Chinatowns in Africa

Satellite image of Africa, showing the ecological break that defines the sub-Saharan area (Photo credit: Wikipedia)

Written by Kaiyu Shao (1)

When riots broke out in Libya in February 2011, nearly 40,000 Chinese nationals were evacuated. The world was surprised to see so many Chinese doing business within this relatively small African country. Given the close economic relationship between China and Africa since the 1990s, one can, however, understand the central role ‘Chinatowns’ play in China’s existence in Africa. This discussion paper looks at Chinatowns in Africa, focusing on Namibia and South Africa as examples. It then introduces local attitudes towards Chinatowns, followed by a discussion of the factors that dictate their location.

Chinatowns in Africa

The rise of Chinatowns in Africa and the quick development in the Sino-African relationship could be seen as two sides of the same coin. Since the 1990s, Sino-African trade has enjoyed a rapid increase, both in absolute terms and in proportion. In 1990, Africa’s imports from China were valued at US$ 533 million, making up only 1.10% of its total imports. In 2009, this value reached US$ 30.4 billion, and composed 11.54% of Africa’s imports.(2) In this process, Chinatowns played two important roles. On one hand, the large scale of imports from China into African countries bred the development of Chinatowns, and provided the basis of their growth. On the other hand, it is the existence of these Chinese import-distribution centres that made further trade possible – by establishing relatively stable trade channels, while at the same time making Chinese products, as well as the Chinese image, familiar and acceptable to local citizens. It can thus be said that the existence and location of Chinatowns play an important role in Sino-Africa trade.

Though they vary in size, there are Chinatowns in almost every African country. Some are made up of only a few Chinese restaurants, while others contain several hundred businesses with thousands of Chinese merchants. Among these Chinatowns, South Africa and Namibia deserve special attention for the following reasons: South Africa, China’s biggest trading partner in Africa, possesses most of the Chinatowns on the continent. Namibia represents a new trend in Africa’s Chinatowns — not only do they provide products to the country itself, but they also possess international influence and have become ‘transfer stations’ for Chinese products as they ‘export’ the imported goods to their neighbouring state—Angola.

South Africa

South Africa was one of the earliest destinations of Chinese merchants in Africa, with the first Chinese traders opening their businesses as early as the 1990s. An investor from Hong Kong built the first Chinatown, which opened in 2001. Currently, Johannesburg alone is home to six Chinatowns, each possessing anything from dozens to several hundred booths or shops.

Euro crisis can build European identity

When European Union leaders meet in late June, they will weigh ideas that point to more political unity as a way to stem the euro crisis. Will Europeans give up more national sovereignty?

By the Monitor’s Editorial Board / June 5, 2012

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People in Pamplona protest May 31 against cutback plans by Spain’s government. The European Union urged Spain to come clean on how it plans to finance the overhaul of its banking sector.

Alvaro Barrientos/AP Photo Enlarge

Two years into its debt crisis, Europe has finally arrived at the nub of its problem: Will there ever be a common European identity?

The answer may start to become clear at a European Union summit June 28-29. Leaders will weigh proposals to create a binding political union as a way to prevent a collapse of the euro – as well as to prevent the effects to the world economy.

The euro crisis began because too many countries, such as Greece, acted on old national impulses under the umbrella of a single currency. They spent too much money – borrowed from other EU countries – with little regard for the new European rules on fiscal discipline.

Instead of one for all and all for one, it was more often simply all for one.

Financial markets finally gagged on the red ink and now insist that the euro’s 17 member states create a political authority as strong as their economic union.

Angela Merkel, the German chancellor, agrees, in large part to justify helping Europe’s wobbly banks. But this would mean that each nation would need to give up a lot more sovereignty, such as control over spending on health and education.

Europe, which invented the nation-state, is faced with diminishing it for the sake of an elusive United States of Europe. Up to now, however, much of the EU’s unity was based on a negative identity. In 1945, Europe didn’t want to be like its fascist past. Then during the cold war, it rallied around not being like the communist Soviet Union. And it has long tried not to be like America.

Why Philippines Stands Up to China

May 14, 2012 By James R. Holmes

The Philippines is hopelessly mismatched against China in pure military terms. But there are historical reasons why it won’t back down in the South China Sea.

Last month, I wrote a column for Global Times in which I observed that a dominant Chinese Navy lets China’s leadership deploy unarmed surveillance and law-enforcement vessels as it implements policy in the ongoing stand off at Scarborough Shoal. It can flourish a small, unprovocative seeming stick while holding the big stick – overwhelming naval firepower, and thus the option of escalating – in reserve.

That, I wrote, translates into “virtual coercion and deterrence” vis-à-vis lesser Asian powers. If weak states defy Beijing, they know what may come next. Global Times readers evidently interpreted this as my prophesying that Southeast Asian states will despair at the hopeless military mismatch in the South China Sea – and give in automatically and quickly during controversies like Scarborough Shoal.

Not so. Diplomacy and war are interactive enterprises. Both sides – not just the strong – get a vote. Manila refuses to vote Beijing’s way.

Military supremacy is no guarantee of victory in wartime, let alone in peacetime controversies. The strong boast advantages that bias the competition in their favor. But the weak still have options. Manila can hope to offset Beijing’s advantages, and it has every reason to try. Sounds familiar, doesn’t it? China has been the weaker belligerent in every armed clash since the 19th century Opium Wars. It nevertheless came out on top in the most important struggles.

