News / Economy

Chinese Firms Find Troubles in Crisis-hit Sudan

Chinese vendors wait for customers inside their shop at a local market in Omdurman, Sudan, Jun. 6, 2013.
Chinese vendors wait for customers inside their shop at a local market in Omdurman, Sudan, Jun. 6, 2013.
Reuters
When Chinese clothing wholesaler Chan Cui Xiao signed a deal with a Sudanese businessman to export colorful bed sheets to the African country he was confident of making good money.
 
A few months later he is in serious financial trouble - he shipped his goods to Sudan but did got paid and has rushed to the country to try to track down his local business partner.
 
The Sudanese had sent him credit and bank financing letters, and as Chan had done business that way in Egypt and other Arab countries he thought it was safe to export his goods.
 
“I made a loss of $200,000 but have been unable to find the Sudanese guy. The phone number and address he gave me seem wrong,” said Chan, sitting in a stuffy clothing store run by a fellow Chinese in the town of Omdurman, north of Khartoum.
 
Chan is not alone in losing money. There are at least 10 Chinese clothing wholesalers in Omdurman's dusty fashion market who say they have not been paid by Sudanese partners. Some of them have come over from China to sell off their merchandise from stalls set up in front of the single-story white brick buildings that line the unpaved market street.
 
Others are busy filing legal suits, although a weak Sudanese legal system means they probably stand little chance of getting their money back, analysts say.
 
Sudan has been scrambling to contain an economic crisis since it lost the bulk of its oil production when South Sudan seceded in 2011. As oil revenues were the main source of budget income and of foreign exchange reserves needed to pay for imports, many Sudanese importers are now struggling to get their hands on dollars to pay foreign suppliers.
 
Financial losses cited by Chinese traders and businessmen raise concern about the African country's ability to revive its economy.
 
China is Sudan's main trading partner and its lifeline as Western firms have shunned the country since a U.S. trade embargo was introduced in 1997 over Sudan's human rights record. It bans firms operating in the United States from doing business with Sudan.
 
Chinese firms, undeterred by conflicts, corruption and galloping inflation in Sudan, are building transport and telecommunications infrastructure and supply the country with consumer staples from soap to power sockets to underwear and rice.
 
There is no sign yet that bigger Chinese companies are pulling out, but if financial problems continue to increase the risk of doing business, that could slow or even jeopardize Sudan's plan to attract more foreign investment to develop its mineral and agricultural resources and overcome international isolation.
 
Hotel Slump
 
At a high-level bilateral meeting in Beijing last month, state media from both countries praised the depth of ties.
 
But for many private Chinese entrepreneurs, most of whom came after the end of Sudan's civil war in 2005, Sudan's depleted finances are creating a difficult business environment.

“We hardly have any projects in Sudan anymore and are now moving staff to Kenya where business is much better,” said the head of a mid-sized private Chinese building company.

He asked not to be named as he fears problems with the Sudanese government, which still owes his company money for construction work for ministries in Khartoum over the past two years.
 
“We used to have 40 Chinese staff. Now we're just 10,” he said, sitting in his office in a large but mostly deserted building in southern Khartoum. “Sudan is no longer an important market for us.”
 
China, though, does have an interest in Sudan overcoming its economic crisis as it has investments in South Sudan's oil production, which has to be exported through Sudan.
 
Sudan resumed oil exports last month - after a 16-month shutdown due to a row with South Sudan over pipeline fees - with the sale of a cargo of oil produced by China National Petroleum Corp, which dominates the oil industry in both countries.
 
In January, China extended a $1.5 billion loan to Sudan via state-run China Development Bank to help shore up public finances and the Sudanese economy, which shrank 10 percent last year, according to World Bank data.
 
Chinese firms, especially state enterprises, still have a lot of business in Sudan, part of Beijing's strategic drive across Africa to secure resources for its vast economy. As well as oil, they have invested in farmland projects and are doing exploration work in the mining sector.
 
Sudan's state airport operator has just won a $700 million loan from China's state-run Export Import Bank to build a new airport in Khartoum - one of the largest industrial projects in the country in recent years.
 
Still, bilateral trade has been falling. China's exports and imports to and from Sudan, which totaled $11.5 billion in 2011, amounted to just $3.3 billion in the January-November period of 2012, according to official Chinese data.
 
The drop in oil trade accounted for much of that decline. But even while the oil industry has been shut down trade has continued to fall. In the first five months of this year, Chinese exports to Sudan fell eight percent from a year earlier to $1.7 billion, the data shows.
 
Hoteliers in Khartoum are feeling the impact from a drop in Chinese and other Asian business travelers.
 
Hotels were double- or even triple-booked from 2005 until 2011 when the economy was flush with oil revenues, sparking a building boom. Several new hotels have now opened but many are suffering in the downturn, exacerbated by the exit of most United Nations' staff and aid workers with southern secession.
 
“We used to have an occupancy rate of much more than 50 percent,” said Liu Sui Qin, owner of a hotel near the former U.N. headquarters in Khartoum. “Now it's 20 or 30 percent and prices for a single room have halved to around $40.”
 
Liu came to Sudan 13 years ago from Beijing with her husband who opened a Chinese orthopedic clinic, but she is now pessimistic about business prospects here.
 
“Maybe we'll wait one or two years. If things don't improve we'll go back to Beijing,” she said, playing with her daughter in the hotel lobby.
 
At least the hotel is still turning a small profit, in sharp contrast to the fashion traders trying to sell off shirts, trousers and bed sheets in Omdurman market.
 
“It was my biggest mistake coming to Sudan,” said Li Kong Kai, who is trying to sell bed sheets in the sweltering heat after her Sudanese partner failed to pay for an order she had already shipped to Khartoum. “I paid $95,000 for my wares and hope to recoup some losses and then go back home.”

You May Like

Conflicts Engulf Christians in the Middle East

Research finds an increase in faith-based hostilities, and Christians are facing persecution in a growing number of countries in the region More

Chinese Americans: Don’t Call Us 'Model Minority'

Label points to collective achievement, but some say it triggers resentment, unrealistic expectations More

Iran Bolsters Surveillance of Phones, Internet

Does increased monitoring suggest the government is nervous? More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Survivors Commemorate 70th Anniversary of Nazi Liquidation of Polish Ghettoi
X
Kane Farabaugh
August 30, 2014 1:20 AM
When the Nazi army moved into the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Polish Ghetto

When the Nazi army moved into the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.