Increasingly Proactive Relations with China: The Example of Chinese Wholesalers in Kampala
From: 17 January 2013 13:00
Till: 17 January 2013 14:00
Research in Progress Seminar by Ward Warmerdam (PhD candidate ISS)
China has had relations with Uganda for 50 years. Early on China provided Uganda with numerous foreign aid projects. While development cooperation still plays a major role in China-Uganda relations, Chinese companies have increasingly started pursuing commercial activities in Uganda. As this inflow of Chinese accelerated, and the imbalance in trade relations grew increasingly large, there was a negative reaction among the local Ugandans. The competition with the Chinese, especially the low-level wholesalers led to claims that Ugandans were unable to compete with Chinese, and as such Ugandans were losing their businesses. The authorities are now clamping down on Chinese wholesalers. Larger companies also face tighter regulations, however, some even understand and agree with the Ugandan government. They say that these wholesalers often give China a bad image. The embassy itself says that it doesn’t approve of these smaller traders.
This paper is separated into three sections. The first section gives a brief description of the history of China-Uganda relations. The second presents evidence from a survey conducted by the author in Kampala in 2012, showing the difficulties faced by Chinese companies in Kampala, most notably the recent difficulty of Chinese traders and wholesalers to get work permits. It shows different sectors have been affected differently, and through an analysis of the investments, turnovers, work force sizes and employee training policies of the interviewed companies, shows the reasoning for the Ugandan government’s tighter controls on Chinese firms in general and wholesalers in particular. The final section concludes that far from being a passive player in the relationship Uganda is becoming increasingly proactive in its relationships with China, which China appreciates. The paper will present possible obstacles to the successful tightening of regulations, and provide recommendations to prevent and overcome these, to make the most of the relationship with China.