That the weak can vanquish the strong is an idea with a long pedigree. Roman dictator Quintus Fabius fought Hannibal – one of history’s foremost masters of war – to a standstill precisely by refusing to fight a decisive battle. Demurring let Fabius – celebrated as “the Delayer” – marshal inexhaustible resources and manpower against Carthaginian invaders waging war on Rome’s turf.

Fabius bided his time until an opportune moment. Then he struck.

Similarly, sea power theorist Sir Julian Corbett advised naval commanders to wage “active defense” in unfavorable circumstances. Commanders of an outmatched fleet could play a Fabian waiting game, lurking near the stronger enemy fleet yet declining battle. In the meantime they could bring in reinforcements, seek alliances with friendly naval powers, or deploy various stratagems to wear down the enemy’s strength. Ultimately they might reverse the naval balance, letting them risk a sea fight – and win.

The age of irrational petro-exuberance

In our now half-decade-old era of regularized black swans, a few energy thinkers are cautioning against a bubble of wishful enthusiasm with regard to U.S. oil — a widely embraced paradigm shift that, if true, would disrupt geopolitics from here to the Middle East and beyond. A shift is afoot, but not a new world, says Dan Pickering, co-president of Tudor, Pickering, Holt, a Houston-based energy investment firm.

The new abundance model goes like this: Americans currently consume about 18.5 million barrels of oil a day, of which about 8.5 million barrels are imported. But in coming years, the U.S. will have access to another 10 million to 12 million barrels a day of supply collectively from U.S. shale oil, Canadian oil sands, deepwater Gulf of Mexico, and offshore Brazil. Add all that up, and account for dropping U.S. consumption, and not only do you get hemispheric self-sufficiency, but the U.S. overtaking Saudi Arabia and Russia as the biggest oil producer on the planet.

Pickering calls this calculus “a pipedream” founded on the extrapolation of data. Excluding Brazil, whose numbers he finds difficult to nail down, he is forecasting a lift in North American production of around 2.5 million barrels a day — up to 1.5 million barrels a day from shale oil, and another 1 million barrels a day from Canada. In 2020 and beyond, he says, the U.S. will still be importing some 6 million barrels a day from outside North America.

Technically, that does not make Pickering an outlier: The official U.S. Energy Information Administration also says the U.S. will remain a big importer into the next decade; the EIA import number overshadows Pickering’s — 7.5 million barrels of oil a day in 2020, or 40 percent of U.S. supply (see here, page 11).

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

October 20, 2011 | 1745 GMT

Editor’s Note: This is the first installment in a two-part series on the European banking crisis.

Related Links

• Special Series (Part 2): Looking Ahead in the European Banking Crisis
• Europe: The State of the Banking System
• Navigating the Eurozone Crisis

Europe faces a banking crisis it has not wanted to admit even exists.

The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, made her institution’s opinion on European banking known back in August when she prompted the European Union to engage in an immediate 200 billion-euro bank recapitalization effort. The response was broad-based derision from Europeans at the local, national and EU bureaucratic levels. The vehemence directed at Lagarde was particularly notable as Lagarde is certainly in a position to know what she was talking about: Until July 5, her title was not IMF chief, but French finance minister. She has seen the books, and the books are bad. Due to European inaction, the IMF on Oct. 18 raised its estimate for recapitalization needs from 200 billion euros to 300 billion euros ($274 billion to $410 billion).

Sovereign Debt: The Expected Problem

The collapse in early October of Franco-Belgian bank Dexia, a large Northern European institution whose demise necessitated a state rescue, shattered European confidence. Now, Europeans are discussing their banking sector. A meeting of eurozone ministers Oct. 21 is largely dedicated to the topic, as is the Oct. 23 summit of EU heads of government. Yet European governments continue to consider the banking sector largely only within the context of the ongoing sovereign debt crisis.

Rogue trader costs UBS $2 billion

By the CNN Wire Staff

September 16, 2011 — Updated 0133 GMT (0933 HKT)

UBS reports $2 billion trading loss

STORY HIGHLIGHTS

• UBS itself reported the rogue trader to police, officers say
• British media name the arrested man as Kweku Adoboli
• The loss could be caused by anything from fraud to “stupidity,” an expert says
• It would be among the largest losses in unauthorized trading

(CNN) — A rogue trader has cost UBS an estimated $2 billion, the Swiss banking giant announced Thursday, revealing what could be the third-largest loss of its kind in banking history.

A $2 billion rogue trading loss would be all but unprecedented, market analyst Ralph Silva told CNN.

“We have only had three or four other situations… in the billions, and that is exactly what happened,” he said.

Europe’s Economic Meltdown: How Did We Get Here?

A look back at the missteps and bailouts, in pictures.

BY CAMERON ABADI | JULY 20, 2011

On Thursday, July 21, European leaders will meet in Brussels for the latest attempt at quelling the continent’s worsening financial crisis. Unfortunately, what a year ago looked like a localized problem affecting a tiny share of the European Union economy has become a ubiquitous and omnipresent threat. Having tried austerity and monetary stimulus, chastisement and feigned confidence, European leaders are quickly approaching the end of their playbooks. And with Italy, one of the world’s largest economies, now teetering on the brink, it’s not at all clear this story will have a happy ending.

Above, at the Sodoma bar in central Reykjavik on April 25, 2009, a man relieves himself in a urinal plastered with photographs of Icelandic bankers who fled the country after the financial crash.

OLIVIER MORIN/AFP/Getty Images

Europe’s shift from financial concern to financial basket case began in an unlikely corner of the continent: Iceland. When world credit markets dried up in late 2008 after the collapse of Lehman Brothers investment bank,