Algerian shopkeeper Abdelkrim Salouda has witnessed China’s global economic expansion first-hand and he does not like it, especially since he was in a mass brawl this month with Chinese migrant workers.
“They have offended us with their bad behavior,” said Salouda, a devout Muslim who lives in a suburb of the Algerian capital. “In the evening ... they drink beer, and play cards and they wear shorts in front of the residents.”
From Africa to Europe, the Middle East and the US, China’s drive to project its economic might abroad can sometimes breed fear and resentment.
The risks are likely to grow as Beijing channels more of its foreign exchange reserves, which stood at US$2.13 trillion at the end of June, into foreign investments.
From having a handful of tiny investments abroad less than two decades ago, China has grown to the world’s sixth-biggest foreign investor and overtook the US as Africa’s top trading partner last year.
That breathtaking rise has brought problems: allegations from emerging countries that China is stripping them of resources and suspicions in the developed world that obscure state interests lurk behind Chinese investments.
Where governments welcome Chinese investments for the boost they bring to their economies, a widely perceived Chinese tendency for Chinese firms to import their own workers has created tensions with job-seekers.
“It’s very new, it’s very big, it’s full of potential hazards, it’s also full of potential benefits,” said Kerry Brown, senior fellow at Britain’s Chatham House think tank.
The challenge of how to deal with such tensions will only be magnified as the global slowdown prompts Beijing to pump even more of its foreign exchange reserves overseas.
China used to be content to keep its surplus dollars in the bank or in US government debt. But the financial crisis and subsequent downturn have, in some quarters, shaken faith in the strength of the dollar and US Treasuries. With China still needing to secure access to global resources, some Chinese policy-makers are talking about redirecting billions of dollars into overseas investment instead.
The resentment felt by the Algerian shopkeeper toward his new Chinese neighbors is not universal: people in many places welcome the benefits from Chinese investment.
Those can include aid with few strings attached, capital for infrastructure that Western donors will not fund and competition that drives down prices.
Despite the clashes in Algeria’s capital this month, its government welcomes Chinese investment.
A US$9 billion minerals-for-infrastructure deal is presented by Democratic Republic of the Congo (DR Congo) President Joseph Kabila as a cornerstone of his plan to rebuild the DR Congo after years of war. China will build roads, schools and hospitals in exchange for mining rights. In Guinea’s capital, Conakry, the Chinese government is building a 50,000-seat sports stadium as a gift.
“We are very satisfied with our cooperation with China,” Republic of the Congo President Denis Sassou-Nguesso said on a visit to a hydro-electric dam being built by Chinese contractors.
“Contrary to certain assertions, it’s not just Chinese on the various construction sites, there are also numerous Congolese workers,” he said.
But in some countries, it is the sheer size of the Chinese presence that causes tension.
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