Chinese Merchantilism and The Yellow Man's Burden

It seems that the Chinese are discovering the trials and tribulations that go with Global Capitalism. The worst part of business is dealing with people and the Chinese are learning that making money the old-fashioned, merchantilist way isn't good enough anymore. Not even in the third world. This article in the Telegraph illustrates the problem:

Africa discovers dark side of Chinese master

By Colin Freeman in Chambishi, Sunday Telegraph
Last Updated: 1:05am GMT 04/02/2007

The smooth red carpet rolled out across Africa last week for Hu Jintao, the Chinese president, did not quite reach the gates of Zambia's Chambishi copper mine.

His plans to make an official visit yesterday to the plant, which re-opened under Chinese state ownership eight years ago, fell victim to a hitch he rarely encounters at home: the not-so-grateful worker.

Tipped off that miners were threatening protests about poor pay and conditions, Mr Hu changed his schedule, leaving the podium - specially built for the occasion - ungraced with his presence. The miners, who lost 51 colleagues in an explosion at a subsidiary plant two years ago, were a rare dissenting voice on Mr Hu's 12-day, eight-nation tour of Africa, which took in Cameroon, Liberia and Sudan last week and continues to Namibia, South Africa, Mozambique and the Seychelles.

Otherwise, it was choreographed all too smoothly: five-star hotels sealed off to accommodate his vast retinue, surreal "press briefings" at which no questions were permitted, and state functions to which awkward guests like Zambia's opposition parties, who back the miners' grievances, were not invited.

The VIP treatment was not surprising, however, given his country's rapidly-expanding new role in Africa as an investor, trader and aid donor. As well as an army of trade delegates signing business deals by the hundred, Mr Hu came with £2.7 billion to spend in aid and unconditional loans, cash pledged when he entertained 43 African leaders in Beijing last November. Like the Europeans who scrambled for Africa in the 19th and early 20th centuries, his motives are far from altruistic: Beijing wants vast quantities of Zambia's copper, along with Angola's oil, Gabon's timber and Zimbabwe's platinum for its own massive economic expansion, which it hopes will turn it into a new superpower.

Yet to a growing number of African governments - especially the more corrupt and undemocratic ones - Mr Hu represents a much more promising saviour than George W Bush, Tony Blair or U2's Bono. Thanks to his country's long-standing "mutual non-interference policy", Chinese aid and investment deals come on a "no-strings" basis, free of high-minded lectures or conditions about how the cash should be spent.

However, the enthusiasm of Africa's ruling elites for a non-Western benefactor is not shared by the miners of Chambishi township, whose Chinese masters arrived after the mine had lain shut for more than a decade. The sprawling plant is now decked in Maoist-style slogans urging workers to make "vigorous efforts to make the company prosperous", yet the way it is run is capitalism at its most raw.

As well as the mine's questionable safety record, workers' benefits have been slashed, unions discouraged and employees are paid as little as £53 a month, despite rising copper prices.

One miner - who would not give his name for fear of losing his job - told The Sunday Telegraph: "We are glad that the Chinese re-opened the mine, as unemployment here was very high and there were problems with theft and drunkenness.

"But they are difficult to work for. Safety is still poor even after the explosion that killed my friends, and when we ask for more money, they threaten to sack us. I would prefer to work for white managers - they are better educated and they understand what a Zambian needs to live on."

A particular grievance among the miners is that they no longer have the generous cradle-to-the-grave benefits they enjoyed when the copper mines were in state hands.

Today, Chambishi's roads are muddy and potholed, its menfolk spend much of their spare time getting drunk in local shebeens, and mine-sponsored soccer teams that once made the Copper Belt region a talent pool for the country's national team are defunct.

"They have created employment but they should improve the social conditions," said Isaac Lumba, 32, one of a group of miners drinking cartons of strong maize beer outside the Chember Grocery store, a small shack among Chambishi township's rundown, single-storey cottages. "If they are taking our copper they should give something back to the community."

The poor conditions in the Chinese mine were highlighted in a Christian Aid report released last week. It said that while other foreign mine operators, including Swiss and Indian firms, were often slipshod too, they provided at least some social benefits, sponsoring anti-malaria programmes and football teams. The report also described how two miners were shot and injured during a wages protest outside the Chinese managers' compound last year, either by Chinese-hired security guards or by Zambian police. The shooting, it said, "confirmed in the popular imagination the idea that Chinese bosses were uniquely brutal and exploitative, and that the Zambian state's relationship to them was too close".

Fears about the Chinese way of doing business are not just confined to the Copper Belt. In Zambia's capital, Lusaka, traders and manufacturers say the flood of cheap Chinese goods into their markets has made it all but impossible to earn a living. It is a complaint repeated in marketplaces in nearly every African country that has done a trade-for-aid deal.

Zambia, however, is unusual in Africa in that the Chinese presence has become a major political issue. Last October, Michael Sata's opposition Patriotic Front party nearly unseated Levy Mwanawasa, the Zambian president, after campaigning on a populist anti-Chinese ticket, benefiting partly from resentment over conditions in the mines.

Guy Scott, the Patriotic Front general secretary, believes Beijing already wields unhealthy influence over African governments, effectively turning whichever party is in power into a client faction. "They are out to colonise Africa economically," he said.

But it is easy to blame the Chinese for problems that have more to do with the former British colony's longer-term economic woes. Unemployment, for example, is 50 per cent, and 85 per cent of Zambians live below the poverty line, a point not lost on Mr Mwanawasa, who insists Chinese investment offers a leg-up to prosperity after four decades of post-independence mediocrity.

In speeches last week designed to head off protests against Mr Hu's visit, he spoke scathingly of anti-Chinese riots that erupted after last year's elections. "The Chinese government has brought a lot of development to this country and these are the people you are demonstrating against?" he asked.

Despite the controversy, Chinese businessmen are flocking to Lusaka in such numbers that five months ago, the city opened its first Chinese-owned casino.

A Chinese-built five-star hotel is also going up in Livingstone, named after the British missionary who spearheaded the first great colonial venture here. It may be some time, however, before President Hu or any of his successors is accorded a similar honour.

We are witnessing a passing of the torch from the United States to China. China will learn the meaning of the old saying, "To whom much is given, much is expected." Let Africa become the "yellow man's burden."