Erwin Marquit:
Despite our positive view of China's socialist-oriented market economy, we should not be blind to the possibility that an imperialist character can emerge from its foreign investments if the CPC does not consciously take measures to counter it. See how this is problem emerges on China-Wire, a Chinese News Service that provides news about China's economic development. http://china-wire.org/?p=16823. I reproduce the text below:
China’s Harsh Squeeze in Zambia’s Copper Belt
A tense link between a copper mine strike and Zambia's new president is troubling Chinese companies.
A rhetorical U-turn by Zambia's new President Michael Sata recently brought at least some relief to Chinese investors rattled by strikes and his anti-China campaign speeches. But Chinese companies in Sata's resource-rich country - including mining, power plant and construction concerns - remain seriously challenged in the face of Zambia's fluid business conditions, labor relations, public sentiment, and an awkward political environment.
"My dear Chinese brothers and sisters, Zambia welcomes you," Sata declared at an October 26 luncheon in Lusaka for more than 100 Chinese business leaders. "Because we are all-weather friends."
For several months before the luncheon, and during his successful campaign, Sata's harsh criticism of Chinese businesses put investors on edge. His outspokenness strained executive nerves at hydroelectric plant builder Sinohydro Group, general contractor Jiangxi International and several mining companies with Zambian investments worth billions of yuan. Fresh in mind at the luncheon was an acrimonious, two-week strike by workers at a copper mine owned by NFC Africa Mining Corp., a subsidiary of government-owned China Nonferrous Metal Corp., that had ended just a week before. Today, Sata calls himself a friend of Chinese business. He's also promised to work with Chinese investors to boost economic development in his country all through his five-year presidential term.
Some Chinese business leaders working in Zambia and interviewed by Caixin say they're not entirely sold on Sata's apparent change of heart. Yet for now, they're willing to stay in Zambia. They're also trying to ascertain the president's - and his people's - true attitudes toward Chinese companies. And in the wake of the latest NFCA strike, every foreign mining company in Zambia is now waiting to see whether Sata will adjust the nation's labor laws, minimum wages, corporate taxes and state shareholdings in ways that affect their bottom line. Caixin also interviewed Sata for his views on how Zambia can balance economic development and foreign investment. He hinted that Chinese companies may not be permanent fixtures in his country.
"We do not possess some specific skills, for which we need help from foreigners," he replied. "At the same time, we're eager to become self-reliant.
"If you understand that African education is still very backward, this is not a question of a choice between foreigners or self-reliance," the president said. "If we can do it ourselves, there is no need for foreigners."
Copper Crisis
The October walkout at NFCA's Chambishi mine by about 2,000 workers was the longest ever for a Chinese company in Zambia, and came at a time of political tension following Sata's inauguration. The antagonism between the unionized miners and company managers was so great that it pulled the new president into the fray.
Sata was elected September 22 after he stoked Zambian hostility toward Chinese investment throughout his campaign. Indeed, he ran on a platform that openly opposed Chinese investment, and called for improved working conditions at Chinese-owned businesses. So emotions were running high when the Chambishi miners struck, demanding higher pay and better conditions. NFCA and miners' union officials told Caixin the strike broke out without warning.
NFCA executives were uncertain about what to expect next, given the political climate. They felt like "a lone boat on the ocean being tossed about in a fierce storm," said a company insider. "An extreme situation could have occurred at any moment. "We prepared for the worst - being expelled from Zambia - in which case all the money invested over the years would be gone." NFCA, China's biggest miner in Zambia, has sunk about US$ 1.4 billion into its copper facilities - an amount that eclipses all other Chinese financial interest in this landlocked country. Since 1964, when Zambia won independence, some 300 Chinese concerns have invested a total US$ 2 billion.
The company bought Chambishi for US$ 80 million in 1998, and to date has earned about US$ 200 million, all of which the company says it has reinvested at the site.
Industry sources said China indirectly or directly is the final destination for most of Zambia's copper output, which totaled about 800,000 tons last year. Zambia is Africa's largest and the world's fourth-largest copper-producing country.
The Chambishi purchase 13 years ago was the first overseas non-ferrous metal mine buyout approved by the Chinese government. NFCA started work at the site in 2000, and three years later started churning out ore. The company expects to produce 25,000 tons this year. The operation turned profitable in 2005, following a US$ 160 million investment. The company plans to invest another US$ 800 million at a neighboring pit. On the 12th day of the strike, NFCA management announced that Chambishi workers who refused to return that day would be dismissed. They were also given 48 hours to appeal if they want to return to the job. NFCA Chairman Tao Xinghu said the threat was designed to get workers back into the pits as quickly as possible. According to management and the union, the strike was technically illegal. Zambian law says the two sides can negotiate new contract terms within three months of an old contract's expiration.
