China's Influence Now Extends From Australian Desert to Sahara to Amazonian Jungle and Beyond
Sunday September 2, 2007
By William Foreman,
By William Foreman,
KARRATHA, Australia (AP) -- For nearly three decades, Chinese peasants have left their villages for crowded dormitories and sweaty assembly lines, churning out goods for world markets. Now, China is turning the tables. Here in the Australian Outback, Shane Padley toils in the scorching heat, 2,000 miles from his home, to build an extension to a liquefied natural gas plant that feeds China's ravenous hunger for energy. At night, the 34-year-old carpenter sleeps in a tin dwelling known as a "donga," the size of a shipping container and divided into four rooms, each barely big enough for a bed. There are few other places for Padley to live in this boomtown. Duct-taped to the wall is a snapshot of the blonde girlfriend he left behind and worries he may lose. But, he says, "I can make nearly double what I'd be making back home in the Sydney area." The reason: China.
For years, China's booming economy touched daily life in the West most visibly through the "made-in-China" label on everything from clothes to computers. But now, economic growth is giving rise to something more that can't be measured just by widgets and gadgets -- a shift in China's balance of power with the rest of the world. China's reach now extends from the Australian desert through the Sahara to the Amazonian jungle -- and it's those regions supplying goods for China, not just the other way around. China has stepped up its political and diplomatic presence, most notably in Africa, where it is funneling billions of dollars in aid. And it is increasingly shaping the lifestyle of people around the world, as the United States did before it, right down to the Mandarin-language courses being taught in schools from Argentina to Virginia.
China, like the United States, is also learning that global power cuts both ways. The backlash over tainted toothpaste and toxic pet food has been severe, as has the criticism over China's support for regimes such Sudan's. To understand why China's influence is increasingly pushing past its borders, just do the math. When 1.3 billion people want something, the world feels it. And when those people in ever increasing numbers are joining a swelling middle class eager for a richer lifestyle, the world feels it even more.
If China's growth continues, its consumer market will be the world's second largest by 2015. The Chinese already eat 32 percent of the world's rice, build with 47 percent of its cement and smoke one out of every three cigarettes. China's desire for expensive hardwood to turn into top-quality floorboards for its luxury skyscrapers has penetrated deep into the Amazon jungle. For example, in the isolated community of Novo Progresso, or New Progress in Portuguese, one of the biggest sawmills was started by the mayor with financing from Chinese investors.China accounts for 30 percent of the wood exported from logging operations in remote towns across Brazil's rain forest, where trucks carry the finished product hundreds of miles along muddy roads to river ports, said Luiz Carlos Tremonte, who heads an influential wood industry association. Many Chinese purchasers now travel to Brazil to clinch deals, and are almost always accompanied at business meetings by friends or relatives of Chinese descent who live there.
"Ten years ago no one knew about China in Brazil; then the demand just exploded and they're buying a lot," Tremonte said. "This wood is great for floors, and they love it there." The Bovespa stock index in Brazil has climbed more than 300 percent since 2002, riding the China wave. China is buying coal mining equipment from Poland and drilling for oil and gas in Ethiopia and Nigeria. It has poured hundreds of millions of dollars into Zambia's copper industry. It is the world's biggest market for mobile phones, headed for 520 million handsets this year. The list goes on. Along with looking to other countries for goods for its people, China is also going far and wide in search of markets for its products.
In war-torn Liberia, where electricity is hard to come by, Chinese-made Tiger generators keep the local economy humming. Costlier Western brands, favored by aid agencies and diplomats, are beyond the reach of small business owners such as Mohammed Kiawu, 30, who runs a phone stall in the capital, Monrovia. A used Tiger generator costs around $50, he said over the steady beat of his generator. "But even $250 is not enough to buy a used American or European generator. They are not meant for people like myself."
The Chinese generators are more prone to break down, Kiawu said. When the starter cable snapped on one, he replaced it with twine. But by making items for ordinary people, he predicted, China "will take control of the heart of the common people of Africa soon." China is having to make up for decades of economic stagnation after the communist takeover in 1949.
