Skip to main content
SpringerLink
Log in

Part of the Disease Or Part of the Cure? Chinese Investments in the Zambian Mining and Construction Sectors

  • Original Article
  • Published:
The European Journal of Development Research Aims and scope Submit manuscript

Abstract

China's role in African development is much debated among academics as well as among private sector organisations, trade unions and politicians. Notwithstanding the recent upsurge of interest, the lion's share of the current studies on ‘China in Africa’ is still based on a combination of aggregate figures and sporadic information from news agencies. Although much of the hysteria surrounding the ‘China in Africa’ debate has now evaporated – at least from the scholarly debate – the local debate is highly politicised and of a very dichotomous nature: China is either seen as benign or malign to African development efforts. This paper seeks to go beyond this dichotomous view by examining the multifaceted nature of Chinese investments in two sectors of the Zambian economy. It argues that these investments to a large extent resemble other foreign investments but the sheer size and growth of the investments trigger local reactions.

Le rôle de la Chine dans le développement en Afrique fait objet d’un débat ardent, non seulement aux Etats Unis et en Europe mais également prend de l’ampleur en Afrique. Ce débat ne se limite pas aux écrits universitaires mais concerne aussi des organisations du secteur privé, des syndicats et des hommes politiques. En dépit de cet intérêt croissant, la plupart des études actuelles sur ‘la Chine en Afrique’ sont encore basées sur de statistiques agrégées et d’informations sporadiques en provenance des agences de presse. De plus, le débat est dichotomique: les activités de la Chine sont perçues comme ayant des effets soit positives, soit négatifs sur les pays africains. Cet article cherche à dépasser cette vision en examinant les multiples aspects des investissements chinois dans deux secteurs de l’économie zambienne. Il cherche ainsi à contribuer à notre compréhension des conséquences domestiques de la présence de plus en plus importante de la Chine en Afrique.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Research for this paper has been funded by the Consultative Research Committee for Development Research, Denmark (project 104.Dan.8-932).

  2. Initially, Sata's campaign not only targeted Chinese businessmen in Zambia but also Indian and Lebanese businessmen. However, as the Chinese ambassador to Zambia was the only official spokesman involved who reacted to the attacks, Sata's crusade on foreign investors quickly became synonymous with a crusade on Chinese investments.

  3. Figures vary a lot: Although Schmidt (2008) estimates that more than 200 shops in Kamwala – one of the three main markets in Lusaka – are owned by 50–80 Chinese businessmen, Konings (2007, p. 20) claim that ‘… the Chinese trading community in Lusaka has grown to about 30 000’.

  4. The most famous incidents are the explosion at the Beijing General Research Institute of Mining and Metallurgy (BIGRIMM) plant that killed roughly 50 Zambian employees in 2005 and the killing of two Zambian employees during a strike at the Non-Ferrous Company Africa (NFC-A) (a subsidiary of China Nonferrous Metal Mining (Group) Co., Ltd.) in 2006.

  5. Although data is readily available on the number of for instance Canadians in Zambia, data on the number of Chinese in Zambia is classified (telephone interview, Ms Mutiti, Chief Immigration Officer, Lusaka, 200 208).

  6. Owing to the politicised nature of these issues all representatives of Chinese firms were promised anonymity. Therefore, only the position of the interviewee, the type of enterprise, the location and the date of the interviews are disclosed.

  7. Meanwhile, several foreign companies divested from Zambia because of fierce competition from imported goods (including from China) (Muuka, 1997).

  8. Note that FDI figures provided in Table 1 are estimates of all investments whereas figures in Tables 2 and 3 only include investments approved the Zambia Development Agency.

  9. Not all investments are licensed by the ZDA. Major investments, for instance in the mining sector, can by approved by the Ministry of Mines and Mineral Development. Moreover, not all investments approved by ZDA are necessarily realised.

  10. Statutory Instrument No. 65 of 2007. Further statutory instruments (No. 27 of 2007 and No. 6 of 2008) prescribe priority sectors of the MFEZ.

