“This agreement is excellent for the province. Nobody else is producing crops on this land and, what’s more, the agreement is not dependent on the national government. It’s the kind of deal that everybody dreams about. It’s a matter of expanding the frontiers of crop production,” argues Mariano Turzi, professor of international relations at Torcuato Di Tella University. He believes that the nature of this investment is different from those carried out by the multi-national food companies operating in Argentina, such as Cargill or Dreyfus. “It’s not the same. In this case the Chinese state is behind the investment,” he argues, referring to Beidahuang’s capacity as China’s most important food production company to carry out a multi-million-dollar investment in a country overshadowed by legal insecurity.29
“The other investors don’t do this because they have no faith in Argentina’s investment framework,” the representative of Rio Negro had already told us in his office in Buenos Aires. In fact, an expenditure of this size in a country with few legal guarantees, legendary logistic bottlenecks and a politicized and troubled agricultural sector entails a significant amount of risk for China. If the investment comes to fruition as planned, it will represent a powerful example of what Beijing calls “win-win co-operation”; if soya is to Argentina what oil is to Saudi Arabia, a multi-million-dollar investment in such an unstable market can only be justified in strategic terms. The fact that the long shadow of the Chinese state lies behind Beidahuang is, of course, no coincidence. The risks become justified when the nation’s number one priority is to feed the most highly populated country on the planet.
This explains why China’s investments in Argentina and Brazil, the most powerful agri-food sectors in Latin America, go far beyond a simple commercial transaction.30 “China has invested a lot of money in Africa in order to extract and transport natural resources. In terms of food security, the strategy is the same: we have to invest in order to guarantee our supplies,” says Zheng Fengtian, a professor at the University of Beijing and a leading expert in China’s agricultural production, when we meet him in the Chinese capital. “China wants to remain self-sufficient in terms of food such as rice, which is a fundamental part of the Chinese diet and therefore highly strategic. However, this is not possible with other products, such as soya or corn, which are used to feed animals. We need to import these products, but how should we do this? There are three strategies, which are very similar to China’s means of securing its oil supply: firstly, buying from the global market; secondly, acquiring shares in international food companies in order to control them; and, finally, buying land in other countries. The least desirable of the three options is buying in the global market, for security reasons. What would happen if the large food producers such as the United States or Brazil decided to put a ban on exporting their products?” he asks.
The investment in Rio Negro therefore allows China to enter Argentina’s agri-food sector in order to contribute to its national security without being at the mercy of the market. Most importantly, this guarantees China’s food supplies even in times of shortage, such as during the financial crisis or the dramatic drought in 2012 in parts of the United States, which have caused a relentless and apparently lasting rise in food prices. This situation has already had political consequences in the Arab world.31 “Although we can supply ourselves with basic food products, Argentina is very important for China, a country with a population of over 1.3 billion people. Its importance is shown by the fact that Argentina is now China’s third biggest food supplier. China therefore sees Argentina’s agricultural sector as both a commercial opportunity and a strategic requirement. Both things are very important for China,” explains Yang Shidi, commercial adviser to the Chinese Embassy in Buenos Aires.32
The $1.4 billion investment in Rio Negro therefore makes perfect sense for Beijing, particularly when the future is worrying to say the least for countries such as China and India which have enormous upwardly mobile populations and limited natural resources and which are experiencing a rapid rate of urbanization.33 “The pork consumption per inhabitant is increasing by half a kilo each year. We also need to take into account the impact of the exodus of rural workers to the city: each year 1 percent of China’s population, or around 13 million people, stops working in rural areas and goes to live in the towns,” Yang explains.34 The national diet is becoming more sophisticated, which has led China’s average annual meat consumption per person to rise from 25 kilos to 54 kilos in just two decades. This means that extensive additional resources are required in a country which has only a meagre production capacity of its own: China has to feed a fifth of the earth’s population with just 7 percent of the world’s arable land.35
“Nowadays, the majority of people in China have no problem getting access to food. However, when their lifestyles become more sophisticated, they change their diet and instead of rice their meat consumption will increase. The resources needed to produce a kilo of meat are the same as those needed to produce several kilos of grain,” says Cai Fang of the Chinese Academy of Social Sciences, as he explains that a change in diet also means a drastic increase in grain production. This is on top of a shortage of other types of resources such as water, of which China has one of the lowest indexes per capita in the world.36 Furthermore, climatic changes have also caused a fall in crop harvests. This extremely complicated situation is further exacerbated by the fact that the biofuels industry has recently begun to compete with crops for human food supplies.
Consequently, companies in countries such as South Korea, Japan, the Persian Gulf nations and China are now considering the possibility of buying fertile land in Asia, Africa and Latin America in order to guarantee a future food supply for their populations. This phenomenon has captured the attention of the international media and institutions such as the World Bank and the Food and Agricultural Organization of the United Nations (FAO). Activists and NGOs warn that this “land grab” process represents a new form of colonialism, causing the displacement of indigenous populations who see their land as their connection with their ancestors. A further area of concern is the potential creation of countries with single-crop policies that will essentially grow crops in order to satisfy the demands of others, without taking care of their own food security.
