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China's Trade in Africa Carries a Price Tag
News Type: Event — Seeded on Wed Aug 22, 2007 1:57 AM EDT
Article Source: The New York Timesadvertisement
Manufacturing has suffered in Africa as cheap Chinese goods flood the market, eliminating needed jobs.
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3.9
{"commentId":966197,"authorDomain":"thedagda"}
Who is using who, and who will get hurt in the end?
{"commentId":966197,"threadId":"140832","contentId":"911741","authorDomain":"thedagda"}
#1 - Wed Aug 22, 2007 1:57 AM EDT{"commentId":966816,"authorDomain":"eriktheread"}
What is the meaning and purpose of this so called globalization? Each nation can only produce what it knows best. Denmark makes the butter and cheese, the US makes the bread, China makes the plate and Germany makes the knife and fork. Perfect.
Only, it doesn't quite work that way. Luxembourg wants to make the knives and Peru will have nothing of US bread, Nigeria can't aford the plates, and the Chinese don't eat cheese.
But the Cinese can make cheap t-shirts like no one else, so I guess that's what they'll do, and everybody else be damned. Actually they make quite a few of those t-shirts in Africa where labour costs are much lower than in China. Someone, somewhere is making a profit, you can be sure of that!
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#2 - Wed Aug 22, 2007 10:20 AM EDT{"commentId":968062,"authorDomain":"thedagda"}
I don't think so, Erik. Labour costs in China are still below Africa's for all but totally unskilled labour. A silkscreen operator, for instance, in Africa would need more to stay alive than a similar worker in China. How Africa does fit in to what you say is that the price of African cotton or finished cottonware for the T-shirts, to use your example, is being pulled down by the market (especially because such large-scale subsidized producers such as the United States dump excess production on the market). Because the African farmer receives less for his product that he would otherwise, he can contribute less to his own country's economy, and so African nations stay relatively poorer. Because the Chinese get their raw materials cheaper, they are able to keep their costs down and then undersell the competitor in Denmark, say.
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#3 - Wed Aug 22, 2007 4:39 PM EDT{"commentId":968369,"authorDomain":"eriktheread"}
Hmm, I have to check that about the wages. I was under the impression that places like former South-African homelands (Lesotho, is it?) were pretty cheap, but there may have been tax incentives involved.
The Danish company UFF and maybe others, too, have been dumping used clothes collected absolutely free in Scandinavia, but selling them for symbolic amounts in African countries. This was presented to us up here as a kind of foreign aid, people to people. It was an absolute scandal. Those collection containers were suddenly gone one night :-) This works precisely as you say, totally undermining local African textile workers, hand made textiles, tailors.
I understand that a lot of those Chinese companies bring their labour force along from China. Reminds me of the English bringing Indians to South-Africa and Tamils to Sri-Lanka.
{"commentId":968369,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
{"commentId":969008,"authorDomain":"thedagda"}
Lesotho has always been a separate country (Kingdom of the Sotho-speaking people is what it means, a British protectorate since about 1825), but you are right, it is poor and labour is relatively unskilled.
Regarding the used clothes or salaula as it called in Zambia, you are correct. Western Europeans and Americans donate cast off used clothing thinking that it will help some poor naked child who otherwise doesn't have a shirt or a pair of shorts. What actually happens is that it is shipped in containers to a warehouse in the African country, where local sellers buy up bundles of the clothes and sell the articles in open-air markets for as much as they can get. No one gets anything for free, except for the middlemen in your country, who get their product for free. As the article points out, most Zambian textile plants have been run out of business, and the same is likely true for nearby countries as well.
Regarding your last comment, you are spot on, Erik.
