China’s ‘Little Africa’ losing its allure

Chinese wholesale aimed at African consumers in Guangzhou, China.

In a sweltering monsoon afternoon in Xiaobei, in Guangzhou, a city in southeast China, a group of young and middle-aged African men take positions up and down a street lined by shops, alert to the passing of potential clients. Not far from them, in an adjacent street, another group of Africans – three women and a man holding a child in his arms – huddle around bales of merchandise. As the sun slowly sets, the town square fills up with people.

“Welcome to Oversea Trading Mall”, reads a neon sign in front of a midrise building overlooking the square. Posters advertising different products and services are plastered on nearly all surrounding buildings.

This is Xiaobei, also known as ‘Little Africa’, in the central neighbourhood of Guangzhou, China’s megacity, where the Oversea Trading Mall is the main attraction for thousands of sub-Saharan African traders in search of good value merchandise. Guangzhou, nicknamed “Chocolate City” because of the large number of Africans living there, is a megalopolis with a population of 13 million.

Having dragged their bales to the edge of the square, three women and their male companion try to negotiate fare with a taxi driver. Sensing a lack of progress in the negotiations, due perhaps to a language barrier, one of the African men gathered around the porch of a nearby shop steps in to facilitate the transaction.

“This is what we do,” Magloire, an immigrant from Côte d’Ivoire, told Africa Renewal. “We are helping our brothers and sisters with their business needs.” He was reluctant to give his full name.

Like Magloire, hundreds of Africans who live in Xiaobei and its neighbourhood in Guangzhou see themselves as “brokers”.

As the capital city of Guangdong, China’s richest province and arguably its economic powerhouse, Guangzhou is famous for numerous wholesale markets and its annual International Canton Trade Fair.

Inside Xiaobei’s subway stations, on its streets and at the bougainvillaea-adorned pedestrian overpass along the main road, Africans can be found speaking Arabic, Bambara, French, Portuguese, Lingala, Malagasy, Yoruba or Igbo – a reminder of the cultural diversity of this migrant community.

Until about three years ago, Xiaobei bustled with business activity. Wholesale traders from sub-Saharan Africa regularly streamed in.

In the first nine months of 2014, for example, 430,000 people from sub-Saharan Africa entered or left the city’s border posts, according to official Chinese data.

“Booming China-Africa ties attract Africans to pursue dreams in Guangzhou,” declared China Radio International in 2015, summing up the growing movements of population and goods between the southern metropolis and several countries in Africa.

And just three years ago, local media pointed out the economic success of some of the migrants. A quick survey of residents of Little Africa showed that two out of 10 earned over 30,000 yuan (US$4,800 at the time) a month, more than the average monthly income of local Chinese workers. The rest earn less, comparable to the earning of the average local Chinese worker.

But fast-forward to 2016, and Little Africa is losing its shine. “Commodity dip hits China’s Little Africa,” the Financial Times reported in July of that year.

Decreasing trade volume

After reaching $215.91bn in 2014, trade volume between China and Africa declined to $127.97bn in 2016. The trend would be reversed in 2017, with the total amount rising by 14.1% over the previous year. Yet the level remains below the 2014 peak.

Little Africa’s Chinese and African residents feel the pinch of the slump in trade, which has depressed the flow of traders from the continent.

Barry, a Guinean migrant who declined to give his full name, is a part-time student, a part-time electronics dealer and a smartphone repairman, alludes to an overall feeling of slow business. Around him and across the mall, many shops are closed at midday, while those that are open see few customers coming in.

A trader who used to attend to scores of buyers and sellers from Africa cuts a lonely figure arranging her displays of wigs, weaves and hair extensions while waiting for customers who now come in trickles.

Barry, Magloire and other Africans here blame the plight of Little Africa on an economic slump in Angola, Nigeria and Zambia, greater competition from Chinese importers based in sub-Saharan African countries, restrictive visa requirements and police crackdowns on undocumented workers.

“Angolans don’t come anymore,” laments Amadou from Mali. More Angolans than other countries’ nationals used to come to Xiaobei to do business, he explains. But the total number of sub-Saharan seasonal traders plummeted as the Angolans sharply reduced their business trips because of economic recession that led to a dip in demand for imported goods.

Chinese in Africa

Amadou and Barry believe an appetite for cheaper goods is still there in African cities, but decelerating economic growth, even if temporary, has recently tamed local demands. African traders no longer find it cost-effective to travel all the way to China to purchase goods.

The change of fortune in Little Africa is also due to a growing number of Chinese entrepreneurs setting up shops in countries across Africa, the Hong Kong-based South China Morning Post reported in May of this year. The Chinese traders based in Africa benefit from low import duties and levies, which allow them to import from mainland China and to offer cheap goods to local markets.

The South China Morning Post reported the number of Chinese living in Ghana to be between 20,000 and 30,000, several thousand times the number residing there in the mid-1990s. “In just a decade, the flow of economic opportunity between Africa and China is reversing as Chinese entrepreneurs sense greater possibilities offshore and Africans feel the squeeze on the mainland,” the paper remarked.

Local media in China once put the population of Africans living in Guangzhou at 100,000. Then at the height of the Ebola epidemic in 2014, local officials speculated, and the media report too, that up to half a million Africans lived in the city, stoking anxieties. But authorities were quick to debunk those figures, announcing the official number to be about 20,000.

Chocolate City residents routinely lament what they perceive as the heavy-handedness of the police in enforcing immigration laws – another reason for the population decline in Chocolate City.

“While a first-time entry visa is relatively easy to get, renewing the visa once it expires is anything but, compelling many in Little Africa to go underground. Those who overstay their visas are subject to heavy fines and detention if unable to pay.

Those who can enrol in school retain a legal right to remain in the country. “Some of the migrants enrol in school while doing odd jobs on the side,” Komlan Semanu, a West African diplomat, told Africa Renewal.

Barry, the part-time electronics repairman who is also a part-time student, is one example. “I’ll be going to class later in the afternoon,” he told Africa Renewal.

A growing number of Chinese entrepreneurs export directly to local African markets, cutting a big slice of the informal trade pie. And with authorities aggressively enforcing immigration laws, Magloire and other Africans ponder their futures in Little Africa.

Some are willing to ride out the slump and others will likely opt for greener pastures elsewhere. Many residents have set their eyes on Yiwu, a town, two hours by train from Shanghai. Dubbed the world’s capital of small commodities, Yiwu seems more hospitable than Guangzhou to many because, at least, the town is spared of constant police checks.

In sum, an economic downturn in sub-Saharan Africa, an increasing number of Chinese traders moving into the continent, tough enforcement of immigration laws in Guangzhou, among other factors, mean that for Africans in China, Little Africa is no longer the place to be.

This article was originally published by Africa Renewal.