LOCAL RESENTMENT TOWARD CHINESE

UNCLAS GABORONE 000934

SIPDIS


SENSITIVE

AF/S FOR MALONEY

E.O. 12958: N/A
TAGS: PGOV ECON CH BC
SUBJECT: LOCAL RESENTMENT TOWARD CHINESE

REFERENCE: 04 GABORONE 01519


1. (U) SUMMARY: Perceived unfair competition, against a
background of slower economic growth and rising
unemployment, has fed an emerging anti-Chinese sentiment,
particularly in Francistown, Botswana's second largest city.
Local businessmen there see Chinese shopkeepers as illegally
crowding out local entrepreneurs while workers perceive them
as providing few jobs and paying meager salaries. The GOB
has initiated an inquiry into the issuance of trade licenses
to foreigners in response to concerns that Chinese traders
had violated relevant regulations. The Chinese Embassy has
engaged both the ruling party and the Government in an
effort to build good will through exchange visits.
Assistance provided by the PRC and the GOB's commitment to
generally open trade and investment policies are likely to
prevent current tensions from becoming a major obstacle for
Botswana-China relations. END SUMMARY.

FRANCISTOWN BITTER ABOUT CHINESE RESIDENTS


2. (U) Mrs. Rebecca Nshakazhogwe, Deputy Mayor of
Francistown, Botswana's second largest city, told PolOff on
June 28 that her constituents were "bitter" about the many
Chinese nationals living there. As a political leader,
Nshakazhogwe was disappointed that investment by Chinese had
created so few jobs, by her reckoning. Almost all Chinese
investors were merchants, she said, selling low quality
goods imported from China. She knew of few, if any, who had
set up manufacturing operations. Moreover, Chinese-owned
shops tended to employ only a few Batswana, invariably as
clerks or laborers, rather than in managerial positions.
This had created a general resentment toward the Chinese
community in Francistown, she said.

LOCAL BUSINESS RESENTS COMPETITION


3. (U) In a separate conversation with PolOff, District
Commissioner Sylvia Muzila, also based in Francistown,
agreed that there was a growing unease surrounding the
presence of Chinese merchants there. Unlike Nshakazhogwe,
Muzila traced that resentment more specifically to local
business people. Not surprisingly, they did not welcome
competition from Chinese shopkeepers who operated on a lower
profit margin and worked longer hours. It was the perceived
grievance within the business community which had attracted
the attention of politicians to this issue.

INVESTIGATING TRADE LICENSES FOR FOREIGNERS


4. (U) Following public criticism of unfair competition by
some Members of Parliament from constituencies in and near
Francistown, the Cabinet in February decided to indefinitely
suspend the issuance and transfer of trade licenses to
foreigners. Issuance of licenses for general trading had
been reserved for Batswana for some time but the GOB had
allowed foreigners to obtain licenses to trade in specialty
goods. Chinese traders reportedly obtained these licenses
to set up shops but then sold common wares, rather than
specialty items. The Ministries of Trade and Industry,
Finance and Development Planning, and Local Government are
jointly investigating this alleged rule breaking and their
report is due by the end of July.

VIOLENCE WITHIN CHINESE COMMUNITY


5. (U) Although unrelated and subsequent to these policy
decisions by the GOB, a violent incident in May involving
members of the Chinese community in Francistown seems to
have brought anti-Chinese sentiment to a head there.
According to Officer Commanding District 1 (greater
Francistown) Mr. Boikhutso Dintwa, five Chinese nationals
were in police custody and charged with five counts of
robbery. The group, all recent immigrants from China who
had not found employment in Botswana, had set up a
protection racket preying on Chinese shop owners. When they
assaulted some merchants who refused to pay, other victims
came to the aid of the resisters and attacked the thugs.


6. (U) Mr. Tie Jiang, a Political Officer at the Chinese
Embassy, told PolOff on June 30 that his Mission had not
received any complaints about the conditions in which the
detainees were being kept though he acknowledged that the
five did not have an attorney. Deputy Mayor Nshakazhogwe
told PolOff that Francistown residents, angered by the
perception that the Chinese community was "taking over"
their city, had pointed to the incident as evidence to
confirm their argument that the presence of the Chinese was

a problem.

OUTREACH TO ELITE: PRC EXCHANGE PROGRAMS


7. (U) Although sensitive to the resentment of Chinese
businessmen among the local population, Mr. Jiang pointed
out that the GOB welcomed the savings offered by Chinese
construction companies who underbid the South African and
local firms that previously dominated the market. In
addition to financial assistance, such as concessional loans
to fund infrastructure projects (reftel),China is trying to
build goodwill through direct interaction with Botswana's
governing elite. A delegation from the National People's
Congress visited Botswana June 27-29 and met with members of
Botswana's National Assembly. Earlier this year, five
members of the ruling Botswana Democratic Party traveled to
China at the invitation of the Chinese Communist Party.

COMMENT


8. (SBU) The GOB appears to be satisfied with its
relationship with the PRC - some development assistance and
no pressure on human rights or Zimbabwe. Popular resentment
toward the local Chinese population, especially acute in
Francistown, is largely linked to the country's economic
fortunes. Slowing economic growth has brought into stark
relief concerns about unfair competition from Chinese
nationals and the low wages they pay. Although these
complaints resonate with a common theme of the opposition
parties - and some BDP members - that the Government's
development policies favor foreigners, such perceptions will
not likely instigate a significant reversal in the
Government's generally open trade and investment policies or
create a major obstacle for Botswana-China relations.

HUGGINS


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