Zimbabwe's reality cop out or Howzit China

Every so often I go chow down in Chinatown with family or friends. In the auld days Chinatown was down near the old John Vorster Square downtown at the beginnings of Commissioner street, west of central. Number 5 was a particular favourite and a scene of many gloriously uproarious feasts back in those days before the appetites were well satisfied, and consumption capacity was still vast and never showed on the waistline-remember those days? Now Chinatown is exploding into the near east side of Jozi.

I read the other day that the Chinese population in the country has risen above 200,000 now from about a tenth of that figure in the past during the evil days. The headquarters of the China drift is in the old shopping strip in Cyrildene on the east side of Jozi, which has been transformed from a declining and increasingly run down suburban superfluity into a vibrant, gently pulsating and nourishment filled, dining exploration zone.

Notwithstanding the proliferation of eating houses my favorite parts of the 'new' journey through Chinatown al la Cyrildene are the big watch towers dotted throughout, with their machine gun toting guards known as Bad Boy'z [sic]. I always hope that a visit to the place will be okay because this brazen display of firepower keeps the real bad boyz from invading one's meal time privacy which is inclined to happen elsewhere from time to time.

A man I know with whom I have done business over the years, has premises in an industrial park on the south side of Jozi and one entire side of the park consist of warehouses that are occupied by Chinese traders who are frequently the targets of audacious raiding parties. These gangs rock up over open ground to the southeast wall of the complex, which also doubles as the exterior wall of the Chinese tenanted warehouses.

Apparently these insolent gangs drive across the open former mining land using what in Northern parts of our continent are known as "Technicals" [heavily armoured bakkies]. These heavily armed gangs smash through the walls in much the way our daily heist gangs smash the targets off the road before robbing them. I am always disconcerted, when leaving my associate's premises later than usual of a merry Friday evening, to see men armed with pump action shotguns and semi automatic rifles [AK47's even] standing on the roofs of the warehouses guarding against raiders. I hear from different sources that the new émigré Chinese traders are regarded as opportunistic targets because they have a high concentration of cash business. So I assume that Chinese traders in China town would need to have the Bad Boyz][sic] on hand, to prevent similar raiding occurrences in their more public environments.

So it didn't surprise me to read a hastily tucked piece in the press last week about discontented workers 'doing an Mbeki' on the visiting. Chinese Premier Hu Jintao up on the Zambian Copper-belt Apparently they were agitated. Chinese bosses had apparently shot workers, for unspecified reasons. A closer read on the Internet revealed that the Chinese bosses apparently own a number of the famous and formerly fabulous Zambian copper mines.

In case you have forgotten. Back in the 60's the newly emancipated Zambians pre empted the Chavez strategy for the new millennium and in the interests of socialist upliftment nationalized the copper mines. Subsequently the entire enterprise had fallen on hard times because the Zambians [like Hugo Chavez today] forgot about the market fluctuations to which all commodities are subject. Copper was in a long period of decline until China suddenly reared up on the screen and has obviously bought into the moribund Zambian enterprises.

Consider that after thirty or more years of attempting to mine copper on the Copper belt the Zambians threw in the towel and enticed those 'noice Liberals' at Anglo-American and sundry other dispossessed mine owners to repossess their stolen assets in an apparently futile attempt to get blood out of a rotting carcass.

Anglo it seems also threw in the towel, soon afterwards and either they or others offloaded their mines to those whose standards were not expected to be so discerning. Now these run-down mining operations are being squeezed for every cent of profit.

Copper prices were in a bad way for a long time and the entire industry had become moribund fuelled in part by the shift away from copper to fibre optics; and the fact that they are on a roll at the moment doesn't mean that the long term profit lines are strictly warranted in financial terms. According to the argument presented by one Michael Powers, co author of the recently published 'Scramble for Africa in the 21st Century' the mines probably yield a real return on Capital employed that is below opportunity cost. In other words the only people who may be able to afford the cost of mining for scraps of copper are those representing an unaccountable State such as China.

The simple message chapters two and three of the above mentioned book stress are that in a Commoditised market there is only one determinant of success- costs must be contained and shaved continuously. [a commoditised product is one that shows no real tangible difference to its competitors... a lump of gold is a lump of gold is a lump of gold etc] Where Africa is concerned almost everything the continent produces is commoditised. In other words when something becomes commoditised then the real cost of producing goods is lower than the best risk free alternative use to which the same capital used in the production could be used elsewhere. Only the Chinese have truly demonstrated an ability to do this in this new age and we know that their thrust into the world is devastating traditional relationships and markets all over the world.

