Is China good for the developing world?

All China’s good work in promoting development is being eclipsed by its approach to labour conditions, argue Juan Pablo Cardenal and Heriberto Araujo
In this extract from their new book ‘China’s Silent Army‘, China-based journalists Juan Pablo Cardenal and Heriberto Araujo evaluate the impact of Chinese overseas investment in developing countries
Is China really an opportunity for the developing world, we asked ourselves throughout the course of our travels. For better or for worse, there is no doubt that the country’s expansion has left deep marks on the countries it has affected. However, it would be unfair to play down the positive impact that this expansion has had – either directly or indirectly – on millions of people around the planet. We much not forget the thousands of jobs created, the flow of capital generated by its long-term commitments to purchase natural resources, or the new infrastructure it has built in the developing world. Equally, it would be wrong to dismiss the cheap products made in the ‘factory of the world’ which are affordable for low-income populations, China’s multi-million-dollar investments or its aid and co-operation projects. 

However, as well as the other negative factors which go hand in hand with China’s expansion – such as corruption, the total disregard for human rights, and its actions’ impact on the environment – all China’s good work is undoubtedly eclipsed by its approach to labour conditions. This factor has arguably caused the most harm to China’s image abroad, particularly because of the visibility and sensibility of a subject that affects the poorest of the poor, as we saw for ourselves in the mines of Peru and Burma, the building sites of Sudan and Angola, the big infrastructure projects in Mozambique and the mining sites of Zambia’s mineral deposits. 

The Chinese companies’ casual treatment of their employees, contempt towards unions and complete lack of concern about alleviating conflict – a consequence of their stubborn, almost despotic approach to their position of power – inevitably brings to mind past colonialism in Africa, but this time with Chinese characteristics. ‘Common trends at Chinese businesses in Africa [included] hostile attitudes towards trade unions, various violations of workers’ rights, poor working conditions and several instances of discrimination and unfair labour practices’, a recent study into the workplace situation in Chinese companies in ten African countries concluded. 

Troubles in Mozambique

We were therefore not surprised by the blunt conclusion of Boyd Chibale, the Kitwe union leader, when he told us that ‘the Chinese are ripping off lots of money and are giving back very little’. Back in Maputo, the sociologist Joao Feijo also struck at the foundations of the ‘mutually beneficial co-operation’ on which Sino-African relations are based. ‘The Chinese companies are not doing anything for Mozambique; they’re doing it for themselves. But I don’t think the Chinese really care,’ he concluded. 
The description of what is really happening on the ground grates horribly against the background of Chinese official rhetoric. While the sign over the entrance to the Maputo National Stadium, in one of Africa’s poorest countries, boasts that ‘friendship between China and Mozambique will prevail like Heaven and Earth’, Chinese companies are nor even paying their local employees enough to meet their basic needs. What is more, the salaries they pay them are six times less than those of their Chinese employees. 
The troubled workplace situation, which has severely damaged China’s image in many of the affected areas, does not seem like a particularly difficult problem to solve. What is preventing these companies from handing out employment contracts, paying their employees an extra $50 per month or offering them basic medical insurance? What is stopping them from providing their workers with regulation gloves or helmets, or putting some meat or cheese inside those bread rolls? What is preventing them from treating their workers with dignity and using dialogue to improve the situation? 

China’s domestic constraints

At a first glance, it seems like an enormous miscalculation on the part of the Chinese government not to intervene more to tackle this issue, even if they do not have the capacity to reach every Chinese company operating around the world. However, perhaps the answer to these questions lies not so much in bad faith as in the labour conditions in China itself, where the millions of workers who have carried out the ‘Chinese miracle’ are still being exploited. 

Liu Guijin, the Chinese government’s special representative for Africa, admits that these problems exist and explains that Beijing – after refusing to share responsibility for supervising these companies with its medias or civil society – is in over its head. ‘Our government is making efforts to educate the Chinese companies to properly carry out their corporate social responsibilities, to follow fixed rules or regulations and to observe local laws… But there are so many companies scattered everywhere in Africa, and we cannot guarantee that 100 per cent of them are performing perfectly well.’ 

A glance at China’s domestic situation is enough to see that, in general, these Chinese companies are simply reproducing abroad the same labour pattern that has been in force in china for the last thirty years, ever since Deng Xiaoping outlined China’s journey to wealth along the path of ‘socialism with Chinese characteristics’. One of the driving forces behind the growth of this new model was to put the endless human resources of the planet’s most populated country to the service of the ‘factory of the world’, a tactic that included paying meagre salaries to the workforce. 

It was a wining formula: low labour costs made Chinese products very competitive, contributing significantly to the fabulous increase in China’s GDP over the last three decades, an invaluable factor in the country’s development. As China became rich, pure economic logic dictates that the salaries of the workers who generated a significant part of that wealth should also have risen in proportion to their productivity. However, this explosion of wealth hasn’t filtered down through an increase in salaries. 

Here, then, is the source of the abuse; here lies the evidence that a significant part of the Chinese model’s success rests on the shoulders and tireless work of the Chinese people. Now that China is at the height of its expansion across the world, the hardships of red capitalism have become visible in Africa and other places; however, they have already been around in China for some time. Three decades later, the unscrupulous exploitation of China’s working classes is continuing and even spilling out beyond the country’s own borders.

Juan Pablo Cardenal and Heriberto Araujo are authors of ‘China’s Silent Army: The pioneers, traders, fixers and workers who are remaking the world in Beijing’s image’. It is being published in Chinese in 2013 in Taiwan.