Guangzhou less attractive for African traders as manufacturing upgrade reduces profit margin
○ As commodity and labor prices have risen in recent years, more and more African traders have chosen to move from China to cheaper countries in Southeast Asia
○ As Chinese companies expand their African operations, African traders have found it harder to make money importing goods from China
It was another slow day in one of the Tianxiu Building's malls, located on Xiaobei Road in Guangzhou's "Little Africa." Many shops have folded in the past year, and the mall is now in a state of disrepair and looks gloomy. The remaining shops are struggling with high rents, declining profits and a lack of customers. Sid, a trader from Mali, is worried about his business prospects.
When he arrived in Guangzhou, South China's Guangdong Province in 2005, Sid witnessed the heyday of the Tianxiu Building and the neighborhood in which it sits, the largest African enclave in China which has been called a hub of "low-end globalization." Back then, hundreds of African traders from dozens of countries flocked to the malls located on the first few floors of the building every day to purchase everything from garments to key rings, from batteries to mobile phones. They would then ship them back to their homelands for sale.
But that is now distant memory. As commodity and labor prices have surged in China in recent years, the Tianxiu Building has lost its luster among African traders. Business in the building is in sharp decline, and more and more African traders have opted to move to cheaper countries in Southeast Asia.
Adams Bodomo, professor of African Studies at the University of Vienna, wrote in his 2012 book Africans in China that 96 percent of Africans in Guangzhou back then were engaged in business or trade.
For many Africans, the Tianxiu Building, less than three kilometers from Guangzhou's train station, was their starting point. Completed in 1997, the Tianxiu Building consists of three blocks and is home to several shopping malls, low-budget hotels and hundreds of small trading companies. Just a few years ago, it buzzed with hundreds of traders from dozens of African countries who bargained with their calculators and pushed carts loaded high with goods.
It was a gold mine. Research by Michal Lyons, professor of urban studies at London South Bank University, recorded the account of a Nigerian trader who visited Guangzhou once every two months. On each visit, he would buy 25,000 shirts, ship them back to his hometown and sell them for $1.50 each. Each trip to Guangzhou meant an income of $37,500.
Felly, a 38-year-old trader from Congo who started doing business in Guangzhou in 2004, said he first spent $3,000 on television sets and air conditioners, and sold them back home for more than double what he paid for them. "You can earn $50,000 in a month," he told the Time Finance magazine.
Stories like this attracted more and more Africans and soon the area surrounding the Tianxiu Building became known as "Little Africa." Many African traders to China know the saying that "If you haven't been to Tianxiu, you haven't been to China."
As the population of Africans in Guangzhou grew and as most of them lived in the same district, they soon became a conspicuous presence. Many said they suffered discrimination, and rumors spread among Guangzhou residents, some going as far as alleging that there were 500,000 Africans in Guangzhou who "grab resources and commit crimes."
But actually, Africans are far from the biggest foreign community in Guangzhou. According to Guangzhou's Exit and Entry Administration, by October 2014, among the 118,000 foreigners in Guangzhou, only around 30,000 were from Africa. They are outnumbered by foreigners from other Asian countries and Europe.