For non-economicly literate readers this idea [opportunity cost] is best understood as follows: You take a 'date' to a fashionable dinner party where you meet the person of your dreams. But, to get that person you would have to forego the mundane certainty of your existing date. Conversely loyalty to the 'date' costs you the 'opportunity' for beautiful person you fancy at the party. Sometimes you lose both because you can't forego either- Like the soon to be totally evicted Zim farmers.

So since the only mines that are likely to be functioning in Zambia are refurbished old mines with defective infrastructure and having been owned and run down by a variety of miners they probably have to produce at below cost to make the entire venture worthwhile. Zambian mines versus the declined opportunity to invest the capital in something more profitable. Naturally the workers are squeezed. One suspects that the Chinese would prefer to bring their own workers into the equation: their productive output is legendary- Presumably these workers are equally indefatigable come sun or snow- and we don't get much snow.

Zambian workers are discovering that globalization means Commoditisation of labour. According to legend Chinese workers work eight hours a day for a bowl of rice. Naturally Zambian workers fed on a different variation of Socialist dogma and long years of State protection are not enthusiastic to entertain their new owner's views on worker solidarity. This is not a popular idea anywhere and the backlash is building on the sidelines and in the margins. Zambian workers therefore trashed the Chinese Presidential party and behaved with similar rudeness to that recently meted out to our own beloved 'Thabo the Great' by disgruntled Amazulu.

In their thoroughly absorbing analysis of Africa's 'opportunistic shot' at resuscitated glory in the wake of the rise of China in which they suggest that 'Africa is to China today what Australia and Argentina were to the United States and - Europe in the late 19th century-.' The author's fall short of noting that in both cases colonial expansion into those countries involved the eradication of the indigenous population and its replacement by the sons and daughters of the colonizers who then created the thriving society's they are today- This suggests a latently sinister caveat to Africa's ' once-in-a-century opportunity to hitch its resource rich wagon to that rising eastern star' although the authors seem unaware of this.

Last Thursday I dined with a Zim farmer who had decided to go off to London for a few weeks to celebrate a family birthday with some of his émigré kids and wait until the dust settles on the latest round of evictions of White Zimbabwean farmers. The fellow said that the latest available evidence indicated that there are more Chinese citizens living and working in Zimbabwe today than there are of the former hated Colonialist Whiteys. There were once close to 300,000 'colonialists', and coincidently a relatively prosperous base for a progressively dynamic and developmental State. As recently as 1999 that same farmer was able to observe that his Zimbabwean 'Gold' card could be spent anywhere on earth, and we could not say that in this country then.

Now inflation is 1500 % percent and rising. The Reserve bank governor has just been fired, much to his relief I believe and there are now only about 10,000 of the much-despised 'whiteys'.

Conversely there were almost no Chinese residents in the auld 'Rhodesia' and today there are allegedly more than 10,000. A man who confessed to being 'an old China hand', a most congenial German traveller with whom I also guzzled nutritious liquids on a different occasion last week, said he'd felt nostalgic hearing familiar Chinese music being fed 'musak' style into the shopping mall at the Victoria Falls although he did find it 'weird'.

What he also found weird was that many items of 'tourist kit': shirts, tee shirts, scarves etc on sale with African ethnic motifs were made in China. He was unaware that at one time both Zimbabwe and Zambia had superb domestic clothing industries*. He did insist though that most of the places that have large Chinese populations are prosperous: Singapore, Kuala Lumpur, Vancouver; so may it work for Zimbabwe.

On the other hand this may be only a temporary situation. [* In fairness to the Chinese those clothing industries were badly damaged way back when- when it became possible to import second hand clothing into southern Africa from Europe's affluent consumer 'thro away' society, where much clothing is worn only occasionally before being discarded. High quality second hand European suits trumped local simply by 'brand' power.]

Now what is the point of this?

Now that I have read the thoroughly enlightening Scramble for Africa in the 21st Century I understand that Mugabe, acting on an impulse only accessible to the truly aged in both mind and spirit has chosen [on behalf of his now scattered people] to opt out of the modern world. Instinctively recognizing the epiphanous thesis now proposed by Michael Powers he has acknowledged defeat and he has chosen a route in complete contrast to that supposedly optimistic message promoted by our own beloved President's 'African Union' idea.

