As Chinese-owned businesses grow across Africa, so does local backlash

When she sees customers flocking to the Chinese-owned shops in Tanzania’s biggest city, Halima Nyondo worries about the future of her small fabric shop. She recently lost a long-time buyer who preferred the cheaper prices of the Chinese retailers.

“If they keep doing it, our children will become beggars,” she said. “It’s a very unfair game.”

Tanzanian merchants cannot hope to match the low prices of the Chinese shops, Ms. Nyondo says in her small store in Dar es Salaam. “They import directly in bulk, while we rely on middlemen. But this small business is the only way we survive.”

The mounting anger of Ms. Nyondo and thousands of other Tanzanian traders finally led to government action this year: a new regulation to ban foreigners from 15 economic sectors, mainly small businesses.

It’s part of a larger anti-Chinese backlash across the continent. A growing number of Africans are resentful of the expanding presence of Chinese traders in markets and shops, and the mood has triggered a surge of protests, arrests, government restrictions and social-media outrage.

Over the past 20 years, China has rapidly become the biggest trading partner of most African countries, and one of the most important investors. Its construction companies have built highways, ports, railways, soccer stadiums, presidential palaces and government offices across the continent – including the headquarters of the African Union and the parliament buildings of Zimbabwe, Malawi, Gabon and Lesotho.

But while the investment is welcomed by African state leaders, the dramatic growth of Chinese shopkeepers and small mining companies is increasingly controversial at the grassroots level, where the migrants are often accused of profiting from corruption, unfair competition, counterfeit goods and environmental damage.

In Angola, scores of Chinese shops were looted by angry protesters in August, triggering the shutdown of many factories and an exodus by thousands of Chinese nationals who fled the country. In South Africa, inspectors and vigilante groups have raided Chinese factories and shops, hunting for immigration violations and other infractions.

In Zimbabwe and Zambia, local media have exposed environmental disasters caused by Chinese mining companies, including poisoned rivers and razed hillsides, provoking public outrage. In Ghana, authorities have arrested dozens of Chinese migrants, accusing them of illegal mining, a phenomenon that has led to deforestation, soil degradation and toxic river pollution.

There have been anti-Chinese protests in Africa in the past, as far back as the early years of the century. This time, however, the protests are more widespread and more vociferous, even in countries that are traditionally friendly to Beijing.

Several countries have taken the same step as Tanzania: promising stronger enforcement and regulations to crack down on Chinese activities.

In Zimbabwe, where China has long been welcomed, the government has recently become more willing to criticize, with one official accusing the Chinese of bribery, illicit financial activities, evading the banking system and even desecrating graves.

“We are noticing that some Chinese companies are digging up our ancestors’ graves to extract granite or gold,” said Tafadzwa Muguti, secretary for presidential affairs in Zimbabwe’s cabinet office, in a speech to a Chinese business forum. “They move the bones aside and begin digging. That is a deep sign of disrespect in any culture.”

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By some estimates, anywhere from 700,000 to one million Chinese nationals are living in Africa today. Some are workers for Chinese companies, but many are traders, merchants or mining entrepreneurs who found China’s business sectors too crowded and competitive – so they migrated to Africa instead.

“Africa is a big market, people need everything here, and they want it cheap,” said Xin Li, who sells Bluetooth speakers and cellphone chargers in Dar es Salaam’s vast and bustling Kariakoo market.

He arrived from China six years ago. While his imported goods can sometimes be stuck at Tanzanian ports for weeks, he says he still makes money. “For us, it is opportunity. In China, competition is too much. Here, if you work hard, you can make profit.”

Another Chinese trader, Zhang Xinghao, sells brightly coloured plastic shoes from a stall in the market. “I came because friends told me business is good here,” she said. “And yes, it is good, but it is also very hard. Customers always want cheaper, cheaper. Profit is small. But if you sell a lot, you can get something.”

