[Debate] African Labour and Chinese Dragons

[peter waterman]

 http://www.redpepper.org.uk/african-labour-and-the-chinese-dragon/

July 2012
African labour and the Chinese dragon Róisín Hinds reports from the Zambian
Copperbelt, a site of intense labour conflict linked to Chinese investment

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*A maintenance crew at work in a Zambian mine.* Photos: mm-j/Flickr

In the 2006 Zambian election, Michael Sata, leader of the opposition
Patriotic Front, embarked on an election campaign that raised eyebrows
across the continent. Taking to the stage at rallies in the capital,
Lusaka, and the mineral rich Copperbelt province, Sata tapped into what had
become the populist mood by berating foreign, in particular Chinese,
investors. 'Zambia has been mortgaged to China,' he said. 'These Chinese
are infesters, not investors'.

With significant mineral wealth, the central African state has long been a
destination for foreign direct investment (FDI). First, the British and
South Africans arrived to set up copper mines, which were nationalised soon
after independence but then privatised in the mid-1990s as a result of
'structural adjustment' programmes. Chinese firms have subsequently become
the major players in Zambia's mining industry, providing massive inward
investment and re-opening once defunct mines to feed China's industrial
boom.

Sata threatened to expel 'bogus' Chinese investors, and, after he met with
Taiwanese representatives in Malawi, the Chinese ambassador threatened to
pull all investments should he win. But Sata's message struck a chord with
the urban poor, who had seen little of the benefits of the post-2000
commodities boom, and blamed the Chinese for worsening labour conditions
and political corruption. In September 2011 Sata was elected president of
Zambia.

Reshaping the landscape

Events in Zambia, the third largest recipient of Chinese foreign direct
investment in Africa, provide one of the more pertinent examples of how
China is reshaping the political and economic landscape of Africa.
Sino-African engagement is one of the most significant developments on the
continent since the end of the cold war, and has prompted a flurry of
alarmist media reports and a growing body of academic literature. It is not
only the scale of engagement that is attracting attention but the speed
with which it has grown. In 1990 Chinese FDI into Africa stood at £30
million; by 2005 it had increased to £1 billion. In the decade to 2008,
China-Africa trade increased from £5 billion to £53 billion, averaging an
annual growth rate of 35 per cent.

For many African leaders, China's approach represents an opportunity to be
exploited for the good of all, providing much needed employment and
investment. The former Zambian commerce and trade minister, Felix Mutati,
says: 'The Chinese have the technology, the speed and they are
cost-effective. The UK finds it cost-effective to use the Chinese for
[construction], so why should we be left behind? We better fly with the
rest of the world.' There is, however, a substantial body of opinion
arguing that, as former South African president Thabo Mbeki warns, China's
interest in Africa's natural resources has become a 'new form of
neo-colonialist adventure' that is undermining strides toward democracy,
environmental standards and labour protection.

Historically, China's relationship with Africa has been shaped
predominantly by diplomatic imperatives. Emerging isolated from the Korean
war, China looked to Africa as a source of political support on the
international stage - its 1971 application for a United Nations seat was
successful due to African support. China's approach to Africa is now more
economically minded and informed by two principal goals. First, opening and
entering new markets abroad, and second, acquiring natural resources to
fuel its growing economy - many of the largest recipients of Chinese FDI
are countries of notable mineral wealth, such as South Africa, Sudan,
Zambia, Nigeria and the Democratic Republic of Congo.

In 2006 China produced an Africa-specific policy, in which it sought to
distinguish Chinese investors from other companies operating on African
soil on the basis of 'mutual benefit'. The policy emphasises a common
historical experience between the Chinese and African peoples as victims of
colonial oppression, and highlights the need for 'south-south' solidarity
in a shared quest for development. A key component of this is the principle
of 'non-interference'. China's economic cooperation comes, so it is said,
without conditions attached. When compared to western nations who
frequently tie aid and investment to explicit demands for reform, the
appeal of doing business with China becomes clear. The economist Jeffrey
Sachs describes China's strategy as 'pragmatic', saying 'it gives fewer
lectures and more practical help'.

Blind eye to abuses

Yet this has led to criticism from human rights organisations that China is
willing to turn a blind eye to abuses of power. There are accusations that
China fuels conflict and corruption, most notably in Sudan where it invests
heavily in the oil sector and sells arms to the Al-Bashir regime. In the
UN, China has also used its veto power to block sanctions against Sudan and
Zimbabwe.

Beijing's claims to political impartiality are very much open to question.
Many of the Chinese companies operating in Africa, particularly those in
the geo-strategically significant extractive industries, are state-owned
enterprises (SOE). As such they can, and often do, utilise the political
capital associated with state support. Non-SOEs can also access assistance
from the Chinese government. In 2005 alone the state-owned Exim Bank
distributed in excess of $15 billion to Chinese investors abroad. In
combination with a domestic political environment in which freedom of
expression is tightly controlled, this enables Chinese investors to bypass
some of the corporate social responsibility requirements, accounting
stipulations, and the risk of press exposure and brand damage that affect
other multinational investors.

Despite this, the union between state and corporate interests has not
always been harmonious. Faced with competition from other firms and
squeezed profits, many Chinese industrial managers in Africa have responded
by reducing wages, worsening working conditions and reducing safety and
environmental standards. The political disquiet to which this invariably
leads stands at odds with the long term diplomatic interests of the Chinese
state.

