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The deal in Little Africa

Updated: 2013-07-19 12:55
By Todd Balazovic ( China Daily)

The deal in Little Africa

 The deal in Little Africa

Two Africans on Dengfeng Street in the downtown area of Guangzhou. The city is home to more than 30,000 African traders. Zou Zhongpin / China Daily

 The deal in Little Africa

Football players prepare for a game in Guangzhou. Owners FC, founded in 1998, is the longest running all-African football team in the city. Provided to China Daily

The deal in Little Africa

South China's major trading hub is home to more than 30,000 African traders - but for how long?

For the same reason that practically every major capital in the world contains a Chinatown, there are Chinese cities that support an "Africatown". The biggest by far is in Guangzhou in South China.

Also known as Goat City, the Guangdong provincial capital has long been home for Africans with trade ties to the Middle Kingdom.

But today, as trade between China and African countries reaches $200 billion, Guangzhou has become the center of commerce for money flowing back home from Africans in China.

"This is big. It's big for Africa and it's big for China," Festus Mbisiogu, chairman of Blue Diamond Logistics, says of the trade community.

"You see China putting millions of dollars into African countries. Here in Guangzhou, we are bringing millions of dollars of African money to China."

What started out as an exotic location for a few hundred logistics-savvy African entrepreneurs in the 1990s has evolved into a $180-million-per-year business community with traders sending products home to sell on minimal profit margins.

The balance sheets and business equations are a long way from the legend of Guangzhou, that tells of five celestial beings on goats who descended to the mouth of the Pearl River and brought rice to the local people, forever ensuring freedom from famine and prosperity in trade.

While it may be a myth, little known by African traders, and their chances of gaining prosperity may not be that great, there is no denying the life they have injected into China's largest trading hub.

The 12 square kilometers in Guangzhou's Baiyun and Yinxiu districts known as Africatown may be devoid of any distinguishing traditional African architecture, but among the side streets and alleyways 30,000 Africans from about 20 countries ply their craft - some say the number is closer to 100,000 - while living in tight-knit enclaves barely noticeable to the untrained eye.

It's here that traders like Mbisiogu found fortune.

Mbisiogu's start as a merchant began as a teenager on the streets of Lagos where he sold groundnuts and eggs to support his family.

But soon after his move to Guangzhou in 1996, he realized the potential and began setting up services, such as the Blue Diamond Hotel and a customized shipping company, to cater to the influx of African traders in the city.

"Originally, we began in Dubai, but soon realized all of the goods we were buying were coming from China," he says.

"So to avoid having to pay someone else to ship the goods from China, we opened offices, first in Hong Kong, then in Guangzhou."

His gamble and determination paid off and he is now a multimillion-dollar business owner supporting the African merchant community in China and back home, shipping 200 to 300 containers a month back to Nigeria to sell across the continent.

Mbisiogu has found success, but these days many attempting to set up shop in Guangzhou are facing greater pressures.

Working with limited finances on short-term visas, most of the city's traders have one chance at a deal.

At the Tangqi Export Clothes City on Guang Yuan Xi Road, there is a flurry of activity, with shoppers toting around large carts to fill with clothes to ship to their home countries.

Selling only in bulk and mostly to African and Middle Eastern traders, Tangqi is one of three massive markets near Guangzhou's railway station selling clothes directly from the manufacturer, often at less than 60 yuan ($9.80) an item.

"The clothes are cheap and the quality is good," one Ghanaian shopper says, eyeing a rack of Wrangler-branded jeans before moving on to a different stall.

Wandering around with bright fabrics and branded shirts, pants and bags, he says this is his second visit to Guangzhou, but because he is on a tourist visa, he declines to give much information, including his name.

While Chinese residents aren't commonly seen socializing with the city's African expatriates, when it comes to the bargaining table, money transcends all language and cultural differences.

The number of Africans overstaying tourist visas has been the source of much strain between the African community and the local government.

Tensions reached boiling point in 2009 after an African national with outdated documents leapt from a window to avoid police, resulting in protests from the community.

But with efforts from people like Henry Okafor, co-founder of the Nigerian China Window of Trade and Commerce, things have greatly improved.

Following that incident, an agreement with the local government reduced fines for those overstaying visas by nearly half.

"Life here is better than before. For people already living here, it's been easier," Okafor says. "But there is still a lot that needs fixing."

Okafor was among the first wave of those seeking their fortunes in Guangzhou, having spent more than 13 years living in the city and watching it grow.

As one of the more experienced China hands, he has become a pillar of the trading community, acting as part diplomat, part facilitator, keeping the peace while helping business prosper.

"We do many things in our office. We bring in the business complaints from the Nigerians and bring in the complaints from the Chinese and deal with them in a peaceful way," he says.

Five years ago, he adds, more than 80 percent of the city's African community didn't have proper documentation. The number is now closer to half, but still remains a big issue.

"By working with the government to ease visa restrictions, we are trying to make it easier for Nigerians to do business in China," he says.

"But I still don't expect to see anything big until a few years from now. Maybe it will begin to change in 2014 or 2015. I really don't know."

Regardless of the difficulties faced by newcomers to the community, the number of residents in the city is still steadily rising as more settle into roles that allow them long-term stays.

