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China and Zambia:
The all-weather friendship hits stormy weather
Paul Hare, The Jamestown Foundation, China Brief
Developmental Assistance and the Lure of Copper
China and Zambia continued to enjoy a warm relationship in the years following independence, even when China’s fortunes dipped elsewhere on the continent during the Cultural Revolution. In addition to the massive Tazara railway project, China also built roads and a government complex in Lusaka. Another highly touted project was the Mulungushi textile plant established in the late 1970s, which became the biggest textile mill in the country, winning international awards for the quality of its products. In return, Zambia supported Beijing’s “One China” policy upon receiving its independence and co-sponsored the UN General Assembly resolution in 1971 to restore China’s seat on the Security Council.
When Zambia achieved independence in 1964, it was the third largest copper producer in the world, exporting over 700,000 tons per year and ranked among the most prosperous countries in Africa. Almost 35 years later, however, production fell to a mere 228,000 tons and so did the overall state of the Zambian economy. Low copper prices in global commodities markets, minimal reinvestment in the mines and inefficiencies in the state-controlled enterprise that ran the copper mines all contributed to this precipitous economic decline. When the Zambian government began to privatize its state-controlled enterprises in the 1990s, what is now the state-owned China Non-Ferrous Metal Mining (Group) Co Ltd acquired ownership of the defunct and bankrupt Chambishi mine in north-central Zambia for $20 million in 1998 and began turning production around. The Chinese committed additional investments into the copper sector when they announced last November an investment of $200 million in a copper smelter to be located in the newly established Multi-Facility Economic Zone in Chambishi.
Bloom Off the Rose
Despite the long and well-entrenched history of friendship between China and Zambia, the relationship has recently encountered some rough waters. A growing tide of anti-Chinese sentiment surfaced during an unusual and highly volatile election at the end of September 2006, pitting incumbent President Levy Mwanawasa against the veteran, hard slugging opposition candidate, Michael Sata, also known as “King Cobra.” Mwanawasa had generally followed a program of economic reform and inducements to attract foreign investment during his first term. Sata, on the other hand, preached a populist message on the campaign trail laced with anti-Chinese references that resonated in the Copperbelt, where Chinese businessmen were accused of paying low wages and ignoring safety procedures. Contributing to the poisoned atmosphere among the miners were two tragic incidents—the death of 49 miners in an explosion at the Chambishi mine in 2005 and the shooting of several miners protesting low wages at the same mine in July 2006.
The growing number of Chinese engaged as traders in the local markets or working in unskilled or semi-skilled positions posed another target for the opposition. Zambian traders complained that the Chinese were importing cheap goods and were driving them out of business. The textile industry was particularly affected, including, ironically, the famed Mulungushi textile factory that the Chinese had helped establish just decades before. Compounding the problem was the fact that that no one could offer an accurate estimate of the number of Chinese in the country. Deputy Minister of Home Affairs Chrispin Musosha told parliament that the 2,300 Chinese living and working in Zambia were expected to double in six months, but others sources claimed that as many as 80,000 Chinese were already residing within the country (UN Integrated Regional Information Networks, February 5). Dipak Patel, a former minister, warned the government: “We have a lot of Chinese traders selling in the market and displacing local people and causing a lot of friction. You have Chinese laborers here moving wheelbarrows. This needs to be dealt with because you’ll end up with a situation with what happened in Uganda with the Indians” (The Guardian, February 5).
The electoral campaign heated up when Sata threatened to chase away the Chinese, Indians and Lebanese, if elected, saying they were “infestors” not “investors.” Local media also reported that he had met with Taiwanese businessmen in Malawi to get funding for his campaign and reportedly stated that he would recognize Taiwan as an independent country if he were elected. While Sata denied having received money from Taiwan, he was more ambivalent about his views on the relationship with Taiwan. The Chinese Ambassador to Zambia, Li Baodong, in an unusual departure from diplomatic protocol, responded by calling a press conference at the embassy where he challenged Sata to clarify his position on Taiwan. According to one news report, the ambassador threatened, “We shall have nothing to do with Zambia if Sata wins the elections and goes ahead to recognize Taiwan” (AFP, September 5, 2006). Li also reportedly added that the Chinese business community would halt additional investments until the bilateral relationship between the two countries was clarified. Mwanawasa quickly responded by stating that Sata’s comments were unfortunate and appealed to the Chinese to rescind their threat to pull out their investments in Zambia. While some commentators berated what they considered to be Sata’s disastrous foray in the international arena, others were incensed that China had poked its nose into the internal affairs of the country.
Mwanawasa won the September 28 elections by a handsome margin, but Sata’s party, the Patriotic Front, performed well in the Copperbelt and in Lusaka, where the Chinese presence is most visible. In retrospect, the most notable feature of the campaign was the degree to which Chinese diplomacy became publicly enmeshed in the internal politics of an African country—an apparent contradiction to China’s stated policy of non-interference.
