Difficult business winning hearts and minds in Moresby
Leon Wang was lured to PNG from China by the prospect of riches and adventure. The reality has been much tougher.
Five years ago Leon Wang was a 25-year-old teaching English in Nanjing province in China when he was lured by the prospect of riches and adventure to Papua New Guinea.
Today, Wang’s world is a small office with big television screens to monitor petty theft from the shelves of Best Gear Trading Number Two in Port Moresby’s risk-prone Gordons Market. “It is very tough in Port Moresby,” Wang says. “This area is the most dangerous area in the city, and the country.”
Outside the supermarket managed by Wang, local vendors ply their trade on the footpath with red mouths and wide eyes from chewing betel nut, a natural stimulant, surrounded by piles of plastic litter.
“People drink too much and fight out the front,” Wang says. “Sometimes they fight with our security and break into containers and remove drinks. But most of the time they fight with each other in tribal fights.”
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This series is supported by the Judith Neilson Institute for Journalism & Ideas
Read more: Watching from the sidelines | Singapore benefits from HK unrest
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Violence, corruption and dysfunction remain a curse of the resource-rich former Australian colony, which has been gripped by a new wave of interest from China that stretches well beyond debt-funded diplomacy through its Belt and Road Initiative.
The Weekend Australian has travelled through PNG to meet China’s frontline traders, Chinese government workers and PNG-born Chinese families for the second of a six-part series on China’s diaspora in Asia and the Pacific.
The PNG China story is one of deep roots, strong culture and close links to Australia.
Robin Seeto, a member of one of the original Chinese families that settled at Rabaul before the World War I, is teaching locals to perform the Lion Dance to keep the tradition alive in PNG.
Seeto says he first followed the lion dance when he was four or five years old and has been forced to introduce local (Papuan) dancers out of necessity when many of the original PNG Chinese families moved to Australia after independence.
“The old Chinese community became small but I wanted to carry on the tradition, so I passed it on to some of the local boys,” he says.
“Some have been with me more than 10 years and are well aware of the cultural significance of the lion dance.”
As a former colony, PNG enjoys a special relationship with Australia. Early Chinese settlers supported the Allies in two world wars, first against Germany and then Japan, and many migrated to Australia after PNG won independence.
In 1905, Australia replaced the British as administrators of Papua, the half of the country that includes the capital, Port Moresby. During World War I, Australia seized the German-owned New Guinea colony, including New Britain and the Bismarck Archipelago.
After the war, Australia was given a trusteeship over New Guinea by the League of Nations, and plantations were given to war veterans. Until 1949, Papua was a separate administration from New Guinea; however, both were combined after World War II, and in 1975 the island nation gained full independence.
With amalgamation, PNG’s small but vibrant Chinese communities expanded their business activities across the country, many moving to Port Moresby. After independence they were able to choose Australian citizenship, but many who left maintained their business links to PNG.
Those Chinese who stayed behind are using novel ways to preserve old traditions, such as recruiting PNG locals to dance the lion dance for Chinese New Year.
Today, the Chinese diaspora in PNG is a complex matrix of the old and the new. A new generation of shop owners offers stiff competition to the long-established families. More recently, the PNG government has been strengthening its ties with mainland China.
Communist Party-backed companies have invested heavily in infrastructure, particularly in the capital, raising concerns about the potential for debt-trap diplomacy where China uses loans to increase its influence.
Within the 20,000-strong Chinese community in PNG, there are rivalries and resentments including from established Chinese families towards a new generation of arrivals from the mainland. PNG citizens have longstanding grievances that they have been locked out of major parts of the PNG economy by the more business-astute Chinese, with fears some new arrivals are not paying their tax or playing by the rules.
In a country that scores 28 out of 100 on the Transparency International corruption index and ranks 137 out of 180 countries, corruption is an ever-present issue.
The PNG government is running a “take back PNG” campaign, with a focus on small to medium businesses, which explores ongoing hostilities towards Chinese traders. But much of the focus is on a new wave of arrivals from India and Bangladesh who are starting to offer hefty competition to the Chinese. It remains a burning question to what extent Chinese traders and businesses are being protected by local politicians and encouraged by the Chinese Communist Party back home. There is anecdotal evidence that young Chinese are being told by central government in Beijing to build businesses in the Pacific and there are suspicions that the party is offering financial support.
However, there also are counter-claims that many Chinese businesses are a front for PNG nationals who find it difficult to operate because of village customs that put a heavy emphasis on sharing.