But the Chambishi workers struck before contract talks start, demanding a monthly salary hike of about 2 million kwacha, or about US$ 400, from the current average US$ 334. Moreover, according to a worker, NFCA management pledged last March to improving working conditions, but took no action. On October 11, Zambian Mines Minister Wylbur Simuusa began mediating the dispute on behalf of the new president. That led to an agreement signed by two union officials - the chairman and general manager of the Mining Worker Union for Kitwe City - and NFCA President Wang Chunlai. The union promised all workers would return by October 22, and Chambishi's managers promised reinstatements for all. After that, a cooling-off period began during which the two sides were to negotiate salaries.
Many workers were still angry when they returned to work after the strike. They complained Chinese mining companies pay less than others in Zambia, and are run by arrogant, stubborn managers who refuse to listen to dissatisfied workers.
Yet if NFCA would meet all the strikers' demands, the Chambishi workers would be the highest-paid in the industry in Zambia. Wang says that would be unreasonable, given that the mine's ore grade is about 2 percent - below grades found at other mines, which makes extracting from Chambishi costlier.
Wang said Zambia's largest copper miner, Indian-owned Konkola Copper Mines (KCM), averages 20 tons per worker a year, for example, while Chambishi gets only about 70,000 tons. The strike was the third at an NFCA facility so far this year. Earlier disputes occurred in January and March. Altogether, the company said, it's lost one month's production this year, costing about US$ 16.8 million.
Anti-Chinese Slogans
Management wants workers to come to grips with the reality of business conditions for Chinese copper mine companies. In Wang's eyes, that means they should accept the company's pay offer. "Zambia has several dozen mining companies," said Wang. "Our production scale is fifth in the industry, and our salaries are at mid-level, corresponding to our position in the industry." He noted that KCM's average wage exceeds US$ 600 a month. Wang said NFCA is still investing in its Zambian operations and cannot afford to pay workers as much as other foreign mining companies. Yet he admits the dispute seems to be about more than wages. Some strikers shouted anti-Chinese slogans on the picket lines. Others demanded dismissals for Chinese managers, or that NFCA should get out of their country altogether.
NFCA was not the only Chinese company hobbled by labor strife in recent weeks. In September, for example, short-term walkouts were held at Jiangxi International and Sinohydro worksites. Some industry insiders say these labor issues have been politicized amid Zambia's changing political situation. Sata's campaign speeches were peppered with anti-Chinese, anti-Indian, anti-Lebanese rhetoric. Indian and Lebanese companies have also invested heavily in Zambia. Sata once claimed that if elected president, he would expel all Chinese investors. He also campaigned on a promise of "more work and tax cuts, so there is more money in your pocket." It was a slogan that apparently made a deep impression on the public mindset. While the fledgling Sata government has yet to propose a specific policy path for labor, or push for raising the minimum wage and updating labor laws, the nation's workforce seems eager to act, particularly at Chinese job sites.
"Chinese people pay the lowest wages," one mine worker told Caixin. He linked these arguably depressed salaries to speculated corruption involving Chinese businesses and the administration of the nation's former president, whom Sata replaced, Rupiah Banda. "In the past, there was a good relationship between China and the Banda government," he said. "The Banda government was corrupt and didn't listen to us. Now Sata has come to power, and he will help us get back what we deserve."
Meanwhile, Chinese company managers are quick to complain about Zambian workers, labeling them inefficient, lazy, unskilled and disloyal. They also fault them for being unwilling to accept performance-based pay that includes penalty clauses. Zambian workers are aware of these complaints. "We are badly in need of work," said another miner. "But just because you give us work doesn't mean you can exploit us like slaves. Why would we want a job that doesn't pay enough to support ourselves?"
An NFCA executive mused that Chinese companies in Zambia will not find China-like business and labor conditions. And that's troublesome for some managers.
"The Chinese way doesn't work here, and copying it will make trouble." he said. "But I still don't know how to improve labor productivity."
Chinese companies in Zambia are also challenged by communications issues involving their headquarters bosses back home. Some struggle to explain the business environment to people who've never worked in Africa. "We can't apply Chinese standards when making demands of Zambian workers," said another NFCA executive. "But headquarters uses Chinese standards to make demands of us. "We've had several strikes this year, but production targets from headquarters have not changed. When we look at the striking workers outside the window, we get very anxious."
By staff reporters Shen Hu and Han Wei in Zambia.
PA Writers Comment
W.A. Halabi:
Erwin, thanks so much for posting this article. We must face the truth. There have been other developments like this, in Africa and elsewhere, and they can do enormous harm to the real interests of the PRC and the international working class.
One approach I have recommended with comrades from China is -- the PRC government can and should propose development initiatives, such as in Zambia. But the trade unions should weigh in on the proposal, from the point of view of protecting workers' interests, both of Chinese and Zambian workers laboring in the project, and in consultation with Zambian unions if they exist. Environmental organizations must also be consulted. And the Party should weigh in from the point of view of the historic and general interests of the working class, in consultation with the Zambian party, if there is one.
The PRC government should abide by the principles of non-interference. The labor unions and the Party must be guided by the interests of international class solidarity and unity. State policy needs to emerge from discussions between government, unions and party.
A proposed Zambia project may then proceed, or it may not. Achieving balance between domestic development and other tasks, including union, equality and international labor solidarity tasks is very difficult but essential.
