Wednesday, June 26, 2013

China in Africa

A long article in StrategyPage discusses how China's investments in Africa might fail:

the problems?

Instead of hiring locals, they import their own workers, who live in segregated compounds.

Support of hated dictators (and folks will remember this long after they forgot what the development projects helped: The USA is learning this over and over again in the Middle East).

But mainly Chinese racism against Africans.

Neocolonialism, anyone?

The Chinese were mainly after raw materials, especially oil. A lot of that $13 billion was bribes for local officials. As usual, the average African was getting screwed by these deals. For example, a lot of the investment was for infrastructure (roads, bridges, structures), and a lot of those deals stipulated the use of Chinese labor for most of the work. There was never any intention of employing many Africans. The Chinese pay such low wages that they could afford to fly in Chinese for many jobs. China is also flooding African markets with inexpensive goods. Both of these tactics are hurting local businesses, and causing unrest among African business owners and workers. As a result, it's become common for opposition parties in Africa to accuse China of "neo-colonial exploitation." The accusation fits, and the Chinese will pay for it down the road, as will peacekeepers brought in to help clean up the mess.
Chinese merchants have been doing this to SE Asia for a couple hundred years: And even as late as World War II, their kids were called "Chinoys", and there is an Asian hospital in Manila that was started to treat them.

Of course, here in the Philippines, the rule is that foreigners are not allowed to own land or businesses, so usually the Chinese married Filipinas from rich families and put the businesses in their names (local custom allows women to run businesses). So most of the elite who run the country have Chinese ancestry (you can identify them by their paler complexion and round faces).

This intermarriage is not being done in Africa, so makes the Chinese more vulnerable to being ousted, similar to Idi Amin's deporting the many Indian merchants who ran the country, or Indonesia's ethnic cleansing of their Chinese community years ago under the guise of fighting a communist takeover.

As for Chinese exports: here in the Philippines, the exports have ruined a lot of local industries because of the Chinese low wages and their artificially low currancy. The good news is that they are cheap. The bad news is that they are poor quality. For example, our American plumbing fixtures bought 20 years ago still are okay but the ones we had installed in the new area of the house have deteriorated in two years, so we had to replace them from the hardware store in the mall (and have to hope that they are not counterfeit). Ditto for shoes, clothing, and (alas) drugs. Counterfeit and sub standard drugs (originating in China and India) kill hundreds of thousands every year, including Africa,  but when the US "green" types discuss the need to replace the expensive US/European brand names with "generics" for the HIV and other aid programs, this fact tends to be ignored.

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