February 5, 2007

Cold reception for China's president

China's pledge to pour US$ 800 million over the next three years has been given a frosty reception on the ground, as many locals believe the investment will hold little benefit for the people, two-thirds of whom live on one dollar or less a day. Chinese president Hu Jintao made the multi-million dollar announcement, when he also wrote off $11 million worth of debt, promised to build schools, and provide agricultural training and loans for road-construction equipment. A trip to Copperbelt Province to lay the foundation stone for a national stadium was cancelled at the last minute, apparently over fears that he would be embarrassed by a protest over poor working conditions planned by mine workers. Police also sealed off all access roads to the University of Zambia's campus, the day Hu arrived, after widespread rumours that students were going to demonstrate against his visit.
According to Muweme Muweme, social conditions research project officer at the Jesuit Centre for Theological Reflections, a faith-based human rights watchdog, the problem with such foreign direct investment as the Chinese was that it always came with vested interest, which was profit. Many of these investments coming into the country were actually not helping in building the capacity of the local people so that they could contribute to their own economic growth. "It is time that our government stopped favouring foreigners through incentives because Zambia offers raw materials. Government should be more cautious with these investment pledges," he said.
A $200 million copper smelter is the centrepiece of an Economic and Trade Co-operation Zone in Copperbelt Province, the first of five such zones to be established in Africa with Chinese investment and the co-operation of host governments. The Zambian zone is expected to create 50.000 new jobs by 2010, adding to the 10.000 jobs already created by China's investments - a high number of employment opportunities, given that only about 400.000 formal jobs exist in a country of about 10 million people.
Hu's policy of strengthening ties with the mineral- and energy-rich continent boosted exports to Africa by 36 percent to $13.82-billion in 2004, while imports, mostly natural resources, rose 81 percent to $15.65-billion. In 2006, total trade between Africa and China reached US $55.5-billion, and China now sources one-third of its crude oil imports from Africa.
Zambian President Levy Mwanawasa's investor-friendly policies offers generous investment terms to lure foreign mining companies, such as 20-year tax holidays, a low 0.6 percent mineral royalty tax - the global norm is 3 percent - and no duty imposed on imports of equipment and machinery. According to the Zambia-China Business Forum, bilateral trade between the two countries grew by 11.8 percent in 2006 to $316 million.
Hu's two-day stopover in Zambia was an indication of its importance to China, as the seven other African countries he is visiting to promote trade were only being given a day each. His tour also took him to Cameroon, Liberia, Sudan, Namibia, South Africa, Mozambique and the Seychelles.
Emily Sikazwe, executive director of Women for Change, a local gender and human rights advocacy organisation, said Chinese investment was counter-productive. "This move will promote massive externalisation of the few resources that Zambia has, because our country will be used as a provider of cheap raw resources and a market for poor-quality goods. We expect China to make their investment in our country more meaningful by observing human rights, especially the right to livelihood and dignity."
As China's investment increases, so do the number of Chinese people residing in Zambia, which is becoming another hotly disputed issue. Deputy Minister of Home Affairs Chrispin Musosha recently told parliament that within six months the number of Chinese people working and living in Zambia would double from the current figure of 2.300. But Guy Scott, secretary-general of the Patriotic Front, claims there were 80.000 Chinese people currently residing in Zambia. "People are very angry with China's investment in Zambia: they are paid poor salaries, they work under risky conditions - in some cases without protective clothes - and this is why no one seems to be supporting them." Two years ago, 49 miners were killed in an accident at the Chinese-owned Chambishi Mine in Copperbelt, and 2006 five miners were shot dead by police during violent protests over working conditions at the same mine. (IRIN)

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