Mbeki's 'big idea' is that people are worth saving, especially so called 'African' people. Further: given the present brief opportunity presented by this sudden explosion of China into the Global equation we may, by garnering our every advantage, be able to catapult ourselves [Africa] into the mainstream global economy. This mainstream global economy is entirely based on an ever more sophisticated manipulation of knowledge. Extrapolating from the Powers Thesis we could see the advanced world leapfrogging into the new, post-information, post fossil-fuel era while the developing world plods on towards post-industrialism-

For Africa to prosper in the future, Africa itself must leapfrog that range of products that can be produced more inexpensively by the Chinese [or Vietnamese for that measure]. The model here [presented by the authors] is SASOL with its advanced fuel technology. It is a daring vision and provided we resist the new, left inspired drift to Chavez style 'new Socialism', under a future more 'populist' premier it may just come off, and anyway if we don't take our shot then we are truly doomed to trade minerals and sheepskins for the luxuries of life.

Mugabe on the other hand has done the 'doom' thing. He has decided that Development is an ignoble dream and a fantasy and he has opted out of modernity and is retreating back to the strategy of his seventeenth century forbears after they had evicted the Mozambiquans [aka white Portugese in those days] [circa 1650 AD after the famous 'Battle of Christmas Day' for those who are interested] and may yet evict the Chinese some eight or ten years from now.

Mugabe's 'big idea' is that Africa is terminally commoditised: so drive out all the 'superfluous' people. Then, allow those who don't go to die off from untreated disease- what various commentators have recently described as 'genocide by stealth'. Then grab all the sweetest growing places, hunker down and sit out the modern age until global warming brings the whole global house of cards tumbling down, or until the north pole melts or the next band of colonialist arrive to mess with reality: whatever.

The authors of 'Scramble for Africa' present a rosy hypothesis that Africa will somehow be a beneficiary of the new Chinese factor on planet earth- So far the signs are the familiar ones. Mugabe seems to have decided that 'all things being equal' the aspirations of his particular clique are caught in a time warp between the ultra-snotty Anglos and the super workaholic, haughty Chinos and the best thing to do is to retire from the game, sit op die plaas, and trade Chinese rice grown in Zim for 'I love Zim' tee shirts made in China.

The authors don't seem to have considered that by their own thesis China is our [African] deadliest competitor in almost our every field of economic excellence, and because of their well known ruthless disregard for human rights they can under-price us in every field where we do not have some unique added-value advantage to give us an edge- and anyone with the slightest understanding of the Product Life Cycle concept that is at the core Michael Power's thesis, as presented in those two excellent chapters 2& 3 [the heart of their book], will know that- advantage is a brief flung thing.

It once took a few thousand years for the knowledge of iron working to spread so widely as to render bronze weapons obsolete. Recently Stephen King proved empirically with his Internet 'book' [product] 'The Plant', that a product's life cycle from launch to commoditised death could be as little as three hours and dropping.

I see little real advantage to Africa from this present love affair with China. I see plenty of advantage for China. [ I also have some reservations about China's ongoing capacity to handle this interminable period of expansion but that is not going to help us] Economic reality suggests that the terms of trade have remained constant for millennia. Primary products such as agricultural goods, mined minerals, logs, enjoy a lower return than secondary goods produced in factories and other production facilities and value added products, branded goods and services yield a greater return on capital employed as a rule than that on primary goods and even than mass produced commodity goods.

The exceptions to these rules are usually derived from some form of artificial monopoly imposed through some form of authority and are not valid in a global market place where skills and capital are mobile and synthetics can trump natural resource monopolies such as the increasingly marginalised OPEC.

The primary producer who remains rooted in the primaries is doomed to despair in an evolving world notwithstanding the brave argument proposed by the authors. What we see currently is Chinese traders not Chinese industrialists although that may well come later [and of course we do have industrialists from that other rapidly emerging giant on the world economy India-. According to various outraged press reports Mittal Steel is not being nice to the local industry-. Oh really!]

It was the emergence of a huge and growing Industrial class in Australia and Argentina that generated the industrial expansion of those regions. Our need in Africa is to leapfrog into the post-industrial age or we shall have nothing to sell to the Chinese other than manganese, platinum, copper and gold. They may even be making BMW's for less than we currently sell them in Australia.

What bothers me most about this love affair we are experiencing with the rising eastern hegemon is that 'they' seem to be following a seriously thought out plan that doesn't measure time the way we do. We however are running out of electricity because it takes us too long to act and too long to choose a course of action.

The recent series of violent assaults on citizens of Somali extraction in parts of our country is not a happy harbinger of how tolerant incumbent opinion will be once a 'tipping point' occurs and the newcomers become overtly noticeable and local unemployment fails to decline from its presently high levels.

In the auld days one heard the mantra- 'Beware of Greeks bearing gifts' [why Greeks? Who knows?] Perhaps a new interpretation for African success should go: 'beware of Chinese fortune cookies'.

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