Friday, November 25, 2011

Pushback on China's Mercantilist Colonial Ambitions

China’s commitment to Zambia is substantial. It has invested around $2 billion in the country, mostly in copper mining projects. The metal is used mainly for electrical cabling, and China’s vast infrastructure programs have made it a voracious consumer of copper.

Under the MMD, Zambia went all-out to woo Chinese state enterprises and ease their access to the country’s wealth. Zambia is home to two of China’s six Special Economic Zones in Africa. Recently the capital, Lusaka, became the first African city to offer Chinese banking allowing the deposit and withdrawal of yuan.

While Banda and his predecessors did everything possible to make the Chinese welcome, ordinary Zambians have come to resent the competition from a flood of expatriates, many of whom compete directly with low-skilled local workers.
Now with a new government in power in Zambia, things are beginning to change:
The increased presence of Chinese small traders, vendors and truck drivers, who take jobs from locals has also stirred up resentment, and Sata has made it clear that under his leadership, the relationship will have to change. His first act of office after his election was to meet with the Chinese ambassador Zhou Yuxiao. The meeting was officially meant to clear the air clouded by electioneering rhetoric. But he also said the days of allowing unrestricted immigration were over.

“We welcome your investment, but as we welcome your investment, your investment should benefit Zambians and not the Chinese,” Sata told the ambassador, according to Reuters.

“It’s in law that all investors who are coming to Zambia should bring a limited number of expatriates whom they cannot find in Zambia,” he added. “My party has taken concern at the unlimited number of people your investors are bringing to Zambia.”

Sata also briefly suspended copper exports. The ban was rescinded after a few days, but all copper exports will now be cleared by the country’s central bank to ensure that exporters aren’t misstating volumes and value. Government figures show that copper accounts for over 75 percent of the country’s export revenue, but less than 10 percent of tax revenue. Zambian unions have been quick out the gate since Sata’s election, by embarking on a series of strikes. About 2,000 workers at NFC Africa Mining, majority-owned by China Nonferrous Metals Mining Corporation, went on a strike early in October demanding higher wages. A week later, 500 miners walked off the job at the Sino Metals copper processing plant. More labor unrest is undoubtedly to follow as unions take advantage of the change in direction of the political winds.
The flood of expatriates is the really telling sign here. These are not merely necessary officers, engineers, and other technical personnel, but low paid, menial laborers that are being moved into the country in favor of using local labor. This is true colonialism. And these large number of expatriates also gives the Chinese an excuse to intervene militarily should things get too far out of hand.

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