On “China model”

Original article in Chinese: “中国模式”贻害全球.
By He Qinglian on April 2, 2013.

Xi Jinping's visit to Africa in mid-March has again spurred “neo-colonialism” into a hot topic of concern of the international community. The so-called “neo-colonialism” means that in order to plunder the resources of Africa, China disregards the environment and ecology of the continent; at the same time, it makes Africa a dumping ground for cheap industrial products. China's economic development in Africa brought scarcely any employment opportunities for the peoples of Africa; the Chinese government's policy of non-interference in the internal affairs of other countries and its unconditional aids broke the aid-with-political-conditions pattern of Western countries, as a result, dictators of some African countries became even more unbridled.

The reason China's neo-colonialism has gained much ground in Africa is that through bribery, Chinese enterprises obtained the resource mining rights and market access and exported abroad the essence of the “China model”—collusion between government and business.

Bribery and corruption:
boosters of Chinese enterprises expansion overseas.

On March 12, before Xi Jinping visited Nigeria, the country’s central bank director Lamido Sanusi wrote in the Financial Times that “China takes our primary goods and sells us manufactured ones”, a means that was not only not mutually beneficial, but was also the essence of colonialism, which contributes greatly to Africa’s deindustrialization and backwardness. Jacob Zuma, president of South Africa, which listed alongside China as a BRICS country, warned as early back as in July, 2012 that “Chinese African relations continue to be unbalanced and that situation is not sustainable in the long run.”

However, complaints from senior officials of African countries have after all been few and far between; complaints from the common people were heard more often. The reason senior officials made few complaints was that there were intertwined interests between them and Chinese enterprises.

In the Bribe Payers Index (BPI) 2011, Transparency International (TI) included in assessment 28 major industrial countries and newly industrialized countries and conducted an anonymous survey with 3,016 senior business executives in 30 countries around the world to find out their perceptions of the likelihood of companies, from countries they have business dealings with, to engage in bribery when doing business in the executive’s country, and asked them if they are willing to bribe foreign officials to obtain business benefits. 

Based on the answers from the respondents, TI gave a score to each of the enterprises of the countries, with 10 points being the full score, meaning the interviewed would never bribe. Of the 28 countries and regions, China came 27 in that ranking, and Russia came last.

The BPI covered 19 industries, the countries and territories listed in it spanned across major regions of the world, representing nearly 80 percent of export, service, construction and investment industries around the globe. In addition to the bribery tendency ranking, the BPI 2011 showed that the construction of public facilities, construction, and oil and natural gas industries were more likely to breed corruption due to government manipulation and the huge amounts of money involved. These were the sensitive sectors for foreign bribery.

The Chinese government refuted the TI report. However, it is proven that bribery and corruption have indeed been the boosters of Chinese enterprises expansion overseas. From 2008 to 2012, the World Bank blacklisted 14 Chinese individuals and enterprises such as China Construction, and China Road and Bridge. The Sanctions Committee of the World Bank said that these sanctioned companies (or individuals) engaged in acts of fraud, corruption, and bids rigging during the procurement or contract execution process and have been barred from participating in finance project of the World Bank Group for two to eight years. In November 2009, the China Metallurgical Group offered a $ 20 million bribe to Afghan Mines Minister so as to secure a copper mining project in Afghanistan; ZTE, a group which has businesses in more than 140 countries worldwide, saw executives of its Mongolia office accused of alleged bribery and arrested by the Mongolian authorities on March 19, 2013.

Much of the investment of Chinese enterprises in Africa is heavily involved in public projects, mining, and construction industry. Almost all of these started with bribery, and only a handful got exposed. Why? Kong Xiangren, an official of the Ministry of Supervision, PRC explained back in 2010 that, “many of the cases we discovered, in particular commercial corruption cases that were transnational in nature, often came to our attention after they were first discovered by local governments in the US or in Europe and we then started to investigate the officials invovled. That was largely due to the hidden nature of bribery transaction.”

The World should boycott "China model".

Richard Dowden, Executive Director of the Royal African Society, had pointed out that "the Chinese government likes dealing with undemocratic government. The reason for that was of course: “birds of a feather flock together”. According to a person in charge of a Chinese overseas construction company, in Nigeria, corruption does not have to be done in secrecy at all. Relevant officials would include in the project budget their own commission, an action that made these officials very much alike corrupt officials in China.

Interest-driven dictators in Africa will not terminate the “resource diplomacy” with China, in which they themselves got huge benefits. Take for example China's aids to Africa. The figures of the country's aids to Africa is in a state of opacity. They include projects for which the Ministry of Commerce, PRC was responsible; there were other projects of provincial, municipal, and ministry and commission levels; and senior officials had their flexible quotas when they made overseas visits. With such a variety of sources of aids, their sum has been difficult to ascertain, and this perfectly concealed the corruption in bilateral exchanges between China and Africa.

Nonetheless, more and more Africans began to resent the “Savior(s) from the East”. They complained that Chinese enterprises didn't care about the damages to the local ecology in their search for resources (both mining and logging severely destroyed the local environment); they complained that Chinese enterprises often disregarded the most basic safety regulations. Accidents took place periodically, claiming the lives of workers; there were also incidents of workers being beaten to death by their employers. African enterprises, too, complained that they could hardly compete with Chinese enterprises, which had subsidies and loans from the Chinese government and were very powerful.

In addition to other issues, the roads and hospitals built by Chinese companies were of low quality and accidents were of frequent occurrence.

Despite their notorious records, Chinese enterprises could still have things their way in Africa because they paid bribe to local officials and prosecutorial personnel. As a result, they often managed to escape punishment.

I believe that ordinary Chinese people would not doubt the authenticity of the things mentioned above because these are exactly how Chinese enterprises operate inside China.

Through collusion with the government, enterprises obtained business opportunities and political protection; stopped at nothing, they caused destruction to the environment and produced bloody GDP and toxic GDP; running workplace with poor safety facilities, showing no concern for the life and safety of the workers, they saw workers as production tool and squeezed them desperately.

Of the products enterprises manufactured for market consumption, from foods and drinks to roads and bridges, many pose safety issues. In the event that consumers or victims of environment destruction made complaints, they evaded punishment by offering bribe to officials or judges.

The China model, characterized by corruption, plundering of resources, and disregard of the environment and the people's health, is now spreading across the world as China makes investment overseas. This is the plight that the people in Ecuador, South America now face. The country's government planned to sell a third of the Amazon rainforest to a Chinese petroleum company. The seven indigenous groups that live there intend to boycott the sale.

It is my wish that the people of Ecuador would learn from the Africans' experience and keep Chinese enterprises out of their country. Only with this way could they save their homes.

The “China model” has been practiced in China for nearly three decades. Through such dreadful ways as overdraft of the environment and the future of the Chinese people, the model generates bloody GDP and toxic GDP, making China a country that produces the largest number of wealthy people in the world. The other result is that it turns China into a grossly polluted country where cancer villages are all over. 

A few years ago, Mr. Zhu Houze, former propaganda chief of the CPC, a reformist, said as his last words that it is necessary to tell the world that the harmful China model must not spread overseas.
“This model has done harm to the Chinese people. That's enough. [We] must not let it do harm to other countries.”
China has now become a country highly dependent on resources from other countries. If it wants to get resources, it must abandon “China model”, which the world finds invidious. Otherwise, there will come a day that it faces a collective boycott by the civilized world and turns from “orphan of Asia” to “orphan of the world”.