When Chinese leader Deng Xiaoping began dabbling in economic reforms in 1978, farmers were scraping by. By 2005, income had increased sixfold after adjusting for inflation to $400 a year for those in the countryside and $1,275 for urban Chinese, according to China's National Bureau of Statistics. "The Chinese don't want war -- the Chinese just want to trade their way to power," said David Zweig, a professor at the Hong Kong University of Science and Technology. "In the past, if a state wanted to expand, it had to take territory. You don't need to grab colonies any more. You just need to have competitive goods to trade."
If China stays on the same economic track, it would become the world's largest economy in 2027, surpassing the United States, according to projections by Goldman, Sachs & Co., a Wall Street investment bank. And unlike Japan, which rose in the 1980s only to fade again, China still has a huge pool of workers to tap and an emerging middle class that is just starting to reach critical mass. Many development economists believe China still has 20 years of fairly high growth ahead. But the transition to a larger presence on the global stage comes with growing pains, for China and the rest of the world.
As Beijing plays an ever bigger role in the developing world, some Western countries fear it could undermine efforts to promote democracy. In its attempt to secure markets and win allies, China is stepping up development aid to Africa and Asia. Chinese President Hu Jintao pledged last year to double Chinese aid to Africa between 2006 and 2009, promising $3 billion in loans, $2 billion in export credits and a $5 billion fund to encourage Chinese investment in Africa. China has also promised Cambodia a $600 million aid package and agreed to loan $500 million to the Philippines for a rail project.
But China also extends aid to states such as Myanmar, Zimbabwe and Sudan whose human rights records have lost them the support of the West. Actress Mia Farrow has labeled next year's Beijing Olympics -- a point of pride for China -- the "genocide Olympics" because of China's support for Sudan, at a time when the West seeks to punish it for its military actions in Darfur. China buys two-thirds of Sudan's oil output. "In some ways, it will be integrating us into a new international order in which democracy as we've known it or the right to open organized political activity is no longer considered the norm," said James Mann, author of "The China Fantasy," a book about China and the West.
China is also facing some of the unease that powers before it have encountered. In Africa and Asia, some complain that massive China-funded infrastructure projects involve mostly Chinese workers and companies, rather than create jobs and wealth for the local population. And Moeletsi Mbeki, a political commentator and brother of South African President Thabo Mbeki, likens the trade of African resources for Chinese manufactured goods to former colonial arrangements. "This equation is not sustainable," Mbeki said at a recent meeting of the African Development Bank in Shanghai. "Africa needs to preserve its natural resources to use in the future for its own industrialization."
The backlash is also coming on the consumer front, with Chinese goods earning a dubious reputation for quality. In the United States, there is a furor over the standard of Chinese imports. In Bolivia, vendors peel off or paint over any indication that their wares were "Hecho en China," Spanish for "Made in China." A woman selling bicycles in El Alto, a poor city outside the capital, La Paz, insisted they were made in Japan, South Korea, Taiwan or even India. With some prodding, she acknowledged the truth. "They're all Chinese," she said, declining to give her name lest it hurt her business. "But if I say they're Chinese, they don't sell."
Even those who benefit from China's growth express some wariness. Aerospace giant Boeing expects China to be the largest market for commercial air travel outside the United States in the next 20 years, buying more than $100 billion worth of commercial aircraft, U.S. trade envoy Karan Bhatia said in a recent speech. "Right now, we're hiring every week," noted Connie Kelliher, a union leader. "Things couldn't be better." Yet Boeing workers remain wary of China's ambitions to build its own planes. next year China plans to test-fly a locally made midsize jet seating 78 to 85 passengers. It also has announced plans to roll out a 150-seat plane by 2020.