Information published by the media suggests that China is one of the main forces behind this global trend of buying land, after acquiring hundreds of thousands of hectares in places such as the Philippines, Madagascar and Brazil in order to gain complete control over the production of soya, among other types of crop.37 This has sparked a reaction among several governments, such as the Brazilian and Argentinian authorities, who have been quick to approve legislation to limit or restrict arable land purchases on the part of foreign investors. “China’s process of leasing land in foreign countries is still in its early stages. In our country, when we want to make a significant investment in something, we always test it out first to get an idea of the local environment. There is a lot of land in Africa, but there is also a lot of conflict there. That’s why Latin American countries such as Brazil and Argentina are better,” Professor Zheng concludes. “It is very likely that we will see more land being bought in the future,” he predicts. This plan inevitably brings to mind the suggestion of Mark Twain in the nineteenth century: “Buy land. They’re not making it anymore!”
JACKPOT IN THE SPECIAL ECONOMIC ZONE!
The modern motorway offers a pleasant drive south from Yunnan and passes through Mengla before finally tackling the last few kilometers up to the border with Laos. The activity there is minimal, which explains why most of the shops selling souvenirs, pieces of jade and fake Pu-er tea have already closed for the day, and there are no customers to be seen at the restaurants serving Yunnanese cuisine. Although we cross the border into Laos at the regulation border post, many Chinese residents prefer to leave the country via a 2-kilometer motorbike ride through the jungle. This is the illegal route to Boten, where a private Chinese enterprise called Golden Bo
ten City Company has set up one of the enterprises that has caused the most embarrassment for Beijing’s authorities since the start of China’s expansion across the world. Just a few meters from the border, the Laotian government recently declared Boten a Chinese Special Economic Zone, an area measuring 6 square kilometers that was supposed to attract Chinese investment to build factories and workshops thanks to the area’s favorable fiscal conditions and tempting land prices. The low wages of the Laotian people were expected to provide the final piece of the puzzle needed to turn the area into a successful industrial zone. However, Boten has instead become a Chinese sanctuary for unadulterated pleasure: a paradise of gambling, prostitution and drugs.
Before the Chinese company and the Laotian government sealed their alliance, Boten was a small town whose inhabitants made a living from agriculture or selling live monkeys, bears and other wild animals at markets. As has happened in many other towns along the Burmese and Laotian sides of the border, all the economic activity in this enclave of 5,000 Chinese inhabitants now revolves around the casino inside the Royal Hotel. The stamp on our passport confirms that we are in Laos, but nothing has actually changed since we crossed the border: the only language spoken in Boten is Mandarin, the common currency is the yuan and China Mobile provides the mobile phone signal. It’s Friday afternoon and the street is getting livelier by the minute, which shows that many more people must surely be arriving through the jungle than via the official border crossing. A sign at the entrance of the Royal Hotel, a tall building that looms over the town, welcomes us with a somewhat paradoxical message: “Gambling is illegal for citizens of Laos and China.”
As we walk further into the depths of this pale yellow building with 380 rooms—all of them fully booked—we find an enormous shrine to the cult of gambling, full of state-of-the art slot machines and electronic roulettes imported from the United Kingdom. However, these are just the prelude to the real center of the betting culture: a game of baccarat. As people look at us inquisitively, we realize that the setting could not be more surreal: amid a cloud of cigarette smoke and the shrill cries of women holding baskets full of gaming chips, dozens of Chinese punters crowd onto the green carpets while croupiers hand out shares of good luck and the little balls spin around the roulette tables. There are few signs of enjoyment in the room, which is filled instead with a mixture of anxiety and wild jubilation. Betting is serious here, with piles of chips for up to 1,000 renminbi placed on just one number in each game of roulette. There are also several signs of superstition, with altars covered in floral offerings to the god of fortune.
This gigantic center of debauchery, which would be illegal in China, is divided up into rooms with suggestive names, such as “the chamber of total happiness” (bai fu ting) or “the room of riches” (fui gui ting). Everything is watched over closely by dozens of security cameras which, as well as guarding every corner of each room, also allow the business to expand into the motherland. Thanks to the cameras and the Internet, the casino can cross the border virtually, allowing Chinese customers to bet in real time from the safety of their own homes without worrying about being hunted down by the police. This vice on the other side of the border has created a new job opportunity for the many chancers wandering the streets of Boten: the role of middleman or agent.
It is easy to recognize these opportunists, sitting at the casino’s most select tables or betting on several tables at once, by the mobile phone wires dangling from their ears. These devices allow them to communicate with the casino’s real customers, who are able to follow the developments on each table through their computer screens. “What table do you want to bet on? How much do you want to bet? What number do you want to bet on? Do you want to leave the game?” we hear them ask their clients, discreetly but unashamedly, as we wander through this theme park for gamblers. The only time they take a break from following their clients’ orders is when they stop to change their phone batteries. As night falls, the activity around the casino reaches its peak. Pawn shops hypnotize customers with neon lights, tempting them to sell their watches, jewelry and computers in order to carry on with the betting binge. Meanwhile, restaurants draw them in with the delicious aromas of chili and ginger. The darkness also gives the town a chance to break away from any sense of discretion imposed by the light of day: at seven o’clock in the evening a horde of prostitutes descends upon the casino’s customers, offering two hours of love in exchange for 300 yuan (35 euros).
