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On Recent Beijing Visit, a Tall Order for Zambia VP

In September, Rupiah Banda stood down from the Zambian presidency. After 20 years in office, his Movement for Multiparty Democracy was defeated by Michael Sata’s left-leaning Patriotic Front.

Such a peaceful transition of power is unusual for Africa. Perhaps more remarkable still is that President Sata appointed Guy Scott, a muzungu, or person of European origin, to the vice presidency.

“Michael knows his political symbolism, [and] it shows much more broad-mindedness than most African leaders," said Scott. "In one of our neighboring countries, the cry is, ‘Where is our Michael Sata?'"

While Scott may be symbol for equality in post-colonial Africa, he is also a senior member of a party that won power on a pledge to address the growing economic dominance of one very specific racial group in Zambian society -- the Chinese. In late December 2011, he found himself in Beijing representing President Sata in talks aimed at addressing precisely that issue.

“What I want to do is take with me an investment framework," he said shortly before arriving in Beijing. "Not one developed by the Chinese that we have simply accepted. One that is acceptable to us.”

He said that would include a lesson on the different private and public organizations in Zambia that play a key role in its economy.

“They don’t know about these funny chambers of commerce and employers associations and all these people you’re supposed to work with if you’re in business," he said. "I’ll tell them that in Beijing: 'You’re suffering from a lack of institutional development even relative to a small little ex-protectorate like Zambia.'"

Talk to Zambians on the street, however, and they tend to paint the Chinese as opportunists who exploit Zambian resources and workers while considering themselves above the law.

The disaffection is easy to understand. Traditional, family-run businesses like textile manufacturing and chicken farming, have been decimated by the influx of Chinese.

By importing cheap labor and goods from China, the migrants undercut local entrepreneurs, which results in thousands of job losses.

"In nearly every town we are able to find Chinese, anywhere they can find business," said Bernard Lusale, financial services coordinator with Zambian Micro-bankers Trust, a government-funded agency that supports small local businesses and traders. "Their prices [are] minimal as compared to this poor Zambian who has accessed a loan at a great cost and, as a result, struggles to raise re-payment."

Employment practices of Chinese companies are fueling local opposition. An incident last November at a Chinese-owned coal mine in Collum, in the south of the country, represents a low point in Sino-Zambian relations.

Upset by roof collapses and the withholding of salaries, miners staged a spontaneous non-violent protest. Instead of negotiating with their staff, Chinese managers fired on them with shotguns.

"Of all our investors, the Chinese are the most labor-intensive, but paradoxically the worst labor managers," said Scott, who explained that Chinese businesses frequently have labor problems with local workers. "You get open conflicts quite often between the workers and Chinese management. They tend to corrupt the unions. Take them to China for free shopping and ... that way, sterilize the unions. That way you have no trusted conduit [to] speak to your workers."

Relations were not always so poor between Zambians and Chinese. Former President Kenneth Kaunda, Zambia’s first post-independence leader, said only China under Mao Zedong offered support in building the railway to Dar-es-Salaam, which allowed Zambia to trade with the world.

The Chinese rail backing came when Kaunda was struggling to push Zambian development during the 1960s and 70s, and western powers had turned their backs on his people.

"Colonial powers were very destructive to us," he said. "We [were] suffering. China said 'yes'. Mao Zedong and his government helped to build that railway. We are grateful to them. China helped us a lot in the early days, so we are doing business entirely on equal terms."

But many Zambians now see an unequal relationship. Within days of President Sata’s election, one thousand Zambians working at Chinese mines went on strike to demand a doubling of wages. They expected their new president to stand with them as he had promised on the campaign trail.

It was the first test of Sata’s presidency. The Chinese responded by firing all of the strikers, and the new Zambian leader suspended the issue of new mining licenses. Later, the dismissed strikers were re-hired on improved terms.

The Chinese Embassy in Lusaka did not respond to a request to discuss Sino-Zambian ties, but as Africa’s largest copper producer, Zambia remains crucial to China’s economic development.

Subsidiaries of the state-owned China Non-Ferrous Metals Company have invested more than $2 billion in the country. Two-thirds of Zambian government revenues depend on the mining sector alone.

Of the seven sites that are home to Chinese special economic zones in Africa, two are located in Zambia, and The Bank of China (BoC) has even started issuing Chinese currency through its Zambia branch. The strategy, a first for BoC, is seen as a model for Chinese businesses to circumvent reliance on U.S. dollars in their trade on the continent.

To assuage China, Sata sent former President Kaunda on a mission to Beijing in November in order to reassert the two countries’ historic ties.

But while pragmatism may have compelled the president to soften his stance on China -- with Kaunda representing the gentle face of Zambian diplomacy -- Scott appeared to have been briefed to stand firm.

"We need to set the rules in such a way they are acceptable to us as well as to them," he said. "I mean, we don’t need to be shot to the moon. It’s not as if you need to take the cream of China’s technology. But you need something a bit better than feeding chickens as the outcome of this [investment] process."

But, historically, Zambia has had a difficult time asserting authority over its Chinese partners. For example, after a group of Chinese miners appeared in court in Lusaka in early December, accused of raping seven Zambian children, Zambia’s new Foreign Minister Chishimba Kambwili demanded Chinese staff at the mine attend a meeting with him.

Kambwili intended to instruct the miners about the behavior expected of Chinese workers in Zambia. Nearly all of the workers did not show up.