Category Archives: Deborah Brautigam

China’s Engagement in African Agriculture

“China’s Engagement in African Agriculture” by Deborah A. Brautigam and Tang Xiaoyang in China and Africa: Emerging Patterns in Globalization and Development (2009)

This article examines various facets of China’s agricultural engagement in Africa from 1960s to the present. The main focus is on the role of the Chinese state in the history of Chinese development projects in Africa.

1) History and Diplomacy: In the 1960s, the Chinese invested in state-owned farms in Tanzania (Mbarali state farm), Guinea and sugar or tea plantations in Mali, Benin, Togo, Madagascar, Zanzibar and Sierra Leone. By 1985, China supported agricultural aid projects in 25 African countries. Increasing engagement in agricultural projects was propelled by diplomatic “South-South” relations, as evidenced by premier Zhao Ziyang’s 1982 trip to Africa. In the 1980s, Chinese teams were involved in building infrastructure ranging from building bridges to irrigation systems. The focus was on image of diplomacy, which explains the reason projects tended to be visible and were funded by Chinese grants rather than loans. Structural adjustment policies in the 1980s and 1990s created a vacuum for Chinese state-owned companies to continue projects that they had begun in earlier decades.

From 1995 to the present, there has been a general trend towards integrating aid projects and Chinese enterprises. Rhetoric of “helping out” has been enshrined in agricultural development and other project as a way to temper potential backlash against China’s extraction of resources in African countries. This has been couched in terms of “getting and giving.” However, there continues to be persistent backlash against Chinese agricultural investments intended to provide for food security in China. For example, Chinese interest in helping Mozambicans increase rice production when only a small percentage of the population eat rice brought criticism to the fore. Some Chinese officials responded with the argument that offshore farming is simply unprofitable as shipping costs are too expensive. At present, however, as the authors argue, Chinese farms cater mostly to local sales (rice, wheat, livestock and poultry) or for export to global markets (vanilla from Uganda, vegetables from Senegal and sugar from Sierra Leone).

Examples of symbolic development projects:
a) In 1988, Chinese experts were sent from Wuhan to Sierra Leone to help with rice stations. The civil war in 1991 sent Chinese experts to Freetown. The project was suspended until 1999 when teams from Wuhan were sent again to rebuild rice stations, remaining there until 2008. Magbass Sugar Complex was another project in the late 1970s, which was one of the first projects to be directed by Chinese managers. Later, Magbass became privatized and the Chinese brought tried to rehabilitate the sugar plantation. However, this project came to a halt and eventually, the Chinese company decided to renege on offers to commit to sugar projects in Madagascar and Benin as well. Land disputes were symptomatic of a rift between the locals who claimed to be the landowners of the plantation and the government, which had promised the Chinese that they could expand the size of the plantation. The Chinese were caught in the middle of land ownership claims and rising tensions contributed to their eventual divestment.
b) Joint ventures were established between Chinese companies and local companies. In 1989, a Chinese company joined Liberia’s state-owned Kptatawee rice seed multiplication farm and encouraged local counterparts to work with their experts.

Examples of contemporary, more profit-oriented projects:
a) Hybrid Rice: The global seed business is worth billions of dollars and China holds the patent on hybrid rice. “Hybrids are stronger and more productive than their parent stock, but they have limitations: they need to be purchased again and again….” They are also often controlled by large multinational companies. In the US, around 95 percent of maize is planted to hybrids. Perhaps hybrid rice might be a niche for small-scale farmers in African countries.
b) In 1990s, 80 workers from Baoding in China went to work in Zambia to build a dam. They grew Chinese vegetables near their residence. When their two-year contracts ended, some workers stayed to farm. As Baoding was enduring the 1997 Asian economic crisis, the workers promoted farming in Africa. It seems there are about 28 “Baoding villages” in 17 African countries since 1998 and around 7,000 to 15,000 Baoding farmers. The premise of their villages in “entering through agriculture, get rich through processing” has aroused resentment among local farmers who argue that the Chinese “should restrict their marketing to the wholesale level” (154).

2) Labor: The authors point to three issues that arise from further Chinese engagement in African agriculture — the competition between Chinese and African growers, cash crops as competition for subsistence crops and finally, the issue of labor. Large-scale production might drive people off their land and push them into seasonal labor. One potential solution the authors offer is outgrowing, a system whereby farmers keep control of their land and the company provides technology and fertilizer to the farmers and ensures purchase of the crop in exchange for local production on a large scale.