"It's kind of a double-edged sword," Kelliher said. "You want the business and we want to get the airplane sales to them, but there's the real concern of giving away so much technology that they start building their own." That's what happened to Western and Japanese automakers, which made inroads in the Chinese market only to see their designs copied and technologies stolen. Already, China's vehicle manufacturers are venturing overseas, exporting 325,000 units last year -- mostly low-priced trucks and buses to Asia, Africa and Latin America. "We're taking a bigger piece of the pie," said Yamilet Guevara, a sales manager for Cinascar Automotriz, which has opened 20 showrooms in Venezuela in the past 18 months, offering cars from six Chinese makers. "They ask by name now. It's no longer just the Chinese car. It's the Tiggo, the QQ."
China's biggest car company, Chery Automobile Co., just announced a deal with the Chrysler Group to jointly produce and export cars to Western Europe and the United States within 2 1/2 years. Given the speed of China's ascent, it's perhaps not surprising that China itself is trying to calm some of the fears. Its slogan for the Beijing Olympics: "Peacefully Rising China."
China's Massive Footprint on Africa Means Commerce, Wariness
Sunday September 2, 2007
By Heidi Vogt,
By Heidi Vogt,
DAKAR, Senegal (AP) -- Selling shoes in the sweaty afternoon air of a West African market, Ousman Ka owes his job to China -- or, more precisely, to Lu Hui, the wrinkle-faced Chinese man in the blue sweater vest sitting behind him. "Before I was out of work, for about five years. Now I get by," says Ka, 29, from behind the counter of his stall as he pulls out blue-sequined flats for a woman's inspection.
Nearly 4,000 miles away, in the copper mines of Zambia, it's a different story. Keith Mule, who maintains machinery at a Chinese-run mine, says he's making about half the salary of his counterparts at other mines in the area. Union heads say they have less negotiating power with his employer, a Chinese firm that's backed by the government. And dozens of workers died two years ago in an explosion at a nearby Chinese-owned mine. "I am not able to live comfortably," said Mule, 52, who is supporting two daughters and his sister's son. "We are just living by chance."
From market stalls to mines, China is everywhere in Africa these days. The continent is possibly the most visible example of how China -- in many ways a developing country itself -- is changing the rest of the developing world, faster than virtually anyone thought possible. Yet the China-Africa relationship comes with both significant promise and deep unease. On a continent long dominated by Western colonial powers, China offers hope and the economic beacon of a country that has itself grown at a startling rate. But there is also the fear that once again, a world power has come to cozy up to corrupt governments and rob Africa of its resources, leaving ordinary Africans worse off than ever.
"African nations that are enthusiastic about China's arrival on the continent may wind up to discover that they have allowed in a new colonial power with an Asian face," says Adama Gaye, the Senegalese author of "China-Africa: The Dragon and the Ostrich." Two-way trade between Africa and China surged 40 percent to $55.5 billion last year, up more than fivefold from 2000. That still lags behind trade between Africa and the U.S., which hit more than the $70 billion in 2006. But Beijing expects trade with Africa to reach $100 billion by 2020. Even air routes have begun to reflect the China boom. Planes head out from Beijing, Shanghai, Guangzhou and Hong Kong to more than 20 African cities at least once a week. By contrast, regular flights from the United States reach just eight African cities.
Much of the money is still tied to raw materials such as oil, metals, minerals and timber to feed China's vast economic machine. China -- the world's second-biggest consumer of oil after the U.S. -- buys two-thirds of Sudan's oil. It is also a major customer in Nigeria and Angola, with purchases expected to grow. Then there are the infrastructure projects to court resource-rich countries. China is rebuilding much of Angola's war-ruined infrastructure, lending millions to the oil-producing country. With financing from China, a Hong Kong firm is spending $300 million to rebuild an east-west railway destroyed during more than two decades of civil war. China is also funding roads, a cell phone network, water pipelines, and hospitals.
