How China slowly colonizing Zambian economy

Citizens wary of the dragon, Chinese President understands the fears

(Note to readers: In Chinese mythology, the dragon is the most powerful creature but can be benevolent. In imperial China, the Emperor used the dragon as a symbol of power and strength. This article is longer than usual as the topic to me, as an analytical patriot, is Zambia’s number one national interest issue for the short, medium and long terms and is likely to impact future generations and therefore requires urgent attention)

By Kalima Nkonde

Zambia has one of the longest relationship with China among African countries dating back to five months after independence in 1964 but it can also be used as a case study of what can go wrong if a country allows China uncontrolled access to its resources by over borrowing and by allowing Chinese nationals unfettered emigration.

To many intelligent observers, it is apparent that there is some subtle and informal colonization of the Zambian economy taking place. Unlike the formal colonization, which occurred through the Berlin Conference of 1884 when European imperialist bandits partitioned Africa in a formal agreement, China is doing it informally and deceptively; but the motivation is the same which is: access to raw materials, providing markets for their goods, providing a home for their citizens to settle through emigration, as well as a long term strategy for achieving geopolitical power and influence which China feels it deserves given its population. This strategy appears not to be so apparent to naïve African leaders or if they do, they decide to look the other way for a few pieces of silver and for short term personal gain instead of safeguarding future generations’ interests.

As the Nigerian Central Bank Governor, Lamido Sanusi openly admitted in his article in the London Financial Times in March, 2013, “China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism.”
In order to understand this article properly, one has to understand the variables at play in the Chinese economic colonization equation which form the basis of this analysis. The issues addressed involve the Chinese government with its State Owned Enterprises, the Chinese private sector (entrepreneurs) and Chinese ordinary citizens who include criminals involved in smuggling and illegal mining and logging of Mukula trees, who have migrated to Zambia in thousands and in a few years’ time, at the current rate, we will be talking of millions.

The article is meant to be an objective one in the sense that it is written by a person who has been exposed and understands what it takes to work, invest in and own a business in a foreign country. It was motivated by his patriotic duty as a Zambian, given his experience in the three foreign countries that he lived in for close to three decades, so as to highlight the fact that what is happening in Zambia does not happen in those countries or in most foreign countries.

It is meant as a wake up call to our leaders about the consequences of the current trajectory we are on as Zambians with regard to foreign investment and immigration. It is also meant to remind our Chinese friends and their Government, as well as other foreign investors that, they should not expect Zambia to allow them to do what themselves do not allow foreigners and foreign investors in their own countries. No investment is safe in the long term if the majority of citizens are unhappy.

The unprecedented and uncontrolled influx of the Chinese has escalated and accelerated since 2015 following the death of President Michael Sata. In the long term, it will threaten the sovereignty and security of the country. There is a misconception that the influx of Chinese in Zambia is Chinese government driven; this is far from the truth and does not tell the full story of Chinese emigration into Zambia.

Although there are, indeed Chinese immigrants that have come under the Chinese Government State enterprises as workers on construction projects and do not go back after their projects finish, there are thousands more who are coming on their own as contractors, traders, wholesalers, farmers, manufacturers, importers and exporters as well as criminals who want to seize the immense economic opportunities in Zambia and who see the country as heaven on earth which provides them with an escape route from poverty .This is the helicopter approach the article has taken.

Zambians’ economic grievances against the Chinese

The issue of slow colonization of Zambia is based on Zambians complaining about the current Government allowing the Chinese to do in Zambia what they themselves do not allow foreigners and foreign investors in their country. In Zambia today, critics have coined a phrase regarding the silent policy of the Zambian government in practice towards China: “China first and Zambia last”.
The concerns of Zambians about the Chinese influx and their negative impact are numerous but the major ones are over land, loss of employment opportunities, lawlessness, and corruption, crowding out Zambian SMEs by the Chinese, lack of benefits by ordinary Zambians from Chinese foreign direct investment, environment degradation and racism by Chinese nationals.

There is a serious under current and bitterness among Zambians that the Chinese and other foreigners are being allowed to acquire large tracts of land so easily in Zambia both on the primary and secondary markets. It appears that at the rate things are going there will be little land left for indigenous Zambians. This is a genuine concern and the earlier it is addressed the better. One does not have to carry out research about what is going on, as the evidence because it is so apparent.