Hu’s Recent Visit to Zambia
President Hu spent two days in Zambia during his eight-nation trip to Africa in February, more time than in any other country. Some observers attached special significance to this fact, though it is likely that the length of the stopover was prompted more by logistical calculations than by any other considerations. The Chinese leader arrived with the promise of investing $800 million in the new Multi-Facility Economic Zone in Chambishi, the first such zone to be established in Africa. The zone is expected to attract both Chinese and Zambian investors and generate thousands of jobs. Other gifts included cancellations of debt; providing loans for road construction equipment; building a large sports stadium in Ndola, the Copperbelt’s largest city; establishing an agricultural technology center, two rural schools, a hospital and a malaria treatment center; and increasing the number of government-funded scholarships. If the purpose of Hu’s trip was to cement the bonds between the two governments and their leaders, these goals certainly appear to have been achieved, judging by the fulsome coverage given to the visit in their respective state-controlled media.
Yet, the otherwise smooth façade surrounding the visit cracked due to a number of notable incidents. Hu had intended to visit the Copperbelt to lay the cornerstone for the Ndola stadium and to commission the copper smelter in the new economic zone. Fear of protests by miners over poor working conditions, however, prompted the cancellation of his visit, which was prominently highlighted in the international media. Concerned with possible student protests, the police also sealed off all access roads to the University of Zambia on the day of Hu’s arrival. And, finally, there were the workers from the Mulungushi textile factory, who just days before, had staged a protest outside of the Chinese Embassy to complain about the loss of their jobs. The factory’s huge financial losses, stemming in part from its inability to compete with cheap Chinese textile imports, forced it to close temporarily.
What Does the Future Hold?
While it seems the Chinese are on the verge of taking over Zambia, starting with the rapacious Chinese companies that seem to be acquiring much of Zambia’s rich copper and cobalt resources, the reality of the situation is hardly the case. Vendanta Resources, an Indian-managed company registered in the UK, acquired the country’s leading copper producer (Kondola Copper Mines) in 2004. A Swiss company, Glencore International, operates the second-largest producer, Mopani Copper Mines. Other countries involved in copper and cobalt production include Canada, Australia, South Africa, the United States and the United Kingdom. Total copper production reportedly rose to about 427,000 metric tons in 2004, of which the Chinese share represented a little over 10 percent of the total .
Likewise, while the Chinese role in Zambia continues to expand, a host of other actors also occupy influential positions. South Africa is Zambia’s biggest trading partner, but other African countries—Tanzania, Malawi and Zimbabwe—are also important partners. Moreover, the United States enjoys a good relationship with Zambia and provided some $268 million in assistance through bilateral and multilateral channels in 2006, making it the largest single donor in the country. In December 2005, the two governments signed an agreement canceling $280 million in bilateral debt . A number of multilateral organizations are also involved in the country. The World Bank is the largest multilateral donor and the IMF conducts periodic economic reviews under a three-year Poverty Reduction and Growth Facility. This multitude of external actors, all with significant stakes in the country, serves as evidence that Zambia is unlikely to fall under the exclusive sphere of influence of any particular actor in the near future, including China.
Furthermore, the ripples of anti-Chinese discontent that surfaced in Zambia’s election campaign and during Hu’s visit flowed from real grievances among the populace; echoes of these, albeit more muted, were also found in Hu’s subsequent travels to South Africa and Namibia. South Africa had previously felt the sting of Chinese textile exports crippling local industry and President Thabo Mbeki had warned just in December that Africa risked becoming an economic colony of China. While Hu received a warm welcome from South African President Mbeki in February, one major South African newspaper pointedly issued a strong critique of China’s human rights and labor records; a Namibian newspaper leveled similar criticisms (The Namibian, February 5).
This is not to say that the Chinese position in Zambia and the southern African region is in peril. If one examines the September 2006 election results in Zambia, Michael Sata received 29% of the vote; Levy Mwanawasa and a third candidate, Hakainde Hichilema, shared the remainder of more than two-thirds of the vote. Thus, while the anti-Chinese sentiment is certainly troubling for Beijing, it is not immediately threatening toward China’s interests. What remains to be seen now is how China will deal with countries that have opposition parties and some degree of freedom of the press, and where labor unions and non-governmental activist groups can make life uncomfortable for those in powerful positions, both domestic and foreign. China can expect growing criticism from these groups if Chinese companies, such as the operators of the Chambishi mine, fail to address the legitimate grievances of their workers. Likewise, if small Chinese traders and unskilled workers continue to multiply and ply their wares and services in African markets, local resentment can be expected to grow, leading, as Dipak Patel warned, to ugly confrontations down the road.
1. The Tazara railroad was intended to bypass the use of transportation routes through apartheid South Africa. This was especially important for the export of Zambian copper. The Chinese government offered an interest free loan of about $500 million and work on the project was completed in 1976. On the downside, the Tazara locomotives were underpowered and had to be outfitted with GE engines; and, the roads did not wear well.
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