Chinese contractors started entering the Angolan market in 2004 and have begun to displace the Portuguese and South African firms that had dominated projects there, according to a report by South Africa's Center for Chinese Studies. Meanwhile, China's targets have grown beyond oil and coal. China's largest manufacturer of telecommunications equipment, Huawei Technologies Co., employs more than 2,500 people in more than 40 African countries. In 2006, Huawei reported contract sales of $2.1 billion in Africa. The company has won contracts in Africa with European mobile phone companies like France Telecom and African operators like Morocco Telecom. "I don't think it boils down to a raw commodity story. It's far bigger than that now," said Nicolas Pinaud, a Paris-based economist at the Organization for Economic Cooperation and Development who studies Asian investment in Africa.
The Chinese influx is trickling down to market stalls and mom-and-pop shops. There are now about 200 Chinese-run market stalls on Boulevard du General de Gaulle in Dakar, up from just a handful six years ago. Gaye, the author, jokes that the street should be renamed Boulevard de Chairman Mao Zedong, after the founder of China's ruling communist regime. The merchants provide not just jobs for those like Ka, but also cheap goods. At Lu's market stall, a middle-aged man inspects a pair of white plastic loafers and says that for him, it's all about price. He says he now gets shoes for about $2 instead of $2.50 -- a small but important difference given that he has six children to buy shoes for.
Yet the same Chinese business and cheap goods are harming the African economy elsewhere, perhaps most notably in the textile and mining industries of southern Africa. The Chinese have built textile factories in Lesotho, Zambia and Kenya, and in South Africa 60 percent of all textiles and 89 percent of clothes now come from China, according to the country's Textile Federation. But that influx of low-priced goods is putting thousands of workers in the South African textile industry out of jobs. South Africa's textile union threatened last year to boycott sellers of Chinese products, and quotas on Chinese goods have now been put into place.
China is also mining uranium in Niger, iron and steel in South Africa and nonferrous metals in Angola, among others. Its state-owned nonferrous metals company -- owner of the mine where Mule works -- has invested more than $300 million in Zambia and promised over $200 million more last year for a copper smelting facility. But with the Chinese mines have come complaints about low pay and unsafe working conditions. Coal miners in Zambia have gone on strike. Pay disputes are common and Chinese security guards have fired on protesters.
A 2005 copper mine explosion left 51 Zambian workers dead. Keith Mule was there."We were working and all we saw was the smoke ... I was one of the people who went there and found the bodies that were mangled and scattered all over," he said. Since then, he said, safety procedures have improved, but he still thinks they were still better off when his mine was owned by the Zambian government. At least the government used to give out decent bonuses and spoke the same language as the workers. Politicians have picked up on the anti-China sentiment. South African President Thabo Mbeki has complained publicly that China could end up assuming the role of Africa's former colonizers, raping the country of its raw materials for its own selfish gain. "They are not here to develop Zambia, they're here to develop China," one Zambian legislator, Guy Scott, has complained. When Chinese President Hu Jintao visited the continent earlier this year, he skipped a planned trip to Zambia's copper mining region over concerns about protests.
There has also been a backlash against Chinese oil firms, which are suffering attacks similar to those that have plagued U.S. and European multinationals on the continent for years. In Ethiopia in April, a rebel attack on a Chinese oil company compound left nine Chinese and 65 Ethiopians dead. China likes to portray its involvement in Africa as strictly business -- no one tells anyone else how to behave, and everyone makes money. But that policy of operating on purely business terms has raised questions about whether China will in fact hamper the progress of human rights in Africa.
For example, China is accused of protecting the brutal government of Sudan, its oil supplier, despite the killings in Darfur. The Chinese also helped construct a private palace for Zimbabwean President Robert Mugabe, who is ostracized by Western governments that accuse him of ruining his nation's economy and stifling democracy. The structure has a pagoda-style roof and is decorated with Chinese dragons. In the end, some Africa analysts say, the continent can benefit from the Chinese, but only if African countries can do what they did not with earlier powers -- band together to demand fair terms.
"Handled well, the Africans can extract a lot from this relationship," says Chris Alden, an international policy expert at the London School of Economics who has studied China-Africa relations since the early 90s. "Whether it's balancing the West against China or requiring the Chinese to hire more African laborers. ... They need to negotiate