US embassy cable - 05GABORONE934

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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