The Indians are bad, but the Chinese are worse.

The NY times is doing a series on Chinese investment in Africa. I think that it’s an interesting read.

"We are back where we started. Sending raw materials out, bringing cheap manufactured goods in. This isn't progress. It is colonialism."

- WILFRED COLLINS WONANI, head of the Chamber of Commerce in Kabwe, Zambia, where a Chinese company once manufactured finished cloth but now exports only raw cotton.

http://www.nytimes.com/2007/08/21/world/africa/21zambia.html?th&emc=th

This topic has been gaining real estate in my sphere of reality over the last few years. First, I noticed a bit of if when I was in Ghana where a few Chinese were first heading into the country. Then when I was working in corporate social responsibility, the issue of Chinese companies in Africa was a hot topic. The concern was related to the emergence of Chinese companies in previously western dominated markets. Because Chinese companies do not have the social pressure to operate according social and environmental standards that were being demanded of western based companies, (think Talisman in Sudan – shareholders demanded their withdrawl and in comes a SINOPEC, a Chinese company. Is the situation better off?) there was a fear that the emergence of China was going to create a bit of a race to the bottom effectve where companies, in order to be competitive with the chinese, were going to not have a choice but to forgoe any investment in social and environmental iniviatives.

Here in Zambia, as you'll read in the NYT seires, the Chinese invasion has happened. They’re investing in mines, they’re giving development loans to the Zambian government ( just released $39M US for road construction), they’re opening up shops and importing goods. China has an insatiable appetite for natural resources, they’re looking for new trading partners and Africa is their answer.

I am of course perceived to be Chinese (from China) who is here to do business. This means that I’m constantly fighting the stereotype that comes with this. The reputation of the Chinese is sometimes good, and sometimes not so good. On one hand, I’ve never met so many people who are interested in learning Chinese, and wanting to go to China. On the other hand however, the Chinese have a poor reputation because of the poor working conditions in the mines and factories, (they really can’t seem to shake this can they?), for low wages, for not trying to understand the culture and the language and all of this culminates to a reputation that they have little respect for Zambians. Last year, during the election, the opposition party actually campaigned with quite an anti-chinese sentiment that promised that if they were elected into power, all of the Chinese would be kicked out of the country. While there are also a lot businesses in Zambia owned by Indians, and the Chinese are more recent additions and last week I read the quote that is the title of this post – ‘The Indians are Bad, but the Chinese are worse; – in an article on this exact topic published in the national newspaper, THE POST.

And so, with every stranger that I meet, I often find myself in a bit of an identity crisis because I only know Canada but I am often greeted and treated with an entire other set of baggage that I don’t and can’t relate to. And when this happens, I feel so much appreciation for the multi-culturalism of Canada.

Finally, the role of China in Africa touches upon the bigger question of foreign direct investment and its impact on broad based poverty reduction. My time in Zambia has blown open a door to the role of markets and the impacts and limitations that an underdeveloped/dysfunctional/inefficient economic system has on the poor. Through all of this, I have come see that trickle down benefits do occur, and have also come to see that perhaps FDI plays a bigger role in development than I had originally perceived. This is not to say that I think that it always happens and necessarily impacts the poor in the most beneficial way, but merely that I think that it does happen and that it does produce benefits like job creation, wealth generation opportunities, technology transfer, tax payments that can lead to investment in infrastructure (of course many of these are limited by the effectiveness of government policies) and these are all critical factors in the overall economic environment in which poor communities are trying to develop.

That’s about as far as my thoughts take me. Like the rest of development, the question of China in Africa sparks a greater flurry of questions; Questions like how can foreign direct investment be better structured to benefit the poor? How much control does the government actually have over foreign companies to ensure that that benefits do come through? What is the responsibility of a foreign company entering into a developing country? What mind set shifts need to happen with large multinational companies when they enter into developing countries and how can we get them to understand that they have to learn a new way of doing business? Is FDI really just another form of colonialism? Or is the presence of foreign companies actually even avoidable given the global trends of globalisation? Apart from investment how does Chinese development loans impact development activities? Will the fact that Zambia now has an alternative source of funding outside the traditional western based avenues of the IMF and World Bank, improve their ability to lead their own development?

Questions. So many questions, but that is development. That’s part of why I enjoy it.