Despite the challenges, PNG can represent better prospects for some Chinese, both financially and in terms of fresh air, food and quality of life, than what they have left behind. The diaspora is as much a story about individual Chinese people who have left their home country to escape poverty and lack of opportunity. Will they, like the generations before them, build their empires and move on to Australia or New Zealand, return to China or mellow into island life?
Suspicions
Is there much violence towards the Chinese community in PNG? I ask George Shao, an accountant who first left Shanghai in 1991 to set up business with Vanessa Chan, a daughter of former PNG prime minister Sir Julius Chan.
Shao sold the tourism business and left PNG in 1998 to settle in New Zealand but recently has been encouraged to return.
A small shareholder in a hydro-electricity project being built by Chinese state interests, Shao is president of the PNG Table Tennis Federation, which has caught the attention of Chinese President Xi Jinping. Shao also is secretary-general of the China-PNG Friendship Association and PNG Committee for Promotion of Peaceful Reunification of China.
Asked about violence, Shao lifts his shirt to show an unclipped holster and pistol: “Not everyone carry, but for safety. PNG should be the best place if security can be improved.”
During the past decade, the Port Moresby skyline has been transformed by commercial and residential developments spurred mostly by Chinese investment. An ornate Chinese gate announces a controversial new Chinatown development that consists mostly of three cranes behind a big fence on formerly state-owned land that was assigned to Chinese business.
The quality and cost of Chinese investment is a topic of hot debate from the PNG capital to the Highlands. So is the influx of Chinese workers and suspicions that China business, large and small, often is done outside established rules.
In response to China’s outreach, investments from Australia, the US and Japan are being stepped up. The US is building a new embassy in Port Moresby. Japan is the favourite to redevelop the deepwater port in Rabaul, and Australia is building a high-speed internet cable to PNG to keep out a rival plan by China’s Huawei.
Chinese roots in PNG are deep. The first wave came as carpenters and labourers to British plantations and German settlements around Rabaul in East New Britain in the late 1800s.
More than 80 per cent of Chinese migrants to PNG have come from Fujian Province on the southeast coast opposite the island of Taiwan.
The Chinese families that flourished in business in Rabaul moved to Port Moresby, from where they established trading empires across the fledgling nation. Most moved on to resettle in Australia and New Zealand.
But like many other countries, PNG experienced a second wave of Chinese migration after the 1989 Tiananmen Square demonstrations and bloody crackdown.
These new settlers have been followed by Chinese state-owned corporations, with sometimes oblique lines between their diplomatic and commercial objectives.
New Chinese settlers, some from the most humble beginnings, are building mini-empires across PNG as they move up the commercial food chain from corner store retail to timber, gambling and construction. It can be difficult for locals to separate the Chinese state from commerce.
And there are tensions between some of the old and new settlers.
“Established families in Madang complain the new Chinese have only two words of English,” says Paul Barker, executive director of the Institute of National Affairs in Port Moresby.
“They are: ‘How much?’ How much can apply to any circumstance whether it is Customs or police on the doorstep, a rascal holding them up, that applies.”
Legal crackdown
Yanshun Yan, 50, is president of the PNG Fujian Entrepreneurs Association. The Weekend Australian met Yan for an elaborate tea ceremony and cigarettes at the association headquarters near the Airport Express Hotel in Port Moresby at a time of turmoil.
Yan was travelling to Beijing for a meeting of clan associations hosted by the central government, where the Communist Party will network with key community figures abroad.
He attended the 70th anniversary of the Communist Party in Beijing and says he enjoys a good relationship with the Chinese embassy in Port Moresby.
Yan’s travel plans had been complicated by the murder of a Chinese store owner by “rascals” in Kimbe in East New Britain. The family of the murdered trader was seeking advice on repatriating the remains to China.
To top it off, Port Moresby police, reportedly watched by Australian Federal Police, had raided a nearby karaoke nightclub on suspicions of prostitution. There were no arrests but six women on tourist visas were questioned.
In the wake of the raid, PNG Prime Minister James Marape warned illegal immigrants and foreigners involved in illegal activities to leave the country before they were caught and that the government would be increasing penalties for people who breached immigration laws.
The Post Courier newspaper said in an editorial the country was “being swarmed by aliens, particularly from Asia and the Indian subcontinent, who have entered the country, some without a doubt illegally, and taken to business activities in many parts of the country”.
Yan has been in PNG since 1998 and is considered one of the most successful business owners in the country. He says the local association plays a key role in facilitating or helping the local Chinese communities to establish business and understand the local rules, culture and compliance.
Some established business owners have complained that they are not able to compete with the new arrivals, who they say do not follow the rules.
