Wednesday, March 2, 2016

Land and Chinese Private Investment in Kenya: From Real Estate to Agriculture

By Hongxiang Huang, Yin Qiu, Mingxuan Huang
[Editors Note: China House is a client of Cowries and Rice]

Between 2013 and 2014, 35 km from downtown Nairobi, a group of ambitious Chinese investors planned a 300-acre real estate mega investment – City of Harmony. It was going to be the China city of Kenya: stores; factories; residential homes; and offices. Hundreds of Chinese businessmen were the shareholders of this project and investment flooded in from many parts of China. Kenya’s role in China’s One Belt One Road meant that a there were potentially huge profits to be made by early speculators.However, in 2015 this project ended with a lawsuit, and the City of Harmony was gone.

"Li Wenjie, one of the major shareholders and a businessman in Kenya, colluded with locals and committed land fraud of over 20 million rmb [$3.8 million], and he blamed me for cheating the system," said Guo Dong, another major player of this mega project. In his eyes, a Chinese con man is almost worse than a Kenyan one, as many Chinese businessmen trust their countrymen, making them easy to exploit.

To date, Guo Dong and Li Wenjie have not resolved their case in Kenya.

Land deals have translated into overnight fortunes in China. When it comes to Chinese private investment in Africa, real estate follows a similar pattern as it is seen as one of the most profitable investment options. In Kenya, there is a famous story about four elderly Sichuanese Chinese businessmen who, around 2007, came to Kenya to work on a state engineering project. Having realized there was great opportunity for profit, these four businessmen quit their job and each put up 2.5 million rmb [$385,000] to buy a piece of land and develop it into residential housing. They each ended up making 10 million rmb [$1.5 million] from their investment.

This story, dubbed the "Four Chinese Elders Dug Gold in Africa", inspired many other Chinese entrepreneurs to come to Kenya for real estate, which was hugely profitable as land price rose 535% from 2007 through today. Currently, real estate is still one of the hottest destinations of Chinese private investment in Kenya. However, without enough local knowledge and experience, a lot of money is lost as well.

"When we started building the house, some people came to us and said this land belonged to them. More importantly, they presented their deeds, which were as authentic as ours," recalls a Chinese businessman in Kenya who does not want to reveal his name. According to our research, this kind of situation is very common in Kenya.

"Because of a multitude of reasons, problematic land deeds are common in Kenya, and good land titling is crucial," explained Faith Kanaga, a Kenyan lawyer who specializes in land transactions. According to Kanaga and other lawyers, when foreign investors do not understand the local context, it is easy to be cheated by many so-called "brokers", Kenyan and foreigner alike.

"Chinese investors do not have good service channel when they come to Africa, and therefore a lot of times they run into problems. And because there is no good platform to share knowledge, many Chinese investors can run into fraud since they never share lessons learned regarding problematic land titling," said Sherry, a Chinese entrepreneur who has lived in Kenya for over 20 years.

However, despite these risks, Kenyan land keeps attracting Chinese investors.

Mike, a real estate broker in Nairobi, told us that "the Chinese want land plots in Nairobi, and only in prime areas."

As developable land in Nairobi becomes more and more scarce, a handful of Chinese businesspeople have started to look into rural lands as well, but not solely as a real estate investment. According to data from the Food and Agriculture Organization, in 2009, Kenya was the world’s largest grower of pyrethrum, a flower used to make insecticide. However, due to management issues, this industry declined in Kenya in recent years.

"We partnered with Kenya’s Ministry of Agriculture and are aiming to revive this industry," said a Chinese entrepreneur in Kenya who does not want his name or his company to be identified. Today, they are acquiring rural land through partnership with locals, and the lands are producing large quantities of pyrethrum, which will be processed and then shipped to China for further refining.

Beyond pyrethrum, Chinese businesspeople are looking at other opportunities in rural Kenya. For example, Zheng has been cultivating his farm, a one-hour drive north of downtown Nairobi. Unlike many Chinese entrepreneurs who focuses on the city, he believes rural areas host the most profitable new opportunities. Two years ago, he began renting four acres of land and planted Chinese vegetables on them, to test whether they could grow in this foreign soil. Today, his farm has almost dominated the Chinese vegetable supply chain to estimated 40,000 – 60,000 Chinese who are living in Kenya.

"I partner with local farmers, teach them how to grow Chinese vegetables, supply them with seeds, and buy from them when their crops are ready," said Zheng, mentoring his local farmers to harvest vegetables for his customers.

Foreigners are not allowed to purchase land in Kenya, so Zheng partners with locals to make his investment effectively invisible. In his eyes, this saves him a lot of trouble.

“The Chinese have a saying: be quiet and make your money, that is the wisdom” explained Zheng.