{"commentId":969008,"threadId":"140832","contentId":"911741","authorDomain":"thedagda"}
{"commentId":969100,"authorDomain":"eriktheread"}
Ah, our missionaries have been knitting mittens for Africa for centuries. Now my country, Norway, is using almost 1% of GNP on foreign aid. Like you say, no one can be against helping the needy, and I know the donations are not tied to strings about buying Norwegian products. Though we can easily afford it, I can't help feeling uneasy. There is hardly any public discussion here and never any news unless you go looking for it on the web. Just the usual "we're the best" message from the powers-that-be. Being ripped off, all right, no matter, but causing harm, that's unforgivable. Trawlers to Lake Victoria, anyone?
{"commentId":969100,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
- 1 vote
{"commentId":969688,"authorDomain":"eriktheread"}
It's a half hearted defense of the Chinese, but they don't behave much better at home. Raw, undiluted capitalism. Five thousand miners die annually, the WTO say some 600 000 die of polluted air and water. And the place really looks a mess. The tearing down and building new makes one wonder: "Was I really in this town before?" My memory must be failing.
{"commentId":969688,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
#4 - Thu Aug 23, 2007 10:58 AM EDT{"commentId":1011451,"authorDomain":"backroadsbubba"}
Yep, China's the neocolonialist; it plays a nefarious role in Sudan, too.
Would micro-loans help remedy the situation?
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#5 - Sun Sep 9, 2007 10:24 PM EDT{"commentId":1011501,"authorDomain":"thedagda"}
That's a good question. Basically, lots and lots of micro-loans could. Billions of dollars of loans, carefully structured to actually aid regular Africans and not pad the bank accounts of the corrupt elite, would work wonders. If 10 million people were each loaned $100 under terms that would make it easier for them to borrow, say $200, if they paid back the $100 on time, and $400 if they paid back the $200 on time, etc. and these loans were managed on a local basis so that Touré in Accra or Alleluia in Blantyre don't slip through the cracks and get in trouble that would prohibit them from making all their payments.
Lacking friends in the West, some African countries are turning to China, which pays not only in cash but in training African professionals.
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{"commentId":1011527,"authorDomain":"backroadsbubba"}
Reportedly, millions have benefited in Bangladesh. Correct you are about the money going directly to the people.
All in all, do you think China is a beneficial presence? If so, better deals could be struck that adds a bit on Africa's side of the deal.
Beijing's non-interference agreement in Sudan, though, is one nasty deal. Nasty business.
What do you think is the reason Africa lacks Western friends?
Incidentally, China is flooding Mexico with chilies, undercutting domestic production. I've read Egyptian textile workers are angry about the competition, too.
{"commentId":1011527,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
{"commentId":1011614,"authorDomain":"thedagda"}
Africa lacks Western friends for the same reason mooches lack friends. Toward the end of the 20th century, African governments found out they could mooch off the West and the West went along with it to keep the leaders after independence from giving advantage to the Soviets. But Africa also lacks friends because historically outsiders came to Africa to cheat and swindle Africans out of resources, slaves, land, etc. Who needs friends like those? You might want to mooch off such friends for as long as you can in order to "pay back" all the stuff their ancestors stole from you, if you were African. So the relationship had snags from the get-go, whereas the Chinese could basically start from scratch.
All in all, China's presence benefits China a lot, and it seems to me it's up to Africans to make sure they get as much benefit out of the relationship that they can.
I tell my son to learn Chinese, because his generation will all be working for them. By 2035 everyone will.
{"commentId":1011614,"threadId":"140832","contentId":"911741","authorDomain":"thedagda"}
{"commentId":1011641,"authorDomain":"backroadsbubba"}
No Dagda, they'll be working for Wal-Mart.
{"commentId":1011641,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
{"commentId":1011660,"authorDomain":"thedagda"}
Which will be owned by Chinese!
{"commentId":1011660,"threadId":"140832","contentId":"911741","authorDomain":"thedagda"}
{"commentId":1011709,"authorDomain":"backroadsbubba"}
Dagda, that gives rise to my personal recommendation on how the U.S. deals with its illegal immigrant problem. We need to dramatically boost fair trade within our own hemisphere. It would enhance the economies of our neighbors.
