/ 9 January 2006

From China with love

China City, behind Ellis Park in Johannesburg, resembles a flea market, though the goods on sale are new. This sprawling maze of traders, selling low-priced and largely fashion-challenged clothes and shoes, as well as sunglasses, toys, leatherwear, electronic goods and food, is open seven days a week, shunting thousands of boxes of goods, mainly imported from China.

At first glance, the economics of the centre is puzzling. On some weekdays, there are only a few customers. On weekends, cars and bakkies queue around the block to get in. An observer may well ask: “How many R5 belts can someone sell and still make a living?”

The answer is volume. China City sells to small traders from all over the country, propping up the countrywide informal sector economy, and, equally important, it sells to traders in other African countries.

This is the other side of the story that Chinese imports are destroying local jobs.

South Africa has become a major conduit to the continent for Chinese manufacturers, in the process creating a brand new inflow of foreign exchange and playing a key role in “economic tourism” from Africa.

This economic tourism, with shoppers buying all sorts of goods in South Africa to take back home, brings in billions of rands a year. It is also creating a new support industry for those trades, in everything from accommodation to storage, the so-called multiplier effect.

There are several other Chinese shopping complexes in Johannesburg, including Asia City, Hong Kong City, Crowne Square, Gold Reef Emporia, Dragon City and the African Trade Centre — each an economic web of China meets Africa, oiling the second economy and supplying retail outlets throughout the region.

This is an unplanned phenomenon, driven by Chinese entrepreneurship supplying the needs of local and other African entrepreneurs and helping create a regional shopping hub in Jo’burg.

The customers at China City are mainly black and Indian, hawkers in the local informal sector, small-town traders and shopkeepers who come in from all over the country, as well as from countries such as Botswana, Zimbabwe, Angola and even Nigeria and Ghana.

As one shopper from Port Elizabeth, who was stocking up for his township shop, put it: “Everyone wants cheap clothes. You can buy here and still make a profit.”

Customers at these complexes can spend as little as a few hundred rand, packing bags they carry. Others spend between R20 000 and R50 000 a time, shipping goods up north.

Figures in the 2004 Annual Tourism Report by the South African tourism strategic research unit illuminate the growth of these centres.

In 2004, more than a million people visited for cross-border trade — 750 000 by road (bus, cars, taxis and rail) from the region and 300 000 by air from further north — spending R8-billion that year, not only in these complexes but at other retail wholesalers and also on accommodation, food, transport and entertainment.

Research by the development NGO ComMark Trust indicates that cross-border shopping and trading with people from neighbouring countries is growing and becoming an increasingly important feature of Jo’burg’s tourism industry. These trading tourists are also supporting economic growth back in their own countries.

They are big spenders. According to South African Tourism, travellers from Africa in the business and retail category spent an average of R3 721 a day.

While the buyers are African, the stall owners at China City are mainly immigrants from mainland China. Instead of the vast sums of foreign direct investment sometimes trumpeted in the business press, China is importing not only goods but also people.

It is estimated that there are between 100 000 and 200 000 mainland Chinese immigrants in South Africa, both legal and illegal. They have taken up residence in Cape Town and settled in small towns across South African and in neighbouring Lesotho, where even remote rural villages now have a Chinese shop. But most have come to Jo’burg, where they have colonised a spread of suburbs in the Eastern part of the city, from China Town in Cyrildene through to Edenvale.

The problem of not speaking English is averted by living in an almost enclosed economy — working with Chinese and buying from other Chinese shops. Communication with customers can be as simple as providing the price of items. The urge to trade has overcome the language barriers.

That the Chinese have spotted the gap of wholesaling is testament to their entrepreneurship, particularly as many of them started out as hawkers back in the 1990s.

The earliest record of the new immigrants from mainland China dates back to 1991 when 42 were arrested in Boksburg and appeared wearing headbands with Chinese script that translated into “hunger strike”. They were all deported. The next time the presence of these new immigrants sprang into the public’s awareness was several years later when there were clashes on the streets of Johannesburg between Chinese and black hawkers. The latter objected to the Chinese muscling in on their turf.

Taiwanese immigrants came into South Africa in the 1970s and 1980s, initially to bolster up the apartheid government’s border industries policy. They were lured by generous incentive schemes and manufacturers came with capital to open businesses, bringing with them skilled staff to work in their factories.

