The World of China Inc.

The World of China Inc.

Lunch at the site of the future Ramu nickel and cobalt mine in the remote hills of Papua New Guinea is a hurried affair, food shoveled into eager mouths. But the menu is as divided as the two distinct groups of workers squatting in the heat, swatting away flies and filling their bellies before their nine-hour, seven-day-a-week shifts begin again. In one huddle are local laborers chewing chunks of sweet potato and the canned fish known in pidgin dialect as tinpis. In another clump are imported workers from China who dig into rice topped with pork belly and chili – black bean sauce. The Chinese, who were shipped in by the state-owned China Metallurgical Group Corp. that has invested $1.4 billion into this faraway outpost, can understand neither English nor pidgin, two of the national languages. The Papua New Guineans speak no Mandarin. Even at mealtime, an event during which both cultures would normally encourage community and hospitality, the air is weighted by mutual incomprehension. “How can we eat together if everything about us is different?” asks Shen Jilei, whose first overseas experience transferred him directly from China’s Sichuan province to a South Pacific nation he hadn’t even known existed.

Notes of culture clash ring everywhere I wander in the vast construction zones that by the end of this year will turn a pristine stretch of virgin forest and grassland into one of the world’s largest nickel-extraction sites. On the palm-fringed coast of Basamuk Bay, where the Ramu refinery will be situated, a chatty Beijing-born building engineer tells me that before the Chinese arrived, “the natives were completely uncivilized and running around almost naked.” I voice my doubts, telling him that I’ve just talked to a nearby villager who described a PowerPoint presentation she recently made detailing environmental concerns about the mine. The engineer, like many other Chinese I meet, remains unimpressed. “All they do is chew betel nut and act lazy,” he says. “They don’t know how to work hard like we Chinese do.”

The impression the Chinese have left on many P.N.G. nationals isn’t much better. A local landowner whose ancestral territory lies in the middle of the mine site alleges, improbably, that the nickel will be used to feed a secret Chinese weapons program. In the capital Port Moresby, my driver announces that if a gang to evict Chinese from P.N.G. is formed, he will be the first to join. “I will sharpen my bush knife and chop 10 or 20 heads,” he says. The unease about Chinese influence extends to government circles, even if the Ramu mine promises to add 8 percentage points to the country’s GDP. “I know the Chinese are going out everywhere in the world and investing successfully,” says Rona Nadile, an assistant secretary of labor and industrial relations. “But what I don’t understand is why are they are so stubborn to not respect our local culture. We are a democracy. They have to play by our rules or we will rise up.”

Mixed Blessings
When China began its global investment push in the early part of this century, the flood of new money was welcomed, particularly in those parts of Asia, Africa and Latin America that felt abandoned by the West. China’s promise not to politicize aid and investment by attaching pesky conditions like improved human rights pleased many governments. Between 2003 and 2008, Chinese direct investment overseas skyrocketed — rising from $75 million to $5.5 billion in Africa, 1 billion to $3.7 billion in Latin America and jumping from $1.5 billion to $43.5 billion in Asia. The People’s Republic now ranks as the No. 1 foreign investor in countries as diverse as Sudan and Cambodia. In exchange for the natural resources needed to feed China’s economic engine, Beijing began an assiduous campaign to win foreign hearts and minds by financing stadiums, hospitals and lavish government offices. The Foreign Ministry in East Timor was built courtesy of the Chinese, while Guinea-Bissau’s marble-accented parliament building was a gift from Beijing.

Some countries, however, are no longer as willing to extend a red carpet toward the globetrotting Chinese. Although political strings might not come with Beijing’s cash, there are economic catches. The roads, mines and other infrastructure on offer are most often built by armies of imported Chinese labor, cutting down on the net financial benefit to recipient nations. Chinese companies investing abroad also tend to ship in nearly everything used on building sites, from packs of dehydrated noodles to the telltale pink-hued Chinese toilet paper. It’s not only the contracted Chinese workers who show up, either. Within a few years, their relatives invariably seem to materialize to set up shops selling cheap Chinese goods that threaten the livelihood of indigenous entrepreneurs. Locals who do get work on Chinese-funded projects complain that their bosses don’t heed national labor laws ensuring minimum wage or trade-union protection. Over the past three years, anti-Chinese riots have erupted everywhere from the Solomon Islands and Zambia to Tonga and Lesotho. Tensions are also simmering in India, where the Chinese are involved in several major infrastructure projects. Even high-level officials are speaking up. In Vietnam, plans for a $140 million Chinese-operated open-pit bauxite mine were publicly excoriated by none other than revolutionary hero General Vo Nguyen Giap because, he said, of “the serious risk to the natural and social environment.”

An Island Apart
Nestled in one of the most backward parts of one of the world’s least developed nations, the Ramu mine has emerged as an acute example of resentment against China Inc. In 2004 P.N.G. Prime Minister Michael Somare returned home from Beijing, triumphant at having snared the country’s largest foreign-investment project to date. The euphoria was short-lived. Landowners brandished slingshots and announced they wouldn’t sign off on their tribal territory being used for mineral extraction, no matter what document was signed in China’s Great Hall of the People. Environmentalists cried foul over plans to deposit mine waste in the sparkling Basamuk Bay, while local workers protested conditions that even P.N.G.’s Minister for Labor and Industrial Relations David Tibu described as slavelike and “not fit for pigs or dogs.” Skirmishes repeatedly broke out between villagers and the 1,500-plus imported Chinese laborers, some of whom were working illegally in P.N.G. At the same time, anger has boiled over because of an influx of thousands of Chinese who over the past couple of years have monopolized businesses that by law should be reserved for P.N.G. nationals. In May, anti-Chinese riots convulsed cities nationwide, and several people were killed amid the looting of Chinese-owned shops. “Our timber, our minerals, everything, goes to China,” says Damien Ase, founder of the nonprofit Centre for Environmental Law and Community Rights in Port Moresby. “But we get so little in return.”

Read “Another Deal Blown, Where Will China Invest Now”

Read “China at 60: The Road to Prosperity.”