Sunday, November 29, 2015

Everything you need to know about FOCAC: Rising Powers

We are continuing to discuss the Sixth Forum on China-Africa Cooperation (FOCAC) for the rest of the month. FOCAC will be held in three weeks, December 4-5 in Johannesburg, South Africa. For historical context, FOCAC was initiated in 2000 in Beijing in order to sketch out a three-year cooperation plan between China and the countries of Africa. Since then, the triennial meetings have alternated between China and an African country. This week, hosts Winslow Robertson and Ms. Lina Benabdallah connect FOCAC to the idea of rising powers: what FOCAC means to South Africa and what these summits do for China as a member of the Global South, the developing world, or whichever nomenclature one may prefer. Joining them is Dr. Sven Grimm, a political scientist who has worked on external partners’ co-operation with Africa since 1999. He is a Senior Researcher and the Coordinator of the Rising Powers program at The German Development Institute (DIE) in Bonn. Since 2006 his research has focused on emerging economies’ role in Africa, and specifically China-Africa relations. He obtained his Ph.D. from Hamburg University in 2002 with a thesis on E.U.-Africa relations. He has previously worked with the London-based Overseas Development Institute (ODI) and was the former head of the Centre for Chinese Studies at Stellenbosch University in Cape Town, South Africa.


Everything you need to know about FOCAC: Security

Note: This episode was recorded live over lunch, and has considerable ambient noise which we were unable to remove.

We are continuing to discuss the Sixth Forum on China-Africa Cooperation (FOCAC) for the rest of the month. FOCAC will be held in three weeks, December 4-5 in Johannesburg, South Africa. For historical context, FOCAC was initiated in 2000 in Beijing in order to sketch out a three-year cooperation plan between China and the countries of Africa. Since then, the triennial meetings have alternated between China and an African country. This week, hosts Winslow Robertson and Ms. Lina Benabdallah examine China-Africa security issues with Amb. David Shinn, who was U.S. ambassador to Ethiopia and Burkina Faso. He is currently an Adjunct Professor of International Affairs at The George Washington University's Elliott School of International Affairs, and co authored China and Africa: A Century of Engagement with Prof. Joshua Eisenman, which was published in 2012 by the University of Pennsylvania Press. In addition, he recently published a non-China-Africa book: Hizmet in Africa: The Activities and Significance of the Gulen Movement.


Friday, November 27, 2015

The Clean Boardroom: An alternative perspective on Chinese corruption and bribery in Kenya

“I am not a racist but…” Mrs. Zhang (pseudonym) begins smilingly. She is addressing me specifically, staring right at my nose. Still, I miss the end of the sentence. I am busy thinking to myself: has anyone ever started a statement that way and finished it gracefully?

If anyone could, it might be Zhang. I like her immediately. She is in her mid-forties, I am told. I would have guessed she is a decade younger. She runs a travel agency and energetically ushers my two colleagues and me into a clean, white boardroom.

I take in the room. A stark, unadorned contrast to the makeshift construction site offices where I often conduct my interviews, their dirt-covered walls collaged with attendance sheets and architecture floor plans. This is almost sterile in comparison. The blank walls shine in the wooden reflection of a large ovular table. A leafy green plant occupies a corner of the room.

We are here trying to make sense of tax-related issues facing Chinese residents in Kenya. She indulges us, explaining – without malice – her difficulties: “It does not matter how clean the records, how carefully they are maintained. When the revenue authority comes to investigate, they will always find a maobing”—a flaw. From Zhang’s perspective, the turbid tax regulations allow wiggle room for opportunistic officers. There is little to be done but pay up, she declares, still smiling.

Wednesday, November 18, 2015

Everything you need to know about FOCAC: Sustainable Development

We are continuing to discuss the Sixth Forum on China-Africa Cooperation (FOCAC) for the rest of the month. FOCAC will be held in three weeks, December 4-5 in Johannesburg, South Africa. For historical context, FOCAC was initiated in 2000 in Beijing in order to sketch out a three-year cooperation plan between China and the countries of Africa. Since then, the triennial meetings have alternated between China and an African country. This week, hosts Winslow Robertson and Ms. Lina Benabdallah hope to discuss how how FOCAC will engage with sustainable development and have three guests from the World Wide Fund for Nature (WWF) Kenya, WWF China, and WWF South Africa respectively to explore the linkages between FOCAC and sustainable development: Jackson Kiplagat is the Interim Policy & Research Lead - Africa for WWF Kenya, Nan Li is Policy Program Manager for China's Green Shift Initiative at WWF China; and Louise Scholtz is Manager: Special Projects: Policy Futures Unit of WWF South Africa. In addition, WWF South Africa recently put up a FOCAC website that is well worth exploring.


Thursday, November 12, 2015

Everything you need to know about FOCAC: Media

South Africa is hosting the sixth Forum on China-Africa Cooperation (FOCAC) this December. FOCAC was initiated in the year 2000 and in Beijing in order to sketch out a three-year cooperation plan between China and the countries of Africa. Since then, the triennial meetings have alternated between China and an African country - and this time, will mark the first instance that FOCAC is held at a summit (instead of ministerial) level in an African country. To discuss FOCAC today as well as its media permutations, hosts Winslow Robertson (and Lina  Lina Benabdallah in spirit) invited Dr. Bob Wekesa on the show. Dr. Wekesa received his PhD in international communications at Communication University of China and is currently a Research Associate at University of the Witwatersrand in South Africa. He is a leading expert on all things relating to China-Africa media, and he actually attending the previous FOCAC in 2012, held in Beijing.


