Snapshot of a 19th century ethnic Chinese business in Zanzibar

If you have the chance to visit the palace museum Beit al-Sahel in  Zanzibar’s Stone Town, and are interested in the history of Sino-African relations, don’t miss a photo on the second floor. Amongst the 18th and 19th century weaponry and artworks on display, you will see this fantastic black and white photograph of a small grocery shop beside a dusty road in Stone Town from the days of the rule of the Sultans. Above the counter there is a sign on which grand Chinese black letters are written. In today’s Zanzibar, the signs put up by Chinese are written in English in red Latin letters. Now, they do no longer sell bananas and spices, but medical services such as acupuncture, although in the favelas of Angola’s capital Luanda and in other African countries, Chinese shop-owners may actually sell fruit and celery.

Waves of Chinese migration to African countries

This photo serves as a bridge through time, it sets imagination in motion and brings to mind the 17th century armada of Chinese officials, soldiers, scholars, and soldiers who stepped onto the shores of East Africa, under the leadership of that famed Muslim eunuch Zheng He. How many of them never went back to China, staying in Africa, to literally set up shop there, and slowly integrate with the local community. Since then there’s been a couple of waves of small-scale immigration from China to the African continent. Most waves were due to colonialist powers contracting Chinese laborers for what was to be short term projects. Many, however, stayed on. Not so much different from today’s Chinese construction workers who somehow manage to linger for years – or settle down – in Africa.

From the 1950s and onwards, Taiwan outsourced manufacturing to both apartheid South Africa, and to Mauritius where there already existed a sizable ethnic Chinese community.  In our time, the flow of migrants from the People’s Republic is picking up speed. There are no reliable statistics, but the number of Chinese now residing in Africa could be anywhere between 700, 000 and 1 million. Due to illegal immigration and the fact that many of the Chinese small traders spend only a couple of months in African countries every year, make it difficult to estimate with any certainty.

The promise of Chinese-led industrialization of Africa

According to the World Bank, economic growth for Africa is set to increase by 5.3 percent in 2011. To a large extent, this growth is due to trade with China, India, and other countries of the global South. The promise and magic of outsourcing of Asian industries to Africa looks good on paper. But will it materialize? Let’s hope so.

The economic and commercial counsellor at the Chinese embassy in Kampala, Zhou Xiaoming has argued that “Labor costs in China have been rising. This has increased the cost of manufacturing. We plan to relocate small, light industries to undeveloped countries where the cost of labor is low. The economic environment here is also good and competitive, which will allow to build business confidence.”

I am just back from Uganda where I conducted fieldwork on the extent and importance of East Asian traders, investors, and aid delivery. Even though the foreign aid arms of Japanese and Korean officialdom, JICA and KOICA, are doing important work in Uganda -it is China that really matters. And it is almost all about trade and loans, not grant aid. Investments from, and trade with, Japan and Korea are miniscule in comparison with the Chinese juggernaut. Last year, Chinese investments in the country amounted to $65 million. They are spread out across sectors, where agribusiness and mining are most important. In all, these Chinese money go into 33 projects. And the scene changes at high speed. In 2008, trade volume between Uganda and China was at $247 million , 2009 it was $251 million, and last year it rose to $284 million. The balance is in China’s favor, as it last year exported $258 million and imported  Ugandan goods to a value of mere $26 million. When I asked an aid officer with JICA if she knew of any Japanese investors in Uganda, she said they were very few. “There is this man who has been here for 40 years, running a textile mill. He was here even during dictator Idi Amin’s brutal regime, when almost all other foreign capitalist and merchants were thrown out. But he’s kind of special.”

Creating or competing for jobs?

Counsellor Zhou in Kampala explained that the “new” Chinese industries would create jobs for the local people and spur investments in Africa, creating a stable and sustainable economic growth.

A recent article by Angolan journalist, Rafael Marques de Morais (“The new imperialism: China in Angola, see http://bit.ly/etQuMr) convey a now familiar message about the growing pool of Chinese labor and merchants competing with the locals in the markets of jobs and goods. “The majority of Chinese workers in Angola are engaged in reconstruction projects, but many thousands have branched out and become real estate developers, retailers, photocopy shop owners, street hawkers, and masseurs.”

Well, will Chinese industries that go to Africa really create jobs? Needless to say, it is difficult for any state, including the Chinese, to promise job creation. Given the volatility of international markets, and the difficulties to prognosticate national and global macroeconomic conditions far ahead. Economic fundamentals rule. Not even the sorcerers and magicians of Chinese state capitalism can have the audience spell-bound for long. I sure hope that their efforts will materialize into serious job creation. They deserve a lot of praise if they succeed. If such promises are not delivered upon, however, they can easily be picked up by populist political parties in election campaigns and backfire. Especially if the trickle of illegal immigration leads to a situation where ever more ethnic Chinese shops and businesses out-compete locals in the market.