There are dozens of these girls from all over China, perhaps a hundred or so. Dressed in short skirts and extravagantly made up, they hand out business cards containing just the telephone number of their pimp and a number between 1 and 9 to identify them. In this enclave in northern Laos where the Laotian state simply doesn’t exist, even prostitution is controlled by the Golden Boten City Company, or simply “the Company” as it is known here. It is the lord and master of everything in Boten. The company collects taxes, approves regulations, and fixes the price of rent. It even enforces justice through a group of gangsters with access to an illegal prison, where they harass, torture, kidnap and—according to local hearsay—even kill defaulting customers who borrow money from the casino and fail to repay it. “If you have contacts or money on the other side of the border, you may live. If not, you’ll be tortured or even killed. Some people say they’ve seen bodies floating in the river,” a young woman working in a hairdresser’s told us.
In this scene from 1920s Chicago in Laotian territory, a group of mercenaries wearing imitation Chinese police uniforms are in charge of security. Although they drive cars bearing the word “police,” they do not follow any type of moral code, let alone the law. Here it is debts that decide who will live and who will die. The Company has turned Boten into the Wild West. “If something happens, we take care of it ourselves. If you contact the Laotian police, they come to us to ask us to resolve the situation,” explains Mr. Huang, a director and partner of the Golden Boten City Company, when we meet him for a brief interview in his office. The walls are hung with photos of the company’s executives posing with Laotian politicians, including the prime minister. However, a video of the company’s thugs torturing and mistreating Chinese debtors which was filmed on a mobile phone and broadcast by a television station in Hong Kong has forced a reaction from the Chinese authorities, who have been trying to close down the casino ever since.
According to Huang, future plans for Boten include four new hotels, a golf course and various types of tourist attractions, despite the plans announced by the Laotian government in March 2012 to close down the casino and hand the SEZ to another Chinese investor. In any case, on our journey through Southeast Asia we were able to confirm that Boten is not an isolated case. Equally well-camouflaged casinos in Special Economic Zones are a daily reality in the middle of the Laotian or Burmese jungles, where Chinese companies set up enormous tourist complexes which are funded by the money that flows into the casinos. We spent the night in one of them: the Golden Triangle Special Economic Zone. Five hours and 250 kilometers away from Boten, this SEZ is based on the banks of the Mekong river, in the heart of the world’s most famous opium cultivation and trafficking area.38 There is no trace of industrialization or manufacturing complexes which would give work to the local population and contribute to the area’s economic development. Just enough infrastructure is built to get the area up and running, including access roads cutting through the jungle and jetties on the river. In reality, the SEZs are no more than simple “exception zones” controlled by a form of Chinese investment which brings to mind the terrible colonialist abuse suffered by China a century and a half ago. This time, however, the order is reversed: now it is Chinese capital that has found its “concessions.” China’s current treatment of Boten or the Golden Triangle can readily be compared with the debauchery prevalent in a China that was overrun by opium and prostitution at the beginning of the twentieth century.
6
The New Victims of the “Factory
of t
he World”
“The friendship between China and Mozambique will prevail like Heaven and Earth.”
Chinese motto at the entrance to the
National Stadium in Maputo
On the outskirts of Maputo, the splendid National Stadium shines with a light of its own amid the gloomy squalor of one of the poorest countries in Africa. To get to the stadium, we have to make our way through the dense traffic of crowded minibuses and pick-up trucks which bring the suburbs of the Mozambican capital to a standstill. This lack of movement extends all the way to the dusty gutters at the side of the road. Lined with buildings on either side, the N1 motorway reveals the essence of Africa: a parade of women with babies on their backs and sacks of rice or corn on their heads, children in uniform on their way to or from school and street vendors selling all kinds of produce, from coal, tires and firewood to mobile phone cards, fruit and petrol. The air is filled with the stench of rubbish and plastic being burnt somewhere nearby.
In the open area beside the stadium, dozens of people with poverty radiating from every pore are laying out basic products on blankets on the ground. They are selling cheap clothes, sickly looking meat and fish and lukewarm drinks, as well as nail varnish and bars of soap, vegetables and dried fruit, tomatoes, oranges and various tools. They manage to survive somehow despite the sun beating down, their meager sales and the incessant cries of their babies. Just a few meters away, a walled precinct with a firmly locked entrance and a Chinese-style roof hung with red Chinese lanterns is home to the building site of a magnificent new football stadium with a capacity for 42,000 spectators. Built by the Chinese state-owned company Anhui Wai Jing,1 the stadium was once hailed as the pride and joy of the entire nation. That was until strikes, quarrels and violence transformed the most symbolic Chinese project in Mozambique into a veritable minefield.
China's Silent Army Page 21