 500g of sugar
for M8 and they will sell it for a price that is almost half that,” said.
Stories like Theko’s are
Although the exact number of
Chinese in Lesotho is unknown, estimates range between 10 000 and 20 000, or up
to one percent of Lesotho’s population of 1.8 million, according to a recent
report released by the Brenthurst Foundation.

“Business is good here,”
said one Chinese trader.
Unlike neighbouring South
Africa, which has a long history of Chinese migration and Chinese-run businesses,
Lesotho has traditionally been a country of out-migration and has little
experience with immigrants.
National legislation limits
ownership of small businesses to Basotho citizens, but the government has
largely turned a blind eye to corrupt practices allowing Chinese migrants to
purchase trading licenses or even national identity documents.
“Chinese are now selling makoenya
(fat cakes), loose cigarettes, even beer at retail prices, but their
business category forbids them from doing so,” said a street vendor who sells
cigarettes in Maseru.


Yoon Jung Park, coordinator
of the Chinese in Africa/Africans in China (CA/AC) International Research
Working Group, has conducted research on perceptions of Chinese in southern
She noted that small countries
with struggling economies like Lesotho are seeing funding from Western donors
dwindling; many may view Chinese investment as their next best hope.
This is reflected in the
lack of government action to regulate the
proliferation of small Chinese-run businesses.
“I think there’s a link
between official ties (with China) and the messages that get filtered down to
people, especially in these small countries that are desperate for foreign aid,
that the Chinese are the great hope and we need to be nice to them,” she said.

Many complain that the
Chinese add little to the local economy because they send all their money home,
but according to Park, few Chinese migrants in Lesotho send remittances home.
Instead, they spend their
first two or three years in the country repaying loans, and then they tend to
reinvest in their businesses.
Most also employ at least
one local to interact with customers.
They keep their prices as
low as possible by buying from other Chinese (often at a slight discount),
forming cooperatives to make bulk purchases and focusing on rapid turnover
rather than high profit margins.


Rumours that the more
unscrupulous also engage in under-handed practices like re-packaging expired
food and removing a few ounces from bags of flour and sugar before resealing
them may also be true in some cases, said Park.
“Profit margins are so
narrow, that they probably do resort to some of those things. And government in
Lesotho isn’t doing enough to prevent them,” she commented.
In the run-up to Lesotho’s
general elections in June, several political parties indicated their intention
to expel foreign traders from the country, but apart from several raids on
Chinese supermarkets said to be selling expired meat, no action has been taken
to prevent them from operating.


In Malawi, Chinese-owned
shops and restaurants have proliferated since the country established
diplomatic ties with China in 2007.
But the government was
recently prompted by bitter complaints from local business owners to introduce
legislation preventing foreign traders from operating outside of major cities.
The new law has mainly
targeted Chinese traders, many of whom are now being forced to close their
businesses in rural areas and to apply to the Ministry of Industry and Trade
for business licenses to operate in Lilongwe, Blantyre, Mzuzu or Zomba — the
country’s four major cities.

“They can operate in rural
areas when they are in production and big business, not doing petty trading,”
Malawi Minister of Industry and Trade John Bande said, adding that the
government would continue passing legislation that encouraged serious foreign investment “to the benefit of Malawians”.

But human rights groups have
described the legislation as xenophobic, and consumers like Arnold Mwenefumbo,
from Karonga District in northern Malawi, complain that forcing out the Chinese
traders will mean paying much higher prices for products sold by Malawians and
other African nations.


“(The Chinese) were also
employing our sons and daughters,” said Mwenefumbo.
Zambia’s open-door
investment policy has seen hundreds of Asian migrants setting up businesses in
the country in recent years, but locals employed by them complain about low
“Yes, they are giving us
jobs, but these are not jobs to help us (improve our lives). They are jobs to
help them make more money. I am paid 350 000 kwacha (M560) every month, and
what can you do with that amount?


“It is like my salary just
goes for transport to come here and go home,” said Melinda Daka, a shop worker
in a Chinese-owned business in Kamwala, Lusaka’s upmarket trading area.
“Zambian employers pay much
better, but they are very few, and they only employ very few people. So, there
is nothing we can do but work for these same people (foreigners).”
In July, the Zambian government
increased the monthly minimum wage for shop workers and other general workers,
from US$80 (M640) to US$220 
(M1 760), but employers are reluctant to pay the new salaries, saying they
could make the cost of business unsustainable.

But negative attitudes
toward Chinese traders are not uniform throughout the region. 
In countries such as South
Africa and Swaziland, where Chinese migrants arrived several generations ago
and now run businesses that fill gaps in the market without competing with
locals, relations have remained fairly good.
Park’s research in Zimbabwe
found that during that country’s severe economic crisis, consumers were
grateful to Chinese traders for getting goods
into the country when no one else could.


“They said that if it hadn’t
been for them, they wouldn’t have been able to send their kids to school with
basic supplies. They helped them survive the crisis,” she said.
However, in countries with
struggling economies, the arrival of large numbers of entrepreneurial Chinese
migrants combined with a lack of enforcement of laws and regulations have
fuelled tense relations with locals.
they know it’s not the fault of the Chinese. They respect them for their work
ethic, but they’re angry that the government is allowing them to do some of the
things they do,” said Park. —  Irin

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