Just had an interesting conversation with a white Zimbabwean shipping manager in Harare. He told me some of the white farmers who were thrown off their farms by Mugabe in 2002 have come back and are planting tobacco under contract for Chinese companies, which provide seeds and technical support. Would be interesting to know if anyone has done any reserach on this.
An article in Hefei Evening News profiles one of four “peasants” from the city of Fuyang 阜阳, Anhui, who, in January, signed an agreement with Burma’s Special Region 2, under the control of the United Wa State Army, to rent 8,000 acres of farmland (the duration is not specified in the article) to plant rubber and tea and raise livestock. The total investment is 3 million yuan. The man, 47, is called Han Dajun 韩大军, “Han Big Army.” Another fitting name after that intrepid pioneer of Chinese farming in Africa, Liu Jianjun (Liu Army-Founding).
(Photo from http://worldstory.org)
Han started as a poor peasant but began a small business reselling produce in 1989, and later became a shipping entrepreneur with 5 lorries. In 2009-10, he met some Chinese farmers who were planting rubber in Burma and said it made a lot of money. The agricultural machinery office 农机局 of 颍州区, one of Fuyang’s districts, gave Han a grant of 150 thousand yuan to purchase machinery to take to Burma (see photo).
The article describes the hardships faced by Han and his mates in Burma, and touts him as an example of how that with enough determination, “peasants too can change their fate.”
云南糖网 (Yunnan Sugar Net) has published a feature article on contract sugar cane planting in Kokang, a now-defunct Special Region 1 of Burma’s Shan State. The article does not mention the occupation of the region byBurmese government forces in 2009, and the figures it gives suggest that contract farming has not been affected.
Yunnan’s Zhenkang 镇康 County signed an agreement with Kokang on the joint development of 30,000 mu (2,000 ha) of farmland in 1996 under a Chinese government “opium substitution” subsidy scheme. 13 thousand mu was actuallyplanted, of which 9 thousand with sugar cane. In Kokang’s Minzu Township 民族乡, for example, most of a population of 14 thousand now derive their livelihoods from sugar cane. At current prices, one mu of sugar cane results in 1,900 yuan of net annual revenue. One household made 40,000 yuan last year and bought a car.
The Kokang representative of 镇康南华南伞糖业, a Zhenkang sugar mill, recalls that locals met the — presumably more or less forced — “sugarification” with suspicion. The company provided the cash, seedlings, technology, and management, and collected the crop; the Zhenkang County government “mediated”, and the Kokang government organised the distribution of seedlings and fertilizers. In 2010-11, Kokang sugar cane made up 60% of the cane used by the company’s mill. By March 2010, it had invested 17 million yuan in the scheme, including road construction.
In 2008, at the time of the commodity price boom, two other companies from Zhenkang signed agreements to plant 100 thousand mu of walnuts and rubber, respectively, in Kokang. The article does not mention if these plans are now going ahead. The Zhenkang government also designated an industrial park next to the Kokang border.
As more substantial research is being done on the impact Chinese investment in northern mainland Southeast Asia (I think there are now half a dozen researchers working in northern Laos alone!), so the quality of analysis improves. I recently read several impressive pieces, including two articles by Danielle Tan, based on her dissertation research and published by IRASEC, and one by Kevin Woods on New Mandala. (Tan’s master’s thesis, on the Chinese in Cambodia, was published as a MqVU working paper.) A third new paper, by Mike Dwyer on northern Laos, emphasises the agency, and power gains, of local village elites in and from rubber planting, and criticizes views that interpret this process as erosion of sovereignty.
Tan and Woods agree with Dwyer that Chinese investment does not bring about a territoiral expansion of Chinese state sovereignty, but unlike him, they argue that it in fact reinforces the expansion of lowland (Lao/Burmese) state control. The thrust of the two papers is similar, but Tan elaborates the argument in much more detail. Chinese businessmen, she argues, have very nearly regained the status of tax farmers that they possessed under colonial rule. They provide farmers with seedlings (mostly of rubber palm, but also other cash crops), fertilizer, and access to markets they collect produce and take care of its passage through the Lao-Chinese border, including negotiating payment with customs officials. “By producing rent and new opportunities of redistribution among influential personalities, they contribute to the viability of the state. This alliance of networks thus constitutes a strategy [or the Lao state] to impede the emergence of a counter-elite” in the form of a native moneyed class (p. 16), the same function “middlemen minorities” played under colonialism or Chinese in Indonesia under Soeharto. Thus, Chinese investment and migration helps to render the highlands “legible,” governable and profitable for the lowland state while minimising the risk of new regional centres of power emerging.
A story called 东阳商人境外上演“疯狂的木头” (Dongyang merchants perform in “crazy wood” show abroad), from 金华新闻网 (17 November 2010) has been circulated on China-Wire. I thought it contained a number of interesting details.