The other concern is that the Chinese have started depriving Zambians jobs as they are engaged in activities which in normal societies should be reserved for locals. The Chinese are involved in street vending by selling second hand clothes, rearing Chickens, selling roasted maize on the streets and a myriad of other activities thereby competing with Zambians and depriving them of self employment opportunities. The recent threats by Zambians in Chifubu market in Ndola against Chinese trading in their markets and those in Kabwe’s Kasanda market, are cases in point. The situation has gone so much out of hand that the Minister of Justice, Given Lubinda had to complain to the new Chinese Ambassador, Mr. Li Jie when he paid him a courtesy call.
“Investors should come to provide jobs and build the economy beyond what the Zambian people can do, and not come to Zambia to sell chickens and roast maize. There is need to maintain quality economic existence in terms of goods and services between our two countries by encouraging genuine products t enhance cooperation,” Lubinda said, as quoted by Lusaka times.

Another major complaint by Zambians is that ordinary Zambians are having very limited benefit from the Chinese multi billion dollar projects. The current construction boom as a result of the so called “ massive infrastructure projects” taking place, which in normal circumstances should have a multiplier effect and be the driver of other economic activities thereby create jobs and earn revenue for government, is simply not happening.

The Chinese Government has invested heavily in Zambia through its State owned companies like Aviation Industry Corporation of China (AVIC), Sino Hydro Corporation, China Jiangxi International, China Henan Cooperation, China Sichuan and others but these companies do not form Joint Ventures with Zambian companies but they also come chockablock with skilled and unskilled Chinese workers. China on the other hand, does not allow multinationals to do that. It is mandatory in China to enter into Joint Venture with a State agency or local Chinese company if you are a multinational company.

According to the Harvard Business Review, China has other strict conditions apart from Joint Venture partnership, for Multinationals who want to invest in China such as the transfer of technology which is a must.
“The government is forcing multinational companies in several sectors to share their technologies with Chinese state-owned enterprises as a condition of operating in the country; just as securing natural resources often drives China’s foreign policy, shifting the origination of leading technologies to China is driving the country’s industrial policy”, The Magazine said in one of its editions.

The ideal situation, therefore, is that Zambia as a host country is supposed to benefit through gaining access to advanced technolo¬gy through skills transfer; creation of quality employment opportu¬nities; contribution to the tax revenues, promotion of local business¬es to supply inputs and/or render servic¬es needed by Chinese companies to support their opera¬tions; develop¬ment of technical and manage¬ri¬al talent. It very apparent that there is very little benefits accruing to Zambia in this regard. In addition, Chinese companies do not even comply with the current contractual requirement of sub contracting 20% of their work to Zambian companies and nobody is able to do anything about this non compliance.

The former Minister of foreign affairs, Harry Kalaba lamented this state of affairs in an interview with the MAST newspaper where he stated that the current administration is pro Chinese rather than pro Zambians.

“The initial PF that president Sata was spearheading was a pro-poor government [but] this one is a pro-Chinese government. It is more interested in ensuring that foreigners benefit more than the local people and that’s why you see that the levels of poverty keep [on] growing. But the leadership can’t see the levels of poverty growing because they are living in their own world and our people keep on struggling for the basic necessitates every day,” Kalaba lamented in an interview with the MAST.

Zambians are also concerned by the lawlessness of some the Chinese nationals and companies as they have no regard for Zambian laws. Zambia immigration laws, labour laws, environmental laws and tax laws are flouted with impunity by the Chinese and nothing happens to them. There is a perception among Zambians that our Government is captive to the Chinese nation due to the loans we have acquired and cannot, therefore, enforce anything against Chinese nationals or companies.

The Chinese nationals’ penchant for corruption is also another major concern among decent Zambians. Zambians are accusing the Chinese to have exported massive corruption to Zambia while they are stamping it out at home ruthlessly. Corruption has escalated in Zambia in the last couple of years to pandemic levels. The scourge, it is argued by some analysts, is positively correlated to Chinese immigration and escalated debt contraction by government. The flouting of laws alluded to earlier in the article, has also to do with the generally corrupt relationship that exists between some Zambians in authority from top to bottom. For example, how does one explain trading permits, work permits issued to some none deserving Chinese or the failure to comply with Zambia Environmental Agency directives by Chinese Multinationals?