  11. Two other areas have been earmarked for MFEZs: one next to the Lumwana mine in Northwestern Province and another in Ndola in the Copperbelt.

  12. At the time of the second fieldwork in the autumn of 2008, eight Chinese companies were registered in the ZCCZ, including the NFC-A, four subsidiaries of NFC-A and three other companies. The aim is, by 2011, to reach 50–60 companies in the ZCCZ that also aims to provide housing for Chinese as well as Zambian staff.

  13. The renewed interest in Zambia manifested itself in several high raking political visits to Zambia in the second half of the 1990s. These visits included Vice Premier Zhu Rongji (1995), State Councillor and the Secretary General of the State Council Luo Gan (1996), Premier Li Peng (1997), Vice Chairman of the Chinese People's Political Consultative Conference Chen Jinhua (1998) and Foreign Minister Tang Jiaxuan (1999).

  14. Following numerous difficulties the ZCMT (temporarily) closed down in 2006. Both governments have worked intensively on a suitable model for re-opening the company and in March 2009, it was announced that the governments had resolved the problems and that the textile company will indeed reopen (Fibre2fashion (2009); interview Mr Ni, Chinese Embassy, Lusaka 061 108).

  15. The mining related investments in ZCCZ will most likely magnify this trend for Chinese investments.

  16. The Zambian economy is often portrayed as essentially dual (cf. Burdette, 1988), but close scrutiny of the economy shows that close economic, political and cultural links exist between the urban mines and the rural hinterland (Ferguson, 1999; Larmer, 2006).

  17. Haglund (2008) provides an account of the corporate governance issues of the Chinese-owned mines in the Copperbelt, Fraser and Lungu (2007) compare the operation of the Chambishi mine with other foreign-owned mines in the Zambian Copperbelt, and Lee (2009) offers insight into labour relations in the mine.

  18. It should be noted, though, that Fraser and Lungu (2007) argue that the Chambishi mine operates differently from the other mines is certain key aspects.

  19. In July 2008, just before the outbreak of the current global financial crisis, Copper prices on the London Metal Exchange reached $9000/tonne increasing from $2500/tonne in the beginning of 2004. At the end of 2008, prices had fallen to just less than $3000/tonne, but is slowly recovering now and by April 2009, prices stood at $4500/tonne (www.lme.co.uk).

  20. According to UN COMTRADE data, Zambia in 2007 exported copper (ores, slag and ash) worth $45 million to China decreasing from $160 million in 2006 but increasing from $9 million in 2005 and $3 million in 2004. In 2007, this made South Africa the largest importer of copper from Zambia followed by China whereas in 2006, the situation was the reverse.

  21. Apparently, a new business is emerging for the Chinese traders. Not only do they source concentrates from the established mines, they also buy slag heaps collected from former mines, which can be reprocessed thanks to more efficient processing techniques (Burke et al, 2007).

  22. In order to bid for tenders at the Zambia National Tender Board (ZNTB), construction companies have to be members of both the National Council for Construction (NCC) and the Association of Building and Civil Engineering Contractors (ABCEC). All public procurement in the construction sector, but World Bank financed projects, are governed by the ZNTB.

  23. Approximately three quarters of the 1700 registered contractors in NCC belong to Grade 5 and 6 (interview, Mr Kaonga, NCC, Lusaka, 051 108).

  24. To get a better understanding of the working of the Zambian construction sector, NCC recently undertook an investigation of a bid for tender. In this particular case, eight of the 12 companies bidding were Chinese and in all eight cases bid bond security came from BOC (interview, Mr Mwape, NCC, Lusaka, 250 208).

  25. The tendency towards a more nuanced perception of China's engagement with Africa, however, is not yet reflected in the media. According to Mawdsley's (2008) study of articles in major British newspapers, media accounts are still problematically partial in their account of the impact of Chinese engagement in Africa.

References

  • ACCZ. (2006) Membership List. Lusaka: Association of Chinese Companies in Zambia (mimeo).