Chinese businesses in Nnewi, Nigeria

In the same article by Deborah Brautigam (2008) about the Chinese in Mauritius, she discusses the “hidden dragon” model manifested in Nigeria. The “hidden dragon” model is characterized by few or no joint ventures between the Chinese and locals. At first, the Japanese had firms that manufactured copies of European car parts. Over time, Chinese firms replaced the Japanese ones. As she mentions, many Nigerian traders in the 1970s were involved in the business and used their connections with the Chinese to find distributors and producers. However, the question that emerges is why, unlike in Mauritius, were there no joint ventures?

Brautigam writes: “some companies, such as a producer of melded plastic components, sent groups of workers to Shenzhen and elsewhere in Asia for on-the-job training in Chinese factories. Others used their contacts with trading companies to identify Chinese manufacturers who were ready to sell used equipment, such as the oil filter manufacturer who purchased the entire plant of his Singapore supplier” (62).

She adds that due to the lack of substantial FDI by the Chinese in this part of Nigeria, there were fewer opportunities for Nnewi to work with overseas firms or collaborate in joint ventures. However, by 2006, around 60 Chinese firms had invested heavily in other sector in resource extraction, agro-processing and textiles. Furthermore, “the governments of Anambra, Benue, and Taraba States in Nigeria have entered into joint ventures to produce cement, woven bags, sugar, purified water and machine tools with the Gongji Cangxi Industry and Commerce Development Company (a Henan province township enterprise that produces machinery for juice and vegetable oil extraction, concrete and nails)” (64).

Brautigam alludes to development economist Sanjaya Lall’s study of Taiwanese investments in Lesotho. I cannot find his study anywhere, but have this quote given by Brautigam to examine:

“…Family owned and controlled East Asian firms have a culture that does not conduce to local skill creation or local participation at high levels. Work at these levels is conducted almost wholly in Chinese. The tendency to bring in textile workers from China reduces skill transfers and promotion at the shop-floor level…suspicion and hostility on the part of the local population to the Chinese…prevents the creation of greater trust and social capital” (65).

Chinese in Mauritius

According to Deborah Brautigam (2008), the Chinese had a long history in Mauritius, establishing factories early on in 1874 (tobacco) and 1897 (alcohol distillation). They made shoes, boots, rum and aloe bags for transporting sugar since 1925. Unlike the coolie migrants, the Chinese-Mauritius kept close connections with China and had enough capital to travel back home and to find wives.

This was exemplified by the Lim Fat family, who was originally from Canton. Dr. Lim Fat was responsible for cementing the Export Processing Zone Act of 1970 and encouraging other overseas Chinese and Hong Kong business-people to invest and go to Mauritius. By 1982, it was a booming industry, with 115 EPZ firms, of which 59 percent of the capital was invested by Hong Kong Chinese.

As Brautigam argues, networks “were critical for transferring information that would lower the risks and costs to Mauritians of embarking on export-oriented industry” and many of the local investors had at one point worked together in Hong Kong and used their expertise and experience to start new ventures in Mauritius.

Brautigam calls this the “flying geese” model. By 1980s, over half of the EPZ businesses were invested in locally and Mauritius became one of the top exporters of Woolmark knitwear. Interestingly enough, increasing involvement by mainland Chinese firms brought competition against Hong Kong firms. In 2003, Shanxi’s Province’s Tianli Group invested more than $10 million in a cotton yarn spinning mill. Other companies followed suit. By 2005, the textile industry shrank with many firms closing shop and 25,000 workers losing their jobs. Over 35 years since the first Chinese arrived in Mauritius, industrial investments had grown into a collaborative affair, involving local investments and labor. By 2006, restructuring led to many firms moving out of the country or shutting down. In 2007, Mauritius and Chinese governments decided to build a special economic zone (SEZ), also constructed by Tianli Group.

The “flying geese” model was short-lived. This model was also prevalent, as Brautigam argues, in Southeast Asia. What are the features of the “flying geese” model? She explains: 1) it involves joint ventures by locals and external investments 2) there must be a push from the home country, for example, labor costs or perhaps less competition 3) policies in the host country that make it conducive to FDIs and export firms. The last factor also includes economic policies, such as exchange rates and trade and capital liberalization standards that allow export firms to grow.

Mauritius stands as one of the few examples in which Chinese business networks have led to a growth of local ownership. She concludes: “…this suggests that a supply of technically skilled local entrepreneurs will be a necessary prerequisite for the transfer of technology and the start-up of new firms.”