But Yan says tensions reflect business competition. “When they first arrived they (new Chinese migrants) had a lot of communication with old families,” he says.
“They bought a lot of cargoes from them but eventually they started importing independently.”
PNG-born Chinese businessman Kenneth Woo says when the new wave of Chinese first arrived they basically took them on and competed against them. But Woo has since leased his shop to the newcomers. “We had to lease out because we could not compete,” he says. “The first year we opened we were doing very well and then all of a sudden there were six shops all around us doing the same type of business we were. I don’t know how they can pop up everywhere. I can’t compete against them with retail because they bring in the goods themselves from China.”
Making progress
Kenny Lin is leading the transformation of small business in Kokopo, a village near Rabaul in East New Britain, which locals increasingly are calling KongKong Po.
Lin came to Kokopo 20 years ago and has built a Top Brat empire that stretches from convenience stores to horse racing betting shops and car hire. He is branching out into plantation balsa wood, which can be used to make blades for wind turbines.
“We are Chinese,” he says. “Very hardworking people.” In the 20 years he has been in Kokopo, Lin says, he has spent the entire time in his shops. He has not ventured out to see the war relics or dolphins or dive in some of the best underwater locations the world has to offer.
As a young man, he says, he would drink and play cards with friends. Today, things are more subdued. “I eat, work and sometimes watch TV,” he says. “Sometimes there is whisky on Saturday.” Lin may have come to make quick money but he says he is making Kokopo home. He has three children who he says were “made in PNG”. One of them is studying in Perth.
Lin employs a burly local security guard for protection but says there is a growing Chinese community and friendly locals.
“I employ local people and support local people,” he says. Lin’s various businesses employ 140 people and he says he pays his taxes and duties including GST. He was enticed to PNG by an in-law and set to work in a small convenience store.
When he arrived, retail margins were 30 per cent, much higher than in China. Today, as the number of Chinese-owned retail shops mushrooms, margins have shrunk to 10 to 15 per cent.
Despite this, Lin says, “I am going to build more … Here is very good.”
All about the money
Anna Liu represents another extreme. She grew up in a poor family in Guandong province in China. As a child she used to chop sweet potato leaves and boil them to feed pigs. At the age of 10 she was left by her parents to look after her brothers and sisters.
After she married, her husband moved to PNG but after eight years stopped sending money home. Liu flew to Port Moresby to find him, became pregnant with her fourth child and made plans to return to PNG permanently.
Liu is now a budding entrepreneur in Kokopo. Together with her widowed sister, Annie, and daughter Alinda, Liu has opened Kokopo’s first 24-hour convenience store selling tinned meat, oil, beer and betel nut. She has a service station next door, a hairdressing salon upstairs and a new restaurant that operates from the school canteen on weekends. If there is a new wave of Chinese migration to PNG it is the Communist Party-owned corporations. These companies are bidding aggressively for development projects across the country.
“The investment is genuine,” says Graeme Smith, a fellow in the Australian National University’s department of Pacific affairs. “These big China companies are all there to make money. They are not there on a geo-strategic mission.” The difference now under the Belt and Road Initiative is that state-owned companies are expected to demonstrate they are on board with something more strategic. “When their interests align with the Chinese state they will absolutely carry the Chinese state’s water,” Smith says.
‘Safe’ life
There is a saying in China that if you want your community to be prosperous, first build a road. Peter Lee is the local manager of Covec PNG, a Chinese government-owned corporation that operates a quarry. The company has high ambitions but has not been successful in bidding for roadwork in Kokopo against Australian companies funding construction works though AusAID. “Australia has started spending a lot of money in the last year,” Lee says.
The Japanese are expanding the airport and are expected to win contracts to refurbish the Rabaul deepwater port. Covec is supplying the aggregate but Lee says the local government does not have the funds to bid for roadworks.
Covec has been in PNG for more than 20 years and Lee recently arrived in Kokopo from Mount Hagen in the Highlands frontier, but his family is in China. He spends 11 months of the year away from home. We meet at a newly opened Chinese restaurant and Lee is casually dressed. He likes living in Kokopo and says “we are afraid of living in Port Moresby”. Covec has a compound full of worn road machinery where the managers live alongside local employees. Lee says it employs about 70 locals on salary with full benefits. Lee is easing well into what he says is a “safe” life in PNG.
There is little doubt that China’s influence will continue to grow in PNG and across the Pacific. But there are many tensions that will not be easily solved.
This is particularly so if local Papua New Guineans remain locked out of the commercial heart of the nation by a more entrepreneurial class that has business in the blood.
This series is supported by the Judith Neilson Institute for Journalism & Ideas