This approach is outlined in 'Checks and Balances after a Socialist Revolution' and 'Understanding China and its Unions', both published in PA (the former in a print issue as well as on line, the latter in an editors' blog in Nov.2011).
In solidarity
Norman Markowitz:
This is interesting and I agree with Wadi in thanking Erwin for posting it to us. But, not knowing too much about Zambia, my question would concern SATA--even though there may be legitimate grievances is he a political adventurer, attacking Chinese and Indians in his campaign. Generally, many of my friends, while critical of Chinese economic involvement in Africa, see the Chinese so far giving African nations a better deal than European companies, but there actions conform to capitalist relations, since if they didn't they would see profit margins drop, and that is the crux of the matter. The question is this--can the PRC play a role in limiting its firms exploitation of foreign labor, advancing policies that aid foreign workers on the grounds that this is in the interests of the PRC in preventing foreign workers from reducing the value of Chinese labor and also in providing foreign workers with greater purchasing power to purchase Chinese goods.
Gary Hicks:
comrades
this is an interesting thread, one very well posting to pa at some point.
however, i would like to see us place such discourse in the context of a bigger and central reality....that of the g-2 collusion/contention, becoming more heatedly contentious thanks to our capitalist-serving government.
as a political journal, we need to be giving political, theoretical, ideological, and perhaps organizational clarity to the question of china and ourselves. and we need to be combatting the anticommunist and xenophobic offensives against china, understanding that this is a dimension of defending our class and our party.
so let's keep up this dialogue, but let's not for a moment forget who is our real enemy. and let's not overlook the real consequences of china no longer being socialist...it will make the events of 1989-1991 look like a picnic.
John Case:
I submit the following for consideration:
Gary Hicks:
two points for consideration, in response to john's points for consideration....
1. if you put aside [but not eliminate] point 5, john's points for consideration make a lot of sense. and we should do some discourse, in fact lots of discourse.
2. point 5 is a separate-but-necessary discussion. however, IM[not-so]HO, it adds nothing to the other eight points that john makes.
J. Thomas Riggins:
What is "socialist-oriented" about the Chinese relation to the Zambian workers? It seems that there is more than a possibilty that the Chinese are exibiting imperialist characteristics if the China-Wire story is any indication.
Emile Schepers:
There are complaints about Chinese enterprises in other places also. If I am not mistaken, the oil strike in Kazakhstan is directed against a Chinese firm. But at the very least, Chinese investment, competing with the investment of the US, Euro zone, Japan, S. Korea etc. could give poor African (and other) countries some leverage. Unfortunately, with opportunists like this Sata seems to be, the leverage may not accrue to the benefit of the toiling masses, but only to the ruling elites. I will write more later, but let me just mention that I have recommended to our International Dept that we have in the near future a teleconference on AFrican developments. We will keep everybody posted on that idea.
Norman Markowitz:
Phil Amadon:
Dear Brothers and Sisters,
Taken together the sign posts for a "bare minimum" dictatorship of the proletariat not involved directly in an acute war situation: 1.) A party in power that actually represents the real majority of the active working class and controls the commanding heights of the economy and the force component of the state. 2.) The workers party must, raise the standard of living of the masses in practical ways in a relatively short time. 3.) A solid real alliance must be built between the working class and its allies that relies in an ever increasing ways on persuasion based on improvements to real lives rather than "paper fulfillment" of quota's. 4.)Socialism can only win over decades by proving it is better in real life terms to the majority of the population. 5) The forces who wish to restore capitalism can only be defeated, except in the case of armed revolt, by democratic and economic struggle and competition, education, persuasion, culture and science. 6.)Workers power only stays "worker" by the growth of measurable, easily felt and believed growth in reality based socialist democracy where "every cook" is actually starting to "run the state,' and there is a real growth in independently verifiable democratic rights.
China's abstraction...socialism, capitalism, or otherwise... is largely in the minds of romanticists, from which marxists of all stripes contribute a significant quorum.
Concretely, China is a socialist country of six decades duration in a civilization of five millenia, at least two of these under feudalism, and about a hundred and ten years of imperial subjugation. Their ruling class is proletarian, largely in high tech[thanks to Jiang Zemin, following on policies initiated by Jiang Zemin], and their party...Communist...is in constant argumentation over what works in their world, to enrich the country, bring their people to middle-level development [think some hybrid of Singapore-Canada-Sweden] by 2050. And they are in full state-owned control of the commanding heights of the economy.
As a country engaged with the entire global economy, China engages in trade. the difference between between China and the capitalists is that with China, African nations are not subjugated to a colonial/neo-colonial mother country. Nor do the Chinese make economic, political, ideological demands on their trading partners. Now this doesn't mean that there won't be corruption and exploitation here and there. Even largely here and there. But China's school of international practice is governed by the Bandung Conference of 1955, not the Berlin Scramble For Africa of the 1880s......a fact that upsets the imperialists of the world to no end, and the basis for major drama between China and the US.
We need to keep these things constantly in mind as we whistle "Which side are you on?" in the dark corridors of our Wilderness of North America.