Wednesday, April 18, 2012

Southern African Resistance to Chinese Traders

The Brenthurst Foundation in South Africa just published a fascinating study on the growing number of Chinese traders in South Africa, Lesotho, Botswana, Zambia and Angola. It confirms findings I encountered during travel to southern Africa in 2007 and subsequent following of press accounts from countries in southern Africa. The lead author of the study is Terence McNamee, Deputy Director of the Brenthurst Foundation.

The study concluded that Chinese traders have become fearful of the rising tide of resentment from Africans complicated by China's perceived dominance over many sectors of their economies. This was especially true in Lesotho, Angola and Zambia, and less so but increasingly in Botswana. Only in South Africa did traders express any sense of belonging or attachment to the country. Almost without exception, Chinese traders seal themselves in cocoons, completely cut off from local communities. The traders feel besieged by charges that they are using illicit means to rob and cheat Africans, rather than simply out-compete them. The survey painted a bleak picture of the status of Chinese traders within African societies.

The study found that only 20 percent of the Chinese traders had previous trading experience in China. Most of them saw the move to Africa as an opportunity to improve their economic status by owning a small business. In some countries, more than half of the traders come from Fujian Province, home to less that 3 percent of China's population.

The report suggested that the large number of Chinese migrants living in southern Africa and elsewhere could become China's Achilles Heel. The fear is there could be violence directed against the traders based on nationalist sentiments. Despite these problems, life in Africa still makes economic sense for Chinese traders, at least for now. Research shows that traders in Africa are making about three times what they might earn in China. At the same time, their presence in Africa is more precarious than in other parts of the world.

Click here to read the entire report.

One issue that needs more research is the reaction of African consumers to the Chinese traders. My experience is that the consumer, as opposed to the competing African trader, is more receptive to the Chinese presence. They are often seen as providing a product that is less expensive and of equivalent quality. I agree, however, that African traders and African companies that manufacture products that compete with Chinese products are deeply concerned with the Chinese trader presence.

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