The article profiles a furniture manufacturer in Dongyang, near Shanghai, who has invested in a 50-year lease of 150 thousand mu (10,000 ha) of forest in Cambodia via a Hong Kong intermediary, for logging and a subsequent rubber plantation. (The intermediary part is interesting: in my research in Cambodia, I too encountered Hong Kong businessmen, often of Cambodian Chinese origin, acting as brokers/gatekeepers for Chinese investors.)
Presumably, the concession was granted for rubber, but the manufacturer considers the rubber plantation a liability and is only interested in the tropical hardwood that, according to an estimate commissioned from a Shanghai expert, could make up 3% of all timber. Since 2002, prices of certain kinds of hardwood in China have risen 400 times.
The article explains that Dongyang furniture makers used to import hardwood from Vietnam, but the supply dried up both because of exhaustion of resources and a ban by Vietnamese authorities. Importers then shifted to Cambodia, but that supply too has been exhausted. Now 90% of hardwood comes from Africa, but prices are much higher both because of local government restrictions passed under environmentalist pressure and because of rising local wages. (Interesting detail!)
(As an aside, there is a complete ban on hardwood export in Madagascar as of this year, an interesting comment on the relationship between the new government, which came to power after a coup partly driven by opposition to commercial land concessions, and environmental organisations such as the WWF, which also have land concessions in Madagascar, but for conservation purposes.)
Because of these price increases, more manufacturers in Dongyang have sought to go directly to the source instead of buying timber from exporters. One of them secured a 70-year logging concession in Cambodia back in 1997. The one portrayed in the article is also planning to set up a processing factory in Cambodia since costs are lower than in Dongyang.
In sum, the article demonstrates how the desires of Chinese consumers and environmental campaigners produce complex changes on two continents: trees disappear, wages go up, jobs are created, and plantations that perhaps no one really wants spread.
The last of a series of three workshops on China’s engagement in low-income countries under the UK Economic and Social Research Council’s Rising Powers research network programme is about to conclude at the Institute of Development Studies at the University of Sussex in Brighton. This workshop focused on environmental issues. Topics included carbon emissions trading and China’s participation in environmental governance, as well as more down-to-earth issues such as dams and land leases. Some highlights:
Data shown by Yahia Mahmoud (Lund University) suggest that Chinese companies are second only to Korea in the area of land leases, but that most of these leases are in the Philippines. Andreas Wilkes of the International Forestry Research Council cited a figure of 6 million ha leased by Chinese forestry and agricultural companies in Africa, and talked about research conducted at the institute by Cerutti et al. that concluded that European forestry companies not certified for sustainability engage in practices quite similar to Chinese companies, and that locals often felt that their livelihoods were better under non-certified forestry regimes. I raised the point that the different types of new civil initiatives that are emerging in China concerning the environmental impact of China’s overseas engagement — organisations with direct overseas contacts but also looser formations like Minjian International that provide a discussion platform — would be an interesting subject for research.
The workshop were intended to result in the elaboration of cooperative research proposals.
Yesterday I was told by senior researchers at the China Institutes for Contemporary International Relations (CICIR, a think tank producing reports for the State Council) that although Chinese investment in agriculture and small-scale manufacturing could help African development, the central government is reluctant to support it because it does not want to encourage migration, which is hard to control and causes harm to China’s image. But over a month ago, Xinhua reported (Chinese firms told to invest more in Africa, 29 May 2010) that Lu Shaye, director-general of the African affairs department with the Ministry of Foreign Affairs, encouraged Chinese companies to “explore more opportunities in sectors like agriculture and manufacturing, apart from the current focus on infrastructure and energy resources.” Liang Guining, deputy director of the research center for foreign investment under the Ministry of Commerce, also said: “Chinese firms could shift their focus more to sectors like agricultural developments that are much easier to operate and more in line with African countries’ needs.”
After this, a number of articles reported on African officials calling for more Chinese investment in African agriculture.
If this shift is real, then it raises a number of question: Does it reflect a turn away from mining and infrastructure, and if so why? Does it target primarily state companies or does it represent an opening to smaller private enterprises? Will China now embrace the agricultural concession model that it has so far shown little enthusiasm for? What conflicts within the Chinese bureaucracy are behind the arguments for and against this move?
At least part of the background could be lobbying by Chinese agribusiness to allow more room for its overseas ventures to offset the impact of imports from ASEAN countries after the start of the China-ASEAN free trade area. One article that makes this case cites the Chongqing (Laos) Agriculture Combined Zone [重庆（老挝）农业综合园区] as a positive example. The zone received 50 hectares from the Lao government for an experimental demonstration zone, with a promise of a further 5000 ha for a commercial farm as well as special privileges for the importing of equipment, materials, and personnel. This model seems to combine the traditional “demonstration farm” approach with that of non-agricultural special economic zones in Laos and Cambodia, for example the Golden Boten City and Golden Triangle gambling zones. But the article also cites other models, like contract cane farming in Vietnam (where the Chinese partner provides the technology), a “research and experimental coffee plantation” in Champasak, Laos, and the “Hongniu organic agriculture science and technology park” in Bokeo, Laos, both set up by Yunnan Province.