There is also concern by Zambians that the country’s level of indebtedness to China is rather astronomical
. It is a basic rule in financial management that in order to reduce risk, one has to diversify one’s portfolio. Borrowing too much from one source is not smart economic management because sooner rather than later, one will be at the mess of the creditor and start dancing to their tune. Although there is excitement about the so called “ massive infrastructure development” and being in a hurry to develop, it is at the back of debt. The question is: at what price? The gut feeling of some Zambian intellectuals is that these Chinese loans are indirectly secured on our resources. When we fail to pay, the writer’s beloved, unspoiled fresh water Lake Bangweulu ,its white sandy beaches and its accompanying swamps may be taken over by future Chinese generations who will then exploit its tourism and agriculture potential by growing rice in the swamps to feed China.

Chinese President and government aware and understand the fears

As usual, there will be those Zambians who are benefitting from the status quo, who will be up in arms against this article because of ignorance as they are busy enjoying the gravy train with no time to read and research on what is going on the ground. The reality is that the problem does exist and even the Chinese Government at the highest level of the Presidency recognizes this. They are aware that Africans in general, and Zambians in particular have fears of economic colonization which is killing jobs and slowing down the country’s industrialization due to cheap Chinese imported goods and the structure of the infrastructure loan deals.

In 2013, the New York Times reported that Chinese President Xi Jin ping, while addressing a crowd in Dar –es- Salaam, Tanzania, admitted that his government would take corrective action regarding African continent’s complaints concerning the lop sided economic relationship. He promised aid, scholarships and technology transfers in an effort to counter those fears.
“China frankly faces up to the new circumstances and new problems in Sino-African relations, China have and will continue to work alongside African countries to take practical measures to appropriately solve problems in trade and economic cooperation so that African countries gain more from that cooperation. We will strengthen mutually beneficial cooperation with African countries in agricultural, manufacturing and other spheres, helping these countries convert their resource advantages into developmental advantages,” President Xi Jin ping said.

It is crystal cry that China is prepared to give a good deal to those countries that will put up a good case for their Citizens, but it will not do so on its own without individual African country lobbying and negotiating for the same. The onus is, therefore, on the Zambian government, to negotiate better deals for Zambians . Zambia should refuse some of the proposals which are not in national interest like those by the Octopus Chinese State owned company Aviation Industry Corporation of China (AVIC) which has spread its tentacles in most sectors of Zambian economy and being accused as having captured the Zambian State like the infamous Gupta family did in South Africa, until their recent downfall.

Chinese friction incidents in Zambia

There should be no pretence about the fact that the relationship between ordinary Zambian citizens and Chinese nationals is fraught with suspicions and mistrust in recent years unlike in the past. Zambians view Chinese as coming to take over their country. Zambians working for Chinese companies complain about low wages, poor working conditions of service, general mistreatment and racism. The cause of the friction is mainly due to the crash of two cultures, lack of political will to enforce Zambian laws and the arrogant attitude of Chinese due to what most refer to as suspected Capture of the Zambia.

In his well researched book, “China’s Second Continent-How a million migrants are building a new empire in Africa”, Howard French states in his interviews with Chinese settlers in Africa, that the racist feelings are so apparent in their mouths and minds. He states that the Chinese describe Africans as lazy, dishonest and stupid and unwilling to work hard for eventual reward.

In order to demonstrate that there is friction between Chinese and the Zambian community, there are a few incidents that come to mind which may only be the tip of the iceberg.

In 2005, 52 Zambian workers died at Chambeshi explosive factory due to lax safety practices by the Chinese company. In 2010, two Chinese managers were charged with attempted murder after they opened fire on protesting Zambian workers and were charged with attempted murder. It would interesting to know how such a case ended up.

In June, 2017, Zambia detained 31 Chinese on suspicion of illegal copper mining. The Chinese government bitterly protested about the arrest of their nationals.

“The government has always asked Chinese companies and citizens to respect the laws of the countries where they operate and does not shield illegal action… But China opposes selective law-enforcement actions against its citizens” China’s foreign ministry spokeswoman Hua Chunying at a news briefing.

This month, July, 2018, a 16 year old boy of Chambishi town ship was shot at by the Chinese nationals whilst collecting fire wood in the area of the Chinese owned Bolo Mine. Police reported that the ten Chinese who runs the Bolo Mine was arrested for causing bodily harm and 8 were released on police bond.

In December, 2017, in a daring and miscalculated move, Zambia Police recruited 8 Chinese as Officers in the Zambia Police Reserve wing and gave them ranks ranging from Assistant Police Commissioner to Superintendent. There was country wide uproar and the decision was “reversed”. The recruitment of police officers lent credence to Government critics who claim that the current Zambian government is captive and beholden to the Chinese.