  • Africa Res Bull Econ. (2007) Zambia. Record FDI. Africa Research Bulletin, Economic, Financial and Technical Series 44 (11): 17627.

  • Bastholm, A. and Kragelund, P. (2009) State-driven Chinese investments in Zambia: Combining strategic interests and profits. In: M.P. van Dijk, (ed.) The New Presence of China in Africa: The Importance of Increased Chinese Trade, Aid and Investments for the Sub-Saharan Africa. Amsterdam, The Netherlands: Amsterdam University Press.

    Google Scholar 

  • Burdette, M.M. (1988) Zambia. Between Two Worlds. Boulder, CO: Westview Press.

    Google Scholar 

  • Burke, C., Corkin, L. and Tay, N. (2007) China's Engagement of Africa: Preliminary Scoping of African Case Studies. Angola, Ethiopia, Gabon, Uganda, South Africa, Zambia. Stellenbosch, South Africa: Centre for Chinese Studies, University of Stellenbosch.

    Google Scholar 

  • Dobler, G. (2008) Solidarity, xenophobia and the regulation of Chinese businesses in Namibia. In: C. Alden D. Large and R. Soares de Oliveira (eds.) China Returns to Africa. A Rising Power and a Continent Embrace. London: Hurst & Company, pp. 237–256.

    Google Scholar 

  • EIU. (1996) Country Profile Zambia 1996–1997. London: The Economist Intelligence Unit.

  • EIU. (2005) Country Profile 2005. Zambia. London: The Economist Intelligence Unit.

  • EIU. (2007) Country Profile 2007. Zambia. London: The Economist Intelligence Unit.

  • Embassy of PRC. (2007) List of major Chinese companies invested in Zambia. 12 June, http://zm.mofcom.gov.cn/aarticle/catalog/zgqy/200703/20070304415056.html.

  • Ferguson, J. (1999) Expectations of Modernity. Myths and Meanings of Urban Life on the Zambiam Copperbelt. Berkeley, CA: University of California Press.

    Google Scholar 

  • Fibre2fashion. (2009) Mulungushi textiles to be reopened after technical evaluation. 31 March, http://www.fibre2fashion.com/news/textiles-company-news/newsdetails.aspx?news_id=70763.

  • Fraser, A. and Lungu, J. (2007) For Whom the Windfalls? Winners & Losers in the Privatisation of Zambia's Copper Mines. Lusaka: Civil Society Trade Network of Zambia, http://www.minewatchzambia.com/reports/report.pdf.

  • Gill, B., Morrison, J.S. and Huang, C.H. (2008) China-Africa relations: An early, uncertain debate in the United States. In: C. Alden, D. Large and R. Soares de Oliveira (eds.) China Returns to Africa. A Rising Power and a Continent Embrace. London: Hurst & Company, pp. 167–180.

    Google Scholar 

  • Haglund, D. (2008) Regulating FDI in weak African states: A case study of Chinese copper mining in Zambia. Journal of Modern African Studies 46 (4): 547–575.

    Article  Google Scholar 

  • Haugen, H.Ø. and Carling, J. (2005) On the edge of the Chinese Diaspora: The surge of baihuo business in an African city. Ethnic and Racial Studies 28 (4): 639–662.

    Article  Google Scholar 

  • Konings, P. (2007) China and Africa in the era of neo-liberal globalisation. Codesria Bulletin (1 and 2): 17–22.

  • Kragelund, P. (2008) Knocking on a wide open door: Chinese investments in Africa. Paper presented at the Mine Watch Zambia Conference: Politics, Economy, Society, Ecology and Investments in Zambia; 19–20 September, Oxford University.

  • Larmer, M. (2006) The hour has come at the pit: The mineworkers’ union of Zambia and the movement for multi-party democracy, 1982–1991. Journal of Southern African Studies 32 (2): 293–312.

    Article  Google Scholar 

  • Larmer, M. and Fraser, A. (2007) Of cabbages and king cobra: Populist politics and Zambia's 2006 election. African Affairs 106 (425): 611–637.

