Call me Raymond, he says. He doesn’t want his real name known. He knows he could get into serious trouble for the illegally low wages that he pays his workers.
Raymond grew up in China, found it too fiercely competitive, and came to Africa in search of easier opportunities. Now he owns a clothing factory, toils long hours and makes a steady profit – but only because he violates the law by paying below the minimum wage.
“Here the people work too slowly,” he complains. “Even if they could get more money, they would rather drink beer or something.”
Raymond is one of dozens of Chinese entrepreneurs who own clothing factories in Newcastle, an industrial town in an impoverished rural region of South Africa. With unemployment at nearly 60 per cent in the surrounding region, the factories have a steady supply of workers – but they’ve been condemned by unions for ignoring the wage laws.
As African countries increasingly become the target of a wave of Chinese investment, they face a dilemma: should they accept the money and the entrepreneurs in every case, even if the jobs are poorly paid and illegal? Are any jobs better than no jobs at all? How many concessions should be made in exchange for Chinese investment?
Across the continent, Chinese businesses have invested billions of dollars in African economies, creating hope for the future. But they’ve also clashed with workers in a number of countries. In the most notorious case, two Chinese mine managers in Zambia were charged with attempted murder after they allegedly opened fire on workers who were protesting against low wages and poor working conditions. Eleven workers were injured.
In Newcastle, Raymond has been penalized with fines for failing to pay the minimum wage. He and the other Chinese factory owners in his town were recently given the “Worst Employer Award” by one of South Africa’s biggest trade unions. But he warns that he’ll have to shut his factory if he has to pay the legal minimum of about $70 a week.
Most of his 200 workers, desperate for jobs in a South African region with high unemployment, accept wages of less than $50 a week. Some work for just $30 a week. “We can’t pay more,” Raymond says. “If the wages go up, many of the Chinese-owned factories will have to close.”
In fact, the Chinese-owned factories in South Africa are paying wages at the same level as factories in China. Economically it makes sense, since they are competing against a flood of clothing imports from China. Yet it puts them on a collision course with South Africa’s powerful unions, which gained moral legitimacy during the fight against apartheid.
Raymond sees it as a culture clash between Chinese entrepreneurs he thinks are hard-working and South African workers he considers lazy. He routinely works a gruelling schedule from 7 a.m. to 11 p.m., and sometimes all night when he has an urgent shipment to prepare. Many of the Chinese factory owners in Newcastle work such long hours that they sleep in a room at the back of their factory to save time.
The profits that Raymond reaps at his factory have a simple purpose: to pay for the education of his son, who is studying at a university in the United States and wants to be a doctor. When his son graduates and begins earning money, Raymond will finally retire.
“Chinese people think that tomorrow will be better,” he says. “If you don’t work hard, you won’t make money. But here in South Africa, the people think that tomorrow you could die, so you should live today. It’s a different way of thinking.”
Betty Mbele, a single mother of two children, has worked in Newcastle’s clothing factories for 15 years. Now she earns about $50 a week at her job in a storeroom at Raymond’s factory. She says she needs the wage to raise her family. “I have to take it,” she says.
She believes that the unions and the government aren’t doing enough to enforce the minimum wage. “Nobody is doing anything about it,” she says.
As for the threat that factories will close if wages are increased, she is skeptical. “Who knows if it’s true? Maybe they’re just saying it. Maybe some of them will leave, but not all of them.”
Patrick Vundla, an organizer for the Southern African Clothing and Textile Workers Union, admits that the Chinese factories have created thousands of jobs in Newcastle. But he doesn’t believe their pleas of poverty or their threats to leave. “If they weren’t making a profit, they would have left already,” he says. “Some of them have been here for 10 years – that tells you that they’re making a profit.”
South Africa’s government is caught in the middle of the dispute. It has close links to the trade unions, and relies on them to deliver votes. But it has also become increasingly fascinated by the Chinese economic and political system as a model for South Africa.
The ruling party, the African National Congress, has sent many of its executive members on tours of China. Its new political school is explicitly modelled on the Chinese Communist Party’s central school. The government’s new Minister of Arts and Culture gives speeches filled with long quotations from Chinese leaders. And the President, Jacob Zuma, has praised the “discipline” of China’s authoritarian political system, calling it a potential recipe for economic growth in Africa. The government has welcomed Chinese investment in South Africa, which totals more than $6-billion so far, but it is unclear whether it will accept illegally low wages as part of the bargain.
If there is hope for a solution to the conflicts in Newcastle, it could come from a new Chinese-owned factory, Sen Li Da, which has invested $12-million in a state-of-the-art factory here, using Chinese equipment to recycle plastic bottles into chemical fibres. When the factory opened last year, it was plagued by work stoppages by its South African workers. So it contacted the unions and invited them in – and the conflicts stopped. Even its 75 Chinese workers (nearly half of the work force) have joined the unions.
“Some people think that unions do strange things, but actually they help,” says Frank Fang, the factory’s office manager. “When we call Patrick Vundla, he always comes on time to sort out any little problems. It’s good for both sides. We need peaceful and friendly working conditions.”
The factory, like most others in Newcastle, is still paying below the minimum wage. But it aims to increase the wages as its finances improve. “If you want to keep the company running, you have to do it step by step,” Mr. Fang says.