Eventually, China's workers will demand higher wages during the country's latest long march. I really can't see Beijing putting down something involving many millions. Ultimately, China will democratize. I think that could lead to economic convulsions all over, with higher prices being felt across the globe.
{"commentId":1011709,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
{"commentId":1011493,"authorDomain":"eriktheread"}
I'm all in favour of loans, though it seems those micro-loans are somewhat overrated. In this particular situation, China in Africa, I don't quite see the relevance to the situation described. In China I think it could be used to great effect, the Chinese are just learning about loans and the workings of a modern economy. International banks are being allowed in. But I doubt if the Chinese Communist party would permit micro loans, they'd lose control. Independent farmers investing in machinery, what's next!
{"commentId":1011493,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
#6 - Sun Sep 9, 2007 10:42 PM EDT{"commentId":1011545,"authorDomain":"backroadsbubba"}
Erik, they're saying micro loans have empowered millions of impoverished women. They're the ones with children. I'd say even if these loans are over-rated, millions of satisfied customers means it's worth a try elsewhere. Big aid packages to governments aren't working.
I thought everyone is playing the stock market in China. Well, quite a few. Hey, forget micro loans. Let's talk about unionizing the workers.
{"commentId":1011545,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
{"commentId":1011601,"authorDomain":"eriktheread"}
Hmm, I shouldn't have said that about micro loans, not because it is wrong, but because I can't recall why. About six months I listened to a radio talk where some of the basic tenets were being debunked. I vaguely recall it had to do with male members of the family taking the money and generally causing trouble. But my memory does not serve me today, sorry!
You must not forget that so many Chinese farmers have no access to stock trading. There seems to be no technology at all, just piles of broken TVs. Produce is carried on people's backs. But China is so big, what is a good observation one place may be completely wrong somewhere else. Even in cities the poverty is well hidden, shacks being surrounded by ordinary buildings, so you can drive right past and not see or notice.
A lot of China today is about the "internally displaced", construction workers so far away from their homes I wonder how they will ever get back.
{"commentId":1011601,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
#7 - Sun Sep 9, 2007 11:15 PM EDT{"commentId":1011647,"authorDomain":"backroadsbubba"}
Well, I could be wrong. The guy who pioneered the notion certainly got a Nobel Prize for it.
Yes, I've read that about the situation in China. I've also read that there's trouble brewing among the Uighur minority.
Before I forget, and before you leave, will you be working in China or merely enjoying an extended holiday?
{"commentId":1011647,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
{"commentId":1011662,"authorDomain":"thedagda"}
I remember much the same thing, Erik. It seems that some men were forcing the women to borrow money (because women were judged more credit-worthy; in that society women do most of the work, men drink coffee and smoke.) then taking it from them. At least that's what I remember hearing on the radio.
{"commentId":1011662,"threadId":"140832","contentId":"911741","authorDomain":"thedagda"}
{"commentId":1011675,"authorDomain":"eriktheread"}
I sure know about the prize, I am, after all, a Norwegian. He has been up here using his new clout.
I have some ideas about what I might do. They need English speakers for sure, and even my Norwegian-English is a whole lot better than nothing. I already own some real estate, I might expand on that if I can learn to trust those guys :-). Right now I am doing some language corrections. Chinese scientists are having trouble getting their stuff published because their English is so poor.
{"commentId":1011675,"threadId":"140832","contentId":"911741","authorDomain":"eriktheread"}
- 1 vote
{"commentId":1011715,"authorDomain":"backroadsbubba"}
Erik, that completely slipped my mind
The women gotta be empowered. It would resolve a great deal of militancy, in my opinion.
Too bad I don't know Chinese. I definitely know English.
{"commentId":1011715,"threadId":"140832","contentId":"911741","authorDomain":"backroadsbubba"}
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