LUSAKA , 5 February (IRIN) - China's pledge to pour US$800 million into Zambia over the next three years has been given a frosty reception on the ground, as many locals believe the investment will hold little benefit for the people, two-thirds of whom live on one dollar or less a day.

Chinese president Hu Jintao made the multi-million dollar announcement on Sunday, when he also wrote off $11 million worth of debt, promised to build schools, and provide agricultural training and loans for road-construction equipment. A trip to Copperbelt Province to lay the foundation stone for a national stadium was cancelled at the last minute, apparently over fears that he would be embarrassed by a protest over poor working conditions planned by mine workers.

Police also sealed off all access roads to the University of Zambia's campus on Saturday, the day Hu arrived, after widespread rumours that students were going to demonstrate against his visit.

Muweme Muweme, social conditions research project officer at the Jesuit Centre for Theological Reflections, a faith-based human rights watchdog, told IRIN: "The problem with such foreign direct investment as the Chinese, is that it always comes with vested interest, which is profit. Many of these investments coming into the country are actually not helping in building the capacity of the local people so that they can contribute to their own economic growth.

"It is time that our government stopped favouring foreigners through incentives because Zambia offers raw materials. Government should be more cautious with these investment pledges," he said.

A $200 million copper smelter is the centrepiece of an Economic and Trade Co-operation Zone in Copperbelt Province, the first of five such zones to be established in Africa with Chinese investment and the co-operation of host governments. The Zambian zone is expected to create 50,000 new jobs by 2010, adding to the 10,000 jobs already created by China's investments - a high number of employment opportunities, given that only about 400,000 formal jobs exist in a country of about 10 million people.

Hu's 2004 policy of strengthening ties with the mineral- and energy-rich continent coincided with the adoption of free market polices by President Levy Mwanawasa's administration. China's exports to Africa rose by 36 percent to $13.82-billion in 2004, while imports, mostly natural resources, rose 81 percent to $15.65-billion. In 2006, total trade between Africa and China reached US$55.5-billion, and China now sources one-third of its crude oil imports from Africa.

Zambia's investor-friendly approach offers generous investment terms to lure foreign mining companies, such as 20-year tax holidays, a low 0.6 percent mineral royalty tax - the global norm is 3 percent - and no duty imposed on imports of equipment and machinery.

According to the Zambia-China Business Forum, bilateral trade between the two countries grew by 11.8 percent in 2006 to $316 million. Hu's two-day stopover in Zambia is an indication of its importance to China, as the seven other African countries he is visiting to promote trade are only being given a day each. His tour takes him to Cameroon, Liberia, Sudan, Namibia, South Africa, Mozambique and the Seychelles.

Chinese investment became a divisive campaign issue in the run-up to Zambia's 2006 general election, during which the main opposition leader, Michael Sata, of the Patriotic Front, promised to chase away the Chinese if he won the election. Voters in the capital, Lusaka, and the country's economic heartland, the Copperbelt Province, favoured Sata, giving him all the parliamentary seats in these areas.

Although Mwanawasa was returned to power for a second and final term of office, the election period saw Ambassador Li Baodong seemingly break diplomatic protocol when he told local media that Chinese investors had put "on hold further investments until the uncertainty surrounding our bilateral relations with Zambia is cleared." His remarks were seen as interfering in Sata's election campaign and caused widespread anger.

Justin Chilufya, a street vendor in Lusaka, said more Chinese investment in Zambia would lead to a further deterioration of living standards because "these Chinese investors just come here to make money and take away from us even the simple businesses like selling groceries in markets. Honestly, is this the kind of foreign investment we can be celebrating about?

"Today, we are forced to trade on the streets simply because the Chinese have taken over selling in our newly constructed shopping complexes at Kamwala [Lusaka's main trading area] and at town centre. We don't see any need for Chinese investment if they are not going to put up their own structures, which can remain here after they leave."

Emily Sikazwe, executive director of Women for Change, a local gender and human rights advocacy organisation, said Chinese investment was counter-productive. "This move will promote massive externalisation of the few resources that Zambia has, because our country will be used as a provider of cheap raw resources and a market for poor-quality goods. We expect China to make their investment in our country more meaningful by observing human rights, especially the right to livelihood and dignity."

As China's investment increases, so do the number of Chinese people residing in Zambia, which is becoming another hotly disputed issue. Deputy minister of Home Affairs Chrispin Musosha recently told parliament that within six months the number of Chinese people working and living in Zambia would double from the current figure of 2,300.

According to an official at Zambia's immigration service, who declined to be identified, "there could be well over 50,000 Chinese residents in Zambia, as we don't count the women and all the dependants whenever we give out work permits to foreigners. In 2006 alone, we gave out over 5,000 permits to Chinese investors."

Guy Scott, secretary-general of the Patriotic Front, claims there are 80,000 Chinese people currently residing in Zambia. "People are very angry with China's investment in Zambia: they are paid poor salaries, they work under risky conditions - in some cases without protective clothes - and this is why no one seems to be supporting them."

Two years ago, 49 miners were killed in an accident at the Chinese-owned Chambishi Mine in Copperbelt, and last year five miners were shot dead by police during violent protests over working conditions at the same mine.

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