China in Zambia

Perhaps nowhere on the continent have such tensions been played out more
clearly than in Zambia. With significant mineral deposits, the central
African nation is an obvious focus for Chinese interest. As elsewhere, the
growth in investment has been startling. In 2000 Chinese FDI into Zambia
was £60 million. In the space of ten years it has increased to an estimated
£560 million. The Lusaka branch of the Bank of China has even begun
offering banking services in Chinese currency, a first for the continent.

While Chinese investment in Zambia targets various sectors, from
infrastructure to retail, the epicentre is the Chambishi region of the
Zambian Copperbelt. Once a defunct mining town, Chambishi is now home to
one of five official special economic zones that the Chinese government is
in the process of setting up in Africa - the others being in Mauritius,
Nigeria, Egypt and Ethiopia.

*Some of the Chinese bosses visit the site*

Here, as elsewhere, Chinese capital has created a great deal of new
employment. While other mining investors have downscaled their operations
during the global economic downturn, the Chinese presence has expanded.
Gerry Finnegan, former International Labour Organisation director for
Zambia, contends that this consistency has fostered some positive sentiment
toward Chinese investors: 'Whereas other investors sought copper for
international sale and were thus subject to fluctuations in demand, Chinese
investors primarily sold to China, where there is a constant demand to
sustain the growing domestic economy. The jobs stayed and people were
happy.'

Mining for China

Not everyone was happy though. Workers in Chinese-owned mines have gone on
strike numerous times, protesting against poor wages and working
conditions. Goodwell Kaluba, secretary general of the National Union of
Miners and Allied Workers, a union prominent in the Chinese-owned mines, is
critical of Chinese companies: 'Our colleagues the Chinese, they have some
flaws when it comes to safety. Some of the conditions are also horrible and
the remuneration is nothing to talk about.'

Older miners in Chambishi reminisce about the era of nationalisation. Until
the early 2000s ZCCM, the state mining company, provided schools, hospitals
and even sports clubs for workers. Chinese investors show little comparable
interest. Once-popular sporting facilities are decrepit, the roads are
deteriorating and access to healthcare is diminished. In the words of a
worker in the Chinese-owned Chambishi copper smelter: 'Things were good
before - the mines were government owned and they cared about their workers
and treated us well.' But all this has now changed: 'Things are different,
they're much worse. Now these people that come, these investors, they don't
care. It's like a worker who treats his tools badly, if he continues
eventually the tools will break - if these investors, these Chinese, if
they treat us workers badly, one day we will break too.'

In 2005 Chambishi experienced one of the worst industrial accidents in
Zambian history when an explosion at the mines' explosives factory killed
49 workers. It was largely attributed to declining safety standards. The
following year striking miners in the same location were shot at by Chinese
managers when they marched on the Chinese workers' compound. Six were
seriously injured. A similar incident occurred in 2010, when Chinese
managers shot and injured 11 protesting miners in Zambia's Southern
Province. In both cases prosecutions were not followed through, despite the
assailants being identified. Most recently, miners in Chambishi downed
tools on 7 October 2011, demanding a 100 per cent wage increase,
highlighting the growing impatience for better conditions following Sata's
election.

Will Sata tame the dragon?

It remains to be seen whether their expectations will be fulfilled. Since
the 2006 election the Patriotic Front's approach to Chinese investors has
been more moderate, and in the party's successful 2011 election campaign
the focus was more on corruption than Chinese investment specifically.
Speaking of foreign investors, Sata's approach was cautious yet welcoming:
'We need foreign investors because they provide jobs for our people. But
they must respect Zambian workers.' Tellingly, his first official
appointment at State House was with China's ambassador Zhou Yuxiao. At the
end of September the Chambishi mine announced employees would receive an
unprecedented 85 per cent pay increase, although workers remain cautious as
to whether this will be realised.

The rise of China has fostered a growing belief that African countries
should tie their fortunes to a Chinese future rather than a western past,
hoping that this future offers partnership rather than subjugation. The
early signs are mixed. From South Africa to Namibia, Tanzania to Zambia,
Chinese investment has led to strikes, protests and denunciation from trade
unionists. And it is here, in the agency of labour, that the future of
Sino-African relations will be played out.


-- 
*1.* Contribute to Journal Special on 'New Worker
Movements<http://www.interfacejournal.net/2011/06/call-for-papers-volume-4-issue-2-for-the-global-emancipation-of-labour-new-movements-and-struggles-around-work-workers-and-precarity/>
'!
*2. Blog:* http://www.unionbook.org/profile/peterwaterman
*3. EBook 2011, 'Under, Against, Beyond - Essays 1980s-
   1990s* s <http://www.into-ebooks.com/book/under-against-beyond/>
http://www.into-ebooks.com/book/under-against-beyond/
*4.* WorkingPaper *2012*: 'Emancipatory Labour
Studies'<http://www.iisg.nl/publications/respap49.pdf>
:
*5.* Draft EBook 2012: 'Recovering Internationalism - Essays 2000-10'
(draft):
     http://www.scribd.com/doc/82125289/ReCovIntComp-A-2
     http://www.scribd.com/doc/82129474/ReCovtIntComp-B-2
*6. *Essay 2012: 'The 2nd Coming of the World Federation of Trade
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