Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Archive

Cheap goods flood emerging market

When Chinese companies flooded the Nigerian market with cheaper versions of the generators Rex Nwankwu once imported from Italy, he said his business was imperiled.

Now he's looking for Chinese suppliers, he said from a long line of visa applicants outside China's consulate in Nigeria's biggest city of Lagos.

"People would rather buy the cheap and inferior Chinese generators than buy one of my superior but more expensive Italian ones," Nwankwu said. "To remain in business I had to join the bandwagon to China."

China's growth has sparked a global race with the West for markets and industrial resources. Africa has become a frontier of opportunity for the world's most populous country and its fastest growing economy. That has meant opportunity, aid and even key diplomatic support - China is a veto-wielding U.N. Security Council member - to some governments shunned by the West. But questions have been raised about the benefits, and the West has been increasingly suspicious of China's interest and influence in Africa.

China says its efforts on the world's poorest continent bring "mutual benefit and common prosperity" to itself and African countries.

"Goods that are exported by China, inexpensive but good, have been welcomed by ordinary Africans," the Chinese Foreign Ministry said. "At the same time, the Chinese side has taken positive steps to make it more convenient to import more African goods into the Chinese market, doing such things as giving Africa's most undeveloped countries tax-free import treatment into China and investing in facilities in Africa."

In the past five years, China's trade with Africa has grown fourfold to $40-billion in 2005. Ahead of Foreign Minister Li Xhaozing's January African tour, China unveiled a new policy document indicating interest in Africa's oil and other mineral and forestry resources.

Li's trip came days after China's state-controlled oil company CNOOC said it had reached a deal to pay $2.3-billion for a 45 percent state in a Nigerian offshore oil field.

"Africa is abundant in natural resources, which are urgently needed for Chinese economic development," Chinese Assistant Foreign Minister Lu Guozheng said as his boss toured West Africa. He listed oil, forestry products and iron ore and other mineral resources.

"China's coming is changing the equations in our relations with the West, and we should make the most of it," said Peter Egom, an economist with government-run Nigerian Institute of International Affairs in Lagos. "It certainly improves our bargain."

Western economic, political and technological dominance in Africa from colonial times has failed to nourish development in the continent, Egom said, welcoming China as an alternative source of economic and political power.

Lagos hairdresser Fatima Ibrahim has no doubt the influx of Chinese goods have been beneficial. For years she could not afford a portable electricity generator in her beauty shop in the face of persistent power cuts by the woefully run Nigerian power company. Then the cheap Chinese brands arrived.

Able to stay open more now that she can power herself, her business has grown threefold and her profits have multiplied in two years.

"In that time I've bought two of the generators, at less than half the price of the European and Japanese models," 32-year-old Ibrahim said.

But across Africa there are deep concerns about the tradeoffs between quality and low cost.

Ugandan taxi driver Emmanuel Mwiine professes an aversion to Chinese products but concedes he is in a minority.

"Here you can buy a fake watch from China for around 40,000 Uganda shillings ($20). It looks great but then it breaks after a month," he said.

Ugandan Trade Minister Daudi Migereko said government concerns over Chinese products include poor quality and widespread counterfeiting, problems the National Bureau of Standards has been charged to eliminate.

In December, Nigerian officials took the more dramatic step of shutting a large shopping center set up by Chinese traders in the country's biggest city of Lagos. Customs officials who raided the site alleged it was a center for fake and substandard products.

The Chinese Foreign Ministry said it expected Chinese businesses in Africa to obey local laws and "be particular about quality."

In South Africa, industrialists and trade unions have been pressing for government action to curb the inflow of Chinese goods, particularly textiles, they say is undermining local industries and jobs.

Yet the lure of Chinese products remains strong in Africa, with Beijing lending a heavy diplomatic weight to China's economic expansion.

China built a railway to link Tanzania and Zambia and built stadiums in several countries as it tried to rival Western aid to Africa in the 1970s. But much of China's aid to Africa in recent years have been tied to business deals.

In Nigeria, the China National Petroleum Corporation as part of its bid for oil fields opted to take over and run an unprofitable state-owned refinery - and boost goodwill with the government.

China has shown a propensity for stepping in to deal with governments spurned by the West over human rights issues. Chinese companies moved in to run Sudan's oil industry when Western companies would not deal with Sudanese President Omar al-Bashir's government over accusations of widespread rights abuses.

China is also the strongest foreign ally of Zimbabwe, now treated as a pariah state under Robert Mugabe, also accused of rights abuses.

CHINA-AFRICA TRADE ON THE RISE

Africa has become a frontier of opportunity for expanding China in its search for new markets and industrial resources.

Percentage of merchandise traded (2004)

Imports from China:

Manufactured goods: 92.5%

Other: 7.5%

Exports to China:

Fuels and mining products: 78.7%

Other: 21.3%

Source: World Trade Organization

YOU MIGHT ALSO LIKE

Advertisement
Advertisement