China in Cape Verde

October 5, 2011 • Features, Politics and Economy • Views: 1832

By TaoTao Holmes :

Feathered headdresses whirled about shimmering floats, while the fuzz from pom-poms began to drizzle onto sweaty arms and thighs. It was 3:00 a.m. on the fourth night of Carnaval in Ribeira Brava, Cape Verde, and all the shop owners had closed down to go celebrate the parade—all except for two tireless workers, for whom Carnaval holds no special value. In one of Ribeira Brava’s “Loja Chines,” a pair of short, Chinese women doled out cheap goods into eager fingers.

Since the emergence around 15 years ago of Chinese stores, or “Lojas Chines” in Portuguese, the Chinese presence has mushroomed in Cape Verde, a country just off the west coast of Africa’s Mauritania. These private enterprises now pepper the country’s ten islands, offering Cape Verdeans the best prices on the market. Estimates of the total number of stores across the country reach up to 200, with about 3,000 Chinese nationals currently in residence. And, despite burgeoning inter-competition, these storeowners are continuing to arrive. Instead of setting up establishments on the more developed islands, Santiago and São Vicente, newcomers are choosing more rural and remote areas. The dynamism and influence of this type of small-scale, private investment is growing increasingly evident in the local economy, an economy of a population of a mere 500,000––more Cape Verdeans live abroad than in the country itself.

Cape Verde is a small, dry, and isolated place that imports 90 percent of its food and boasts no exports besides suntans and kitesurfing trophies. (Holmes/TYG)

In contrast with the density and scope of similar stores back in China, the opportunity to take advantage of Cape Verde’s largely untapped market is unquestionably a good one. A store owner from Zhejiang Province staked out in a

small coastal town on the island of Sao Nicolau seemed to have a “why not” sort of attitude. “If I came, the transportation would be paid for, and I wouldn’t have to cause an economic burden on my family,” he said.

For most of these immigrants, it’s all part of a package deal with the Chinese boss: a five-year stint set within an included round-trip ticket. Store owner Nana Reis Zeng explained, “the boss arranges the visa, food, housing, clothes, and then at the end you can personally decide whether you want to continue. Most people after five years go back to China and then decide whether to come here again to open shop.” Zeng, short, slim, and bubbly, had lived in Cape Verde for eight years and was engaged to a Cape Verdean working in television in Praia, the capital. Unlike most of her Chinese compatriots, Zeng is settled for good. Her Chinese store is one of at least five or six in Espargos, a small city of 6,000 made up of countless cement buildings abandoned mid-construction.

It’s not coincidence that the round-trip tickets of these Chinese shop-owners all cut off at five years, and not a day more. As it turns out, foreign investors in Cape Verde recieve tax exemptions to all dividends and profits during the first five years of operation. As Chinese stores multiply, Cape Verdean stores, which must pay government taxes and tariffs, struggle to compete.

The Chinese workers generally come alone and are then followed by family members. They often hire local Cape Verdeans to help arrange store shelves offering everything from oven mitts, shoes, and candleholders to garlic graters, icing sets, “Gellisey” (Gillette) razors, and Hannah Montana satchels. Workers are paid 50 dollars per month, in contrast to the average annual income of 2,000 dollars.

Though Zeng said it isn’t hard to set up shop, (“If you have local residence and a little capital, you can do it”), it isn’t easy to stay afloat, especially with the recent surge of stores. Without special features or attractive products, a store will go bankrupt, she said, since the locals’ expectations have also risen. “You can only wait for Christmas, and then hold steady,” she laughed.

First Secretary of the Cape Verde Embassy in China Jorge Nobre explained there is no fixed limit on the number of visas he hands out. He makes his decisions based on whether or not candidates display the correct conditions. The embassy dealt out about 700 visas this year ––“for a small country, not a small quantity,” he added.

The embassy accepts no responsibility for the economic impact of its provision of visas. Housed in an office in Beijing the size of a two-bedroom flat, the embassy was established in 1976 and was Cape Verde’s first in all of Asia. Government relations between the two countries have significantly expanded since, with Cape Verde accepting the donation of projects such as the Parliament buildings, national library, and Cape Verde’s first dams. “China has the know-how and networking capability to help develop our economy by matching our needs with its capabilities,” said the embassy’s Second Secretary Sonia Barros.