By contrast, most of the Chinese from the mainland arrived without money and with few skills other than the ability to work hard.

Since the finalising of diplomatic relations with the People’s Republic of China at the beginning of 1998, Chinese companies have begun investing in South Africa, although foreign direct investment remains low and concentrated in the resources sector.

There are now essentially three strata of mainland Chinese in South Africa: diplomats, entrepreneurs setting up businesses and investing in property and acting as export agents for commodities such as fruit, and workers and traders.

Some of those who have been around for a while have prospered — the route to wealth was hawking, then branching out to supplying hawkers, then becoming a wholesale supplier and then an importer. But the days of hawking on the street are over. China City and the other complexes have now provided these new immigrants with an economic base.

Janet Wilhelm is the author of The Chinese Communities in South Africa Today, a chapter in the State of the Nation: South Africa 2005-2006, the third in the Human Science Research Council’s series

Corruption compounds problem of ‘illegal’ immigrants

Estimates put the number of mainland Chinese immigrants in South Africa at between 100 000 and 200 000, both legal and illegal.

A figure of 100 000 illegal immigrants has been quoted a number of times, the origins of which appear to be an Institute for Security Studies research paper in 2001 by Peter Gastrow, Triad Societies and Chinese Organised Crime in South Africa.

Gastrow said there were 100 000 Chinese citizens/residents and quoted police sources as saying there were between 100 000 and 200 000. Since then, this figure of 100 000 illegal immigrants has been mentioned in a number of newspaper articles and has become a consensus — though not necessarily correct — alongside the figure of 80 000 legal immigrants, which is the figure from the embassy of the People’s Republic of China in Pretoria.

The People’s Republic of China embassy accept that its figures are not accurate and does acknowledge that there are illegal immigrants, but it does not think it as high as 100 000. People in the mainland community also say the figure is too high and that it does not take into account migratory flows, as many people have gone back to China or moved on. They also say the situation has changed and that people get papers once they are here and that this is becoming easier.

The evidence is that this is being done legally in some cases. There are now firms of lawyers specialising in helping Chinese nationals get legal papers, such as upgrading from a visitor’s visa to a business visa or the self-employed category.

In the end, no one knows exactly how many Chinese immigrants there are in South Africa and the presence of large numbers of illegal immigrants is proof of a failure of immigration policy and of widespread corruption in the policing of immigration laws.

People enter in various ways. Some arrive as visitors and stay, forfeiting their deposits lodged at the South African embassy in Beijing. Others are enticed to come with false promises of work and some are then forced into prostitution. Yet others are victims of scams — after paying a large fee they are abandoned, often at the airport or in a hotel.

One of the illegal migrant entry routes is air travel to South Africa via Johannesburg to Mbabane or Maputo or Maseru, where migrants buy false identity documents and passports and use these to enter South Africa by road. Chinese nationals have also been heavily implicated in the false marriage scam. Smuggling rings are trafficking illegal immigrants into South Africa using men known as “snakeheads”. Some stay while others are in transit to other destinations. According to an official of the International Organisation of Migration who is tracking human smuggling rings in Lesotho, they stay in South Africa for a couple of months, get false papers and then move to South America and finally, the Chinese dream destination, the United States.

While it is certainly the case that many Chinese break the law to enter the country, in the broader picture of crime, they are often the victims. The Chinese community in general bears the brunt of the common public perception that illegal immigrants are responsible for crime, while they are often the victims and are harassed for bribes. Stall owners at China City say the police wait to be paid off in the streets outside the centre on Sundays when Chinese shop owners from smaller towns come in for supplies. It seems clear that bribery is widely used to avoid arrest and deportation. Early last year, Parliament undertook a fact-finding mission and found only African detainees being held at Lindela repatriation centre prior to deportation, and no Asians or whites.

Figures released in Parliament in June indicated that only one Chinese national was being held in the facility at the time.

However, on the other side Chinese crime would not exist without local collusion. Corruption plays an important role in facilitating the activities of the triads. Corrupt home affairs officials issue false papers to facilitate illegal immigration. Some officials from customs and excise are also thought to be involved in clearing illegal goods, often with forged documents. — Janet Wilhelm