Solutions and way forward

There is no denying the fact that Zambia needs Chinese trade and investment as the numbers do not lie. Zambia-China trade was last estimated at $2.6 billion in 2016, Chinese investment in Zambia is approximately $4billion; whereas Zambia is said to be indebted to China by a tune of $5billion.

China’s relationship with Zambia is very sound at government and ruling Party level but it is certainly not good at ordinary Zambian level as demonstrated in this article. The relationship is rather too lopsided at least in the short term. The benefits are not apparent to ordinary Zambians as it is not trickling down. The future does not look bright either, given the current uncontrolled influx of Chinese immigrants and taking over businesses, jobs, assets, left right and centre and virtually capturing the state.

The current situation is a ticking time bomb and good leadership is about anticipating problems and taking preemptive action in time. It is in both countries’ interests that solutions are found to the current problems. The steps outlined below could be a starting point.

First and foremost, Government should engage the Chinese government regarding the issues raised in this article and others so that Zambia’s relationship with China is properly recalibrated for long term sustainability. The Chinese Government needs to ensure that the behavior of their nationals whilst in Zambia is according to Zambian law and should not protect them once they fall foul of the law. In addition, they should facilitate repatriation of Chinese workers when their contracts of work expire. Also, Chinese nationals need to be told in no uncertain terms that they ought to respect their Zambian hosts if their security is to be guaranteed and they live in peaceful co-existence.

Secondly, one of the major problems we have is that we have acquired too much debt from the Chinese in a very short space of time. We should slow down or at least put a moratorium on Chinese debt contraction and stop accepting unsolicited projects from Chinese State owned companies. We need to dilute Chinese debt holdings by diversifying our debt portfolio ;better still Zambia should engage in aggressive domestic revenue mobilization by targeting multinationals including Chinese companies for tax collection as there is no doubt, there is massive tax evasion.

Thirdly, we should start screening and scrutinizing the type of private investors from China and only accept quality investor who will meet certain conditions such as joint venture with Zambians, giving us access to advanced technolo¬gy through skills transfer; create quality employment opportu¬nities; contribute to tax revenues, promotion of local business¬es to supply inputs and/or render services and develop¬ technical and manage¬ri¬al talent.
Fourthly, we need to enforce our laws without fear or favour and clampdown corruption. The Government should enforce and monitor the infrastructure contracts with the Chinese which stipulate that they subcontract 20% of their work to Zambians. To illustrate the positive impact of enforcing such policy and for simplicity, if Zambia has $5billion debt for infrastructure projects from China, 20% will be $1billion (K10 billion) cash flowing in the economy for Zambian contractors and multiplier effects on the economy will be massive.

Fifthly, as part of their role as providers of checks and balances in a multi party democracy and as governments in waiting, Opposition Parties should cease this as an opportunity to put pressure on government to ensure that Zambia and Zambians interests are safeguarded in their dealings with the Chinese. The issue of Chinese and the influx non value adding foreign migrants, can be a popular campaign issue among Zambians. The issue does touch on most of the problem areas that Zambia faces today like land, Jobs, debt, corruption, immigration and rule of law and any smart politician can make it as part his or her stump speeches.

The problem with our Opposition Parties is that there is more focused on fighting for their own jobs and getting power from the ruling Party as a sole objective rather than public service and public good. Instead of laser focusing on issues that can make them convince the electorate to enable them win power, they all want to be Presidents without clearly and unequivocally demonstrating what they will do differently especially with regard to revenue mobilization and job creation, which is the key to stop debt accumulation. The key issue should be to demonstrate to voters how Zambia can be self financing, stop borrowing and thereby bring back free education, give more subsidies to farmers like Americans and Europeans do and so on and so forth. No such strategies are communicated to voters. This partly explains the voter apathy and the lack of interest by independent Zambians who are normally objective and forms the majority of the voting block.

There is no doubt that China is contributing to Zambia’s development with regard to infrastructure projects in roads, bridges, airports, power, schools, hospitals but it should be recognized that China is not giving Zambia a free lunch and it is also benefiting from Zambia’s resources too. Inasmuch as Chinese trade and investment with Zambia is very important, the relationship needs to be properly recalibrated so that it is not only at political and government levels but also trickles down to ordinary Zambians and ordinary Chinese nationals. Zambians interests should come first and foremost. Zambia should avoid the master and servant relationship and go back to the colonial days.

The writer is a Chartered Accountant by profession and a financial management expert. He is an independent and non partisan commentator/analyst. He has lived in the diaspora in England, South Africa and Botswana for over 25 years.