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Chinese Show Business Acumen in Dar

Author:Polycarp Machira
Source:The Citizen
Source Date:2011-07-17
Publish Date:2011-07-19 03:22:52
Times Read:1818 reads
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China has climbed up the global economic ladder with shocking speed. This article offers a Tanzanian perspective on the "China model" of growth. It is interesting also in light of the early 2011 legislation that attempted to evict Chinese traders from a bustling market in Dar.

Via AllAfrica:

Dar es Salaam — The pace at which China hustled its climb up the global economic ladder has been a subject of many researches, reports and studies and even sheer perplexity. Over the past years, the world had been curious to figure out why and how a predominantly agrarian system just over the past few decades is now the second largest economy in the world.

In a study titled 'Why is China Growing So Fast' released a few years back, International Monetary Fund (IMF) researches attributed the so-called 'Chinese miracle' basically to the success of its 'economic reforms'--but then, many countries had been 'reforming' without getting results anywhere near the Asian giant's strides.

Since late 1970s, China "encouraged the formation of rural enterprises and private businesses, liberalised foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. By nearly all accounts, the strategy has worked spectacularly," said the IMF paper.

An average annual economic growth of over 10 per cent in subsequent years enabled the country to catch up with the 'Asian tigers'--Hong Kong, South Korea, Singapore and Taiwan--and, according to the study, "a few analysts are even predicting that the Chinese economy will be larger than that of the United States in about 20 years."

As it opened its doors to foreign investments, China also started making its own unprecedented investment forays into distant lands, striking deals with resources-rich countries in Africa and elsewhere to acquire essential raw materials. Its strategy has also been export-driven, marked with supply of relatively cheap manufactured goods world-over. In many developing countries, especially in Africa, its construction firms currently dominate in public works--anything from sports stadiums and elegant shopping malls to roads and high-rise office and apartment buildings.

Concurrent with this development is the record 'migration' of individual Chinese to seek fortunes in distant lands. Tanzania has been one of their favourite destinations. If you look round anytime in Dar es Salaam today, chances are you will spot a Chinese quietly roaming the city's streets, working as technician or construction labourer; running a Chinese eatery, shop or health clinic and even selling second-hand merchandise.

The official reports like the IMF paper aside, a quick appraisal of the activities of some of these resident Chinese may provide an insight into their aggressive entrepreneurial drive that might have contributed to their country's extraordinary economic growth. They seem to be shrewd and astute, and quick to take advantage of any business opportunities and willing to take risks.

Take the case of a group of Chinese involved in vegetable farming at Kitunda and Sitaki Shari suburbs in Ilala District in the outskirts of Dar es Salaam. Apparently, after arriving in the country, they quickly noticed that some Chinese restaurants were being set up in the city, but the locals had no thought of supplying them with the kind of vegetables the Chinese relish in their diets. As far as this paper could gather, the group then decided to lease plots of fertile lands in some suburbs and started farming themselves, much to the dismay of the locals.

"At first we found it strange seeing these people engaged in vegetable farming here, but nowadays we are used to see them do those kinds of activities," said Rashid Omar, a resident of Sitaki Shari who talked to The Citizen on Sunday.

Many Tanzanians normally--and wrongly-- assume that 'foreign investors' are well- moneyed or high-skilled experts hiring locals to do the menial and unskilled jobs. Politicians talk about so-called technology transfer from supposedly the rich to the poor countries. But this is not the case in most cases involving Chinese small-scale projects.

The five-hectare vegetable farm, for example, is used for growing certain species of Chinese vegetables.

The 'investors' only employ six local casual labourers who each earn a paltry Sh70, 000 monthly salary. Once harvested, the vegetables are transported to some Chinese restaurants that have recently mushroomed in the city, where there is ready market. The greens are well packaged and transported in a special van. The same Chinese do the bulk of hard labour at the farm themselves. A person close to the owner of the land said they had leased the area for a period of five years. Normally, they prefer to operate secretly, and barely eager to share their horticulture knowledge with the locals. Strangers are not allowed into their residential area in Segerea.

Helped by a Tanzanian interpreter, they are also reluctant to discuss anything that might expose or give an insight into their dealings. When The Citizen on Sunday visited the farm recently, a group of about five Chinese were busy harvesting vegetables. They declined to talk to this reporter at length, as they spoke neither Kiswahili nor English.

The local gardeners are not allowed to accompany their bosses to the market, or sell vegetables to any customer, whether local or Chinese--this is apparently to keep the matter under wraps.

One of the labourers who could not reveal his identity for fear of losing his job confided in this reporter, however, that one of them was recently sacked without pay for simply allowing in a Chinese stranger who had been visiting the farm to clip some vegetables. "We have been strictly instructed not to talk to anybody; our colleague, who is their translator, relayed the message to us on the very day one of us was dismissed," he said.

However, a majority of the Chinese mingle and interact freely with locals. This enables them to gather information they need to engage in informal or hidden small-scale business activities. In Tabata, along Umoja Road, also in Ilala District, a group of Chinese have rented a residential home and turned it into a factory that reportedly produces handbags and other leather products.

Meanwhile, the group at Kitunda and Sitaki Shari was also reported to be engaged in drilling wells-- a business said to be more lucrative. They are also said to be manufacturing mattresses within their residence in Segerea. Whether all these activities are legal and authorised by local and district authorities is another issue altogether.

There is also the common negative perception true or untrue that the Chinese are flooding the local market with inferior and counterfeit products. Some of them allegedly decided to move into city inner suburbs to create backyard factories for that purpose.

The locals' grudges and whining apart, the modus operandi of these small-scale Chinese entrepreneurs in Tanzania provides an insight into their aggressive approach to business and the willingness to take risks something that could help explain China's meteoritic rise to global economic prowess. Nobody knows for sure if the same unsubtle skills are applied by big Chinese corporations when it comes to global competition. In Tanzania, some people are wary of their approach as something detrimental to the nurturing of local small-scale entrepreneurship.

A majority of Chinese coming to the country are no longer trained professionals as was the case in the past, but small-scale adventurers trying to reap quick personal benefits. But as the IMF pointed out, economists ought to have many ways of explaining the 'Chinese model'.

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