Wednesday, November 4, 2015

More ways to connect with the Chinese in Africa/Africans in China Research Network

The Chinese in Africa/Africans in China Research Network aims to strengthen and widen the reach of emerging cross-regional communities of research and practice in the area of China-Africa studies. Originally established in 2007 as a small research working group at the Centre for Sociological Research, at the University of Johannesburg, the Research Network has grown rapidly to become a global network of researchers and practitioners. It provides a dynamic, virtual platform where members meet, debate, inquire, and stay in touch. Hosts Winslow Robertson and Ms. Lina Benabdallah (who are members of the Network) wanted to look at the Network's most recent outreach efforts and invited Dr. Tu Hyunh, who is the cofounder of the Network as well as a recent postdoctoral fellow at Jinan University on the pod to discuss these efforts.


Monday, October 26, 2015

Chinese Petty Traders In Nigeria (and a brief Yoruba lesson)

Chinese petty traders in Africa are always a fascinating subject - what drives a person to pick up and move to another country to try compete ferociously in a business with tiny profits? To help answer that question, hosts Winslow Robertson and Ms. Lina Benabdallah have invited to the pod Allen Xiao, a PhD student in Geography, with minor in African Studies, at the University of Wisconsin, Madison. He was trained in anthropology in Hong Kong and his previous research focused on Chinese migration to Nigeria: he authored “In the Shadow of the States: The Informalities of Chinese Petty Entrepreneurship in Nigeria” which was published in the Journal of Current Chinese Affairs earlier this year. Now his interests lie in the making of multi-ethnic Lagos and shifting Yoruba identity, and to that end he has been learning Yoruba since 2014. Who are these Chinese petty traders in Nigeria and how do they fit into the Sino-Africa relationship?


Saturday, October 24, 2015

The Ivory Queen?

On Wednesday October 7, 2015, Yang Feng Glan, a 66-year-old Chinese restaurant owner in Dar es Salaam station and vice-president and secretary-general of the Tanzania China-Africa business council, appeared in a Tanzanian court to be charged with smuggling ivory between 2000 and 2014. Media reports have dubbed her the "Ivory Queen" and the Elephant Action League, an American NGO, described her as “the most important ivory trafficker ever arrested in the country.” Host Winslow Robertson and new cohost Ms. Lina Benabdallah are joined by Hongxiang Huang, owner and manager of the China-Africa social enterprise China House and expert on China-Africa ivory smuggling issues, to look closer at this story. Did Yang Feng Glan fit the proverbial profile of a Chinese ivory smuggler in Africa?

Wednesday, October 21, 2015

Clean cookstoves

Note: This episode was recorded last year and is missing some content. It has been uploaded as the podcast is relaunching.

Clean cookstoves are cooking instruments designed to save fuel, improve health, empower women, and protect the environment. They are rarely mentioned in the same breath as China-Africa relations, but in this episode, host Winslow Robertson has two clean cookstove experts connect the two topics. Jichong Wu, China Program Manager at the United Nations Foundation and Yiting Wang, Program Development Manager at WWF-China, both share their histories with clean cookstoves as well as explain how those stoves fit into the China-Africa relationship.

Monday, October 5, 2015

Are You a Chinese?

By Zander Rounds

“Are you a Chinese?”

After years in China, ineffectually trying to blur my gangly American edges and blend in, this is one question that I never really imagined I would receive.

And yet, on more than a few occasions since my arrival in Kenya a couple of weeks ago*, Kenyans have curiously posed precisely that: “Are you a Chinese?” Or the other day, while chatting with a Chinese colleague, our Kenyan waiter returned my change, looked me in the eye and un-ironically pronounced, “Xie xie” [Mandarin for ‘thank you’].

Admittedly, it’s the crew that I am now running with. China House (中南屋), a Nairobi-based collective of young Chinese movers and shakers, housed under a common vision of flourishing through collaboration and connection between Chinese and Africans. I am the newest (and most American) member of a team working to integrate two worlds that occupy the same physical universe yet are still often separate: the Kenyan community and the Chinese community residing in Kenya.

Tuesday, June 30, 2015

Translation Tuesday: Great love engraved on a blue helmet: Peace-keeping Hero Jiang Hangang

By Zander Rounds

Author: Feng Chunmei
Translator: Zander Rounds
Published on: 12/3/10
Source: China Daily

Original text (in Chinese):

Jiang Hangang (third from left) with leadership team
members inspecting equipment (Zhu Min, Xinhua) 
In a country of peace and prosperity, why does the hero embark on journeys? To uphold peace.

On April 18, 2008, Jiang Hangang, Party Secretary, Military Engineer Platoon Captain of China’s seventh dispatch of peacekeepers to Liberia, and Regiment commander of Beijing Collective Military Engineering Corps, was in charge of 274 soldiers preparing to set off.