The maximum stay for a foreigner on a Chinese visa is one year, before it must be renewed.

And while Africans have better access to China than to most European countries, neighboring countries such as Vietnam and Thailand are actively seeking to attract traders.

"This is where China must watch out," Mbisiogu of Blue Diamond Logistics says. "If things do not get easier, and prices continue to rise, people will begin seeking to go elsewhere. Already Thailand is trying to attract African business.

"That's millions of dollars potentially lost. Think about it from a businessman's perspective; if he has two or three million to spend, but finds it very difficult to travel to the country, he is going to go somewhere where it's easier."

Signs of slowing growth can already be observed.

By 2010, the number of people traveling to make their living in Guangzhou was growing by 30 to 40 percent each year. Today it hovers around 20 percent.

The deal in Little Africa

Many businesses from Africa looking to cash in on China's manufacturing industry no longer travel to do business. Instead, they take advantage of those already established in Guangzhou who are willing to ship goods back at low cost.

The development of the city's financial services is helping facilitate these shipments.

Once a rarity in the city, the number of money exchanges offering competitive rates on many African currencies and logistics companies advertising cheap transport to Africa has swelled.

Those who have worked in the city for more than a decade have changed from traders operating deal by deal to business owners, with some Africans taking on manufacturing operations around Guanghzou, further cutting out the middlemen.

As access to China's most densely occupied manufacturing region becomes easier, so thousands more across the African continent seek to make their fortunes in China's southern star.

Facilitating those still keen to travel to China, Kenyan Sandra Rwese works on the African side, offering specialized training in Chinese business etiquette.

She launched China Business Trainers in 2008, in the wake of the global economic shockwave, when she realized more than ever that Asia should be a destination for African businesses.

"Initially, I focused on training investment bankers and other corporate professionals on Chinese business etiquette and negotiation skills," she says.

Spurred by the opening of the Confucius Institute in Nairobi in 2007, Rwese partly attributes her commitment to helping people travel to China to her interest in the language.

"I was fascinated by China's rise to global competitiveness through their favorable trade policies and heavy investment in infrastructure development," Rwese says.

"So when my older sister heard the first Confucius Institute was opening in Nairobi, she immediately encouraged me to enroll and realize my intention to acquire Chinese language proficiency."

Those of Africa's future entrepreneurs who are not staying home to study are enrolling in Chinese universities, learning the language while furthering their understanding of how to do business in China.

The Forum on China-Africa Cooperation (FOCAC), with support from the Chinese government, has spent the past four years opening doors to universities for African students.

The 20 Plus 20 project, a program that aims to connect 20 universities in China with 20 in Africa,aims to increase faculty exchanges, scholarships and language training.

The efforts have shown significant results, with 27,052 African students enrolling in Chinese universities in 2012, according to statistics from China's Ministry of Education. In 2003, there were 1,793.

A weeklong visit by President Xi Jinping in March was a strong indicator of the level of importance China is placing on African exchange, from trade to tourism.

"We expect to work together with our African friends to seize upon historic opportunities and deepen cooperation ... in order to bring greater benefit to the Chinese and African peoples," President Xi said during his visit.

For traders in Guangzhou, where there's business, there's also pleasure, and the city has not fallen short for those looking to relax after a frazzling day of striking deals.

Hairdressers offering intricate hairstyles with a range of colors, glowing neon signs for authentic African and Middle Eastern cuisine, and venues touting authentic afro-tunes crowd the streets surrounding Little Africa.

In sidewalk stalls enveloping the bases of towering apartment blocks, citizens of various African nations can be seen sitting enjoying Chinese-style street snacks and sipping large bottles of Tsingtao.

Inside the tower blocks, apartment-restaurants - not entirely legal - offer homestyle fried fish dishes served on spongy sourdough bread, known by Ghanaians as banku.

Beyond the concrete confines of Little Africa, some groups have formed to represent their country on the field of sport.

Embracing the continent's love of football, Owners FC, founded in 1998, is the longest running all-African football team in Guangzhou.

Looking to attract and nurture young footballers, most of the team's 14 players traveled to Guangzhou solely to play the sport they love.

"Our goal is to create friendship and companionship for our fellow Africans living far from their homes, while helping young players advance their skills," says Tony Ifegbo, team manager and CEO of trading company EKAROP International Ltd.

Ifegbo beams with pride when he notes the Owners in 2011 were the first African team to win the Guangzhou International League.

"We had a lot of strong players. Some have since returned home to try and make it in the professional leagues in Africa," he says.

But, as in almost every conversation with Little Africa's residents, the topic drifts back to ease of access to long-term visas, and Ifegbo sighs heavily as he describes the difficulty of getting newly recruited players to play in Guangzhou.

Serious discussions about opening pathways from Africa to China are underway, however.

During the recent visit by Nigerian President Goodluck Jonathan, talks did not center wholly on Chinese projects going to Africa.

Among the five agreements signed between President Xi and President Jonathan was one addressing visa regulations, indicating the issue remains high on the agenda.

In the meantime, those pioneering Guangzhou's trading community will continue seeking fortune, with or without the help of governments, one deal at a time.


(China Daily Africa Weekly 07/19/2013 page1)

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