    Article  Google Scholar 

  • Lee, C.K. (2009) Raw Encounters: Chinese Managers, African Workers and the Politics of Casualization in Africa's Chinese Enclaves. Los Angeles: Institute for Research on Labor and Employment, University of California. Paper Lee14.

  • Mawdsley, E. (2008) Fu Manchu versus Dr livingstone in the dark continent? Representing China, Africa and the West in British broadsheet newspapers. Political Geography 27 (5): 509–529.

    Article  Google Scholar 

  • Muneku, A. and Koyi, G. (2007) The Social Economic Impact of Asian FDI in Zambia. A Case of Chinese and Indian Investments in the Extractive Industry in Zambia (1997–2007). Lusaka, Zambia: Friedrich Ebert Stiftung.

    Google Scholar 

  • Muuka, G.N. (1997) Wrong-footing MNCs and local manufacturing: Zambia's 1992–1994 structural adjustment program. International Business Review 6 (6): 667–687.

    Article  Google Scholar 

  • Muyakwa, S.L. (2007) Chinese Economic Activities in Zambia, Malawi and Mozambique. Lusaka, Zambia: Civil Society Trade Network of Zambia, Malawi, Economic Justice Network and Economic Justice Coalition of Mozambique.

    Google Scholar 

  • Mwanawina, I. (nd) A Critical Assessment of Chinese Development Assistance in Zambia. Background paper. Mimeo. African Forum and Network on Debt and Development.

  • Naím, M. (2007) Rogue aid. Foreign Policy 159 (March/April): 95–96.

    Google Scholar 

  • Patey, L.A. (2007) State rules: Oil companies and armed conflict in Sudan. Third World Quarterly 28 (5): 997.

    Article  Google Scholar 

  • Sautman, B. and Yan, H. (2007) Friends and interests: China's distinctive links with Africa. African Studies Review 50 (3): 75–114.

    Article  Google Scholar 

  • Schmidt, A.R. (2008) The anti-chinese tide in urban Zambia. Master thesis, University of Aarhus, Aarhus.

  • Streifel, S. (2006) Impact of China and India on Global Commodity Markets. Focus on Metals & Minerals and Petroleum. Washington DC: World Bank, Development Prospect Group.

    Google Scholar 

  • Tangri, R. (1993) Foreign business and political unrest in lesotho. African Affairs 92 (367): 223–238.

    Google Scholar 

  • Taylor, I. (1998) The evolution of Zambia's relations with China. Africa Insight 28 (1/2): 47–52.

    Google Scholar 

  • Taylor, I. (2006) China and Africa. Engagement and compromise. London: Routledge.

    Google Scholar 

  • Taylor, S.D. (2007) Business and the State in Southern Africa – The Politics of Economic Reform. Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • Times of Zambia. (2001a) Screen investor, ZIC told. Times of Zambia, July, pp. 24–27.

  • Times of Zambia. (2001b) Zambia seeks special treatment. Times of Zambia, July, pp. 19–23.

  • Ying, H. (2007) A comparative study of China's foreign aid. Contemporary International Relations 17 (3): 81–93.

    Google Scholar 

  • ZNBC. (2008) I was misunderstood – Sata. Zambia National Broadcasting Corporation, 9 October, http://www.znbc.co.zm/media/news/viewnews.cgi?category=13&id=1223479036.

Download references

Acknowledgements

I am grateful for comments by Peter Gibbon, Stefano Ponte and two anonymous reviewers. The usual caveats apply.

Author information

Authors and Affiliations

  1. Department of Society and Globalisation, Roskilde University, Denmark

    Peter Kragelund

Authors
  1. Peter Kragelund
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kragelund, P. Part of the Disease Or Part of the Cure? Chinese Investments in the Zambian Mining and Construction Sectors. Eur J Dev Res 21, 644–661 (2009). https://doi.org/10.1057/ejdr.2009.23

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/ejdr.2009.23

Keywords

Search

Navigation