Perhaps in conjunction with the millions in Chinese aid Cape Verde has received, the government stance on the presence of China’s small-scale investors remains supportive. Cape Verde’s Minister of Labor, Sara Lopes, said that Cape Verdeans must accept the rules of foreign investors and businesses if the nation wants to compete with much bigger countries.

But the impact of small-scale investors is disputable. Zeng said that the rapid emergence of stores like hers has forced many of local shops to close down. Still, she defended, the average consumer benefits. As one local acknowledged, the stores make it possible for everyone to buy basic things, removing previous purchasing inequalities; poorer Cape Verdeans no longer have to go barefoot or depend on one pair of underclothes. In addition, many of the stores now sell condoms, the result of a 2009 effort by U.S. Peace Corps workers and a local NGO to promote safe sex, with packs of three selling for ten U.S. cents each.

Nobre appeared either oblivious to or uninterested in the economic effects of the Chinese in Cape Verde. “Are there problems between the Cape Verdeans and Chinese? No. Cape Verde is a mix of people,” he said firmly. In fact, 70 percent of the population is mixed race. “We don’t have this kind of question––Chinese/Cape Verdean or black/white. It is a very open and welcoming people.” Nobre, however, has lived outside of the country now for over five years.

Despite Cape Verdeans’ welcoming, easy-going attitudes, the impact of the current economic regulations has recently begun to stir up discontent. “The Chinese don’t pay taxes, but a Cape Verdean store owner has to pay taxes and tariffs, so they can’t sell for cheaper than the Chinese,” said Tania DaGraca, a Cape Verdean who moved to the United States two years ago. Many locals now choose to close down their stores and rent the space to Chinese, she explained, because it’s a more lucrative business option.

“People say that the Chinese are the best thing to ever come to Cape Verde, especially here in Sao Nicolau,” said Joao Livramento, a high school student from Ribeira Brava. “However, others say that they are opportunists who sell low quality products.” He added, “In my opinion, the Chinese exploit their workers, they don’t respect employees’ rights, and [they] underpay them.”

Lenise Soares, a young Cape Verdean from the capital of Praia, was less concerned. “I don’t think it’s a problem,” she said frankly. “Those with more money go to the Cape Verdean stores, and those with less go to the Chinese.”

But while the five-year tax exemption policy remains, Zeng says that Chinese are only continuing to set up shop. And with the local government receiving generous financial support from China, it may be loath to turn a critical eye to Sino-Cape Verde relations at the local level.

“I have nothing against the Chinese, but if they would leave and go back to their own country, or if they paid half of what a Cape Verdean pays to run a store, Cape Verde would be a better place for Cape Verdeans,” DaGraca said. But that possibility seems unlikely. “I don’t know of anyone who has never shopped at the Chinese stores,” she admitted.

In a tiny economy where the number of tourists each year exceeds half the national population, the impact of Chinese store owners is growing impossible to ignore. Despite the aid recently received from China, Cape Verde’s government will have to address the issue—or choose to disregard an increasing threat to local livelihoods.

TaoTao Holmes ‘14 is a prospective Political Science major in Branford College. Contact her at taotao.holmes@yale.edu

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5 Responses to China in Cape Verde

  1. i was born in the sao vicente and recently wrote an essay describing the chinese stores impact on the capeverdean lifestyle. Much has changed. I know, I lived there until my teenage years, when immigrated the the US. There’s several mixed oppinions and perspectives regarding this matter.

  2. This is article is brilliant.

  3. Peter McCann says:

    Apart from the low wages they pay, the chinese stores are an eyesore , all selling the same rubbish and if The Government really wishes to start attracting more up market visitors from Europe and America they will have to be curbed. Mindelo has historic colonial buildings and enormas potential but this blight must be dealt with for real prosperty to fl;ourish. Cant they see this.?

  4. nataniel says:

    i tend to agree with peter I just returned from visiting and believe that in order to make progress this situation has to change. the cape verdean goverment has to open its eyes and make concret plan for the future.

  5. nataniel says:

    kudos to tao tao holmes