Many Tanzanians are grateful for the Chinese businesses, seeing them as sources of employment and cheap prices. And some Chinese have quickly integrated by learning the local Swahili language. “Sometimes, you forget they are foreigners,” said Said Ally, a motorcycle taxi driver who often ferries Chinese customers. “They call me kaka [brother] just like anyone else.”

In the dense warren of alleys in Kariakoo market, the streets are packed with vendors shouting prices, porters pushing overloaded tricycles and motorbikes swerving recklessly through the crowds. The air is heavy with sweat, diesel fumes and the sharp tang of raw sewage. Every square inch of space is claimed: wooden stalls crammed with second-hand jeans, fruit piled high in plastic containers, boxes of Chinese electronics spilling into the street.

Here, a Tanzanian trader typically sells a pair of plastic sandals for 5,000 shillings (less than $3) – but the same sandals in a nearby Chinese-owned shop are just 3,500 shillings. A kettle that would cost 22,000 shillings at a local stall is just 15,000 across the street.

“Why should I pay more?” asked Anna Mwakyusa, leaving a Chinese shop with a bag of plastic plates. “I know these things don’t last long, but I can buy two for the price of one.”

For many Tanzanian traders, the consequences are dire. The Kariakoo Traders Association estimates that the monthly income of the average small trader has dropped by about 40 per cent in the past five years as Chinese competition intensifies.

“Some of the Chinese are even hawking shoes or frying potato chips – jobs that should be done by Tanzanians,” said Severine Mushi, chairman of the traders group.

“Let them work in large-scale manufacturing projects, where they can bring technology transfer. But don’t let them open shops selling the same socks and cooking oil as our people. It is killing us. We are being slowly strangled.”

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Chinese traders have unfair advantages, he said, because of their access to cheap imports from Chinese factories and cheap credit from Chinese banks.

“People are already saying, ‘Why are we suffering in our own land while foreigners take the profits?’ This breeds anger, even xenophobia.”

Some Tanzanian traders allege that Chinese merchants use bribery for quick access to licences and permits. “If you are local, you wait months to get a licence, but if you are Chinese, you just pay someone and within days you are trading,” said Mohammed Musa, a clothing dealer.

Elsewhere in the city, thousands of Chinese migrants have moved into an upscale suburb, Mikocheni, where they run everything from garages and car-wash stations to herbal clinics and restaurants.

Tanzanian trader Salum Juma points to a stack of plastic chairs that have stood unsold for weeks. “Before the Chinese came, I could move a whole batch like this in two days,” he said. “Every morning, I wonder if I will make enough to pay rent and support my family.”

A shop called Chinese Citistore is popular among bargain-hunters. Almost everything – cosmetics, costume jewelry and beauty kits − is priced at 3,000 shillings (about $1.70). “It’s unbelievably cheap,” said Mariam Lubogo, a university student shopping for eyeliner and earrings. “If I buy it elsewhere, I’d pay three times this price.”

Under a new Tanzanian regulation, approved in July, foreign nationals are prohibited from 15 types of business activities, including cellphone and electronics repair, mobile money transfers, beauty salons, small-scale mining, tour guiding, real estate brokering, home and office cleaning, crop buying and parcel delivery. Violators can be jailed, fined or lose their work visas and residence permits.

Tanzanian traders were pleased by the new regulation – until they discovered that the government had unofficially delayed its enforcement until after the Oct. 29 national election, seeking to avoid political turbulence.

“We were excited when this rule finally came out, but now I’m disappointed,” said Mariam Hussein, a 43-year-old mother of three who sells domestic utensils.

“It’s frustrating. It’s like fighting a ghost. Every day, we see the Chinese quietly at it again. They just change the shop name, or put a Tanzanian in front, while they stay inside organizing everything.”

While some Chinese traders are betting that the anti-foreigner regulations will be diluted after the election, others are planning their exit.

“This law is unfair to people like us who are trying to make a small profit by selling the goods that Tanzanians need,” said Zhang Xinghao, the plastic-shoe seller.

“Shutting down our shops would be really hard and painful. We’ve built our whole lives here. If they force us out, some of us will have no choice but to leave.”