Casrech’s website includes photos of the organization’s senior executives at the Casa Rosada, Buenos Aires’ presidential palace, posing enthusiastically alongside President Cristina Kirchner, who they accompany on her visits to China. And with good reason: Casrech now controls 30 percent of the supermarket sector and competes with all the major distributors, such as the French giant Carrefour and the American company Wal-Mart, who have already received several battle scars as a result of the competition. The Casrech supermarkets employ over 19,000 people and, according to Calvete, can make a combined annual turnover of 8.3 billion euros.65 Furthermore, Casrech has begun to expand, launching its own brands and developing every aspect of the business. This mammoth organization has managed to trump the competition thanks to its centralized purchasing system. This allows Casrech’s supermarkets to offer customers each of the fifty basic products of domestic consumption at between 5 and 15 percent less than their competitors. This impressive margin wins over the customer and wipes out the competition.
“The Chinese overseas community is like a giant Masonic lodge,” says Calvete to explain the rapid and well-organized progression of Chinese supermarkets in Argentina. This is a reference to the fundamental importance of “being Chinese” in terms of joining the business. As a result of their Chinese blood and place in the social order, new arrivals receive financing, advice and support in order to set up their own shop, where they will never be the outright owners. “Normally various Chinese people have shares in every supermarket. The person who puts the most money in will control the business, but ownership is always shared,” says Calvete. “In fact, twelve Chinese families control the whole business. They were the first ones to arrive here and they have shares—however small—in all the supermarkets.” He tells us that Casrech is already functioning in the same way in Bolivia, Chile and Ecuador and plans to export products to Peru using the network of chifas (Chinese restaurants in the country).
The press and some politicians have warned against the business practices used by the supermarkets’ Chinese owners, whom they accuse of evading taxes, having links with the Chinese mafia, and not respecting the country’s hygiene legislation. “Casrech is extensively lobbying the Argentinian government. This is how they avoid paying some taxes,” explains Gustavo A. Cardozo of the National University of Tres de Febrero. “The reason for the low profit margin of the business could be that it is [an instrument] for money laundering,” he points out. Despite the criticism, the Chinese proprietors do not shy away from demonstrating their ownership of the supermarkets: they can be seen sitting in the doorways, watching over their territory, while Bolivian immigrants work at the butcher’s counter or stack shelves and Argentinian customers make their way to the till, providing an endless supply of fuel for the business.
3
Chinese Mines in the New Wild West
“Everything under the Heavens belongs to the Emperor: everyone who lives in this territory is the Emperor’s subject.”
From The Book of Odes, western
Zhou dynasty (1046–771 BC)
Weighed down by twice as many passengers as its capacity or common sense allows, the minibus jerks its way along the narrow gravel road which plows, bend by bend, through the Hengduan Mountains towards the town of Zhangfeng in China’s Yunnan province. The roar of the motor echoes through the bodywork, competing with the “turbo-pop” which is spouting out of a Chinese radio station and adding a layer of surrealism to the tobacco-smoke-filled air inside the vehicle. The bus is packed with a jumble of workers, women, children and all kinds of bits and bobs, condemning the traveler to a hellish journey along the China–Burma border. Soon nausea gives way to outright retching on the part of weaker travelers, culminating in little puddles of vomit appearing inside the bus. Despite the horror show occurring inside his vehicle, the driver impassively follows his route until he reaches his final destination.
The journey to Zhangfeng reminds the traveler that China is still a developing country and that the mirages of Beijing and Shanghai are really no more than that: oases of abundance among a general framework of poverty. Phyu Phyu Win,1 a Burmese environmental activist from Kachin Development Networking, a group active on both sides of the border, has arranged to meet us in a mediocre hotel on the outskirts of this small Chinese urban hub. After a long conversation in the hotel lounge, she offers to guide us through one of the dramas that have struck this region: deforestation.2 We set off along the dusty roads which unite Tengchong, Yingjiang and Ruili, three Yunnan Province towns on the route of a significant amount of the country’s cross-border trade, to witness the environmental disaster taking place here.
Pointing towards the bare Burmese mountains on the horizon, Phyu Phyu Win assures us that these forests have been literally wiped off the map. “Two hours away from the border on the Burmese side there is practically nothing left,” she tells us. The mining industry has been out of control now for several decades, she explains, and the mining companies are destroying the forests in order to facilitate the extraction of gold and jade. “Chinese companies are responsible for the damage. But the Burmese government allows the destruction to happen.” The situation is not as brazen as it was a few years ago, but the constant trickle of lorries coming from the Burmese border carrying enormous tree trunks in broad daylight is more than enough proof that business is still going strong. On the outskirts of Yingjiang, the lorries drive in and out of open-air warehouses at the side of the road, where tons of logs can be seen waiting in piles to be processed.
The official in charge of exports at the state-owned Ruili City Yasen Wood Industry Company backed this up. “It doesn’t matter what type of wood or how much, or whether it’s rare wood or not; we can supply as much Burmese timber as necessary,” he told us while we were posing as European buyers of parquet flooring material. The company’s premises are filled with the relentless sound of cutting machines and cranes lifting tree trunks. Hanging on the walls of his office we find more evidence to support his words: maps of the company’s forestry concessions in the neighboring country, and photographs of the company’s Chinese owners posing alongside Burmese generals. A report published by the British NGO Global Witness pinned a devastating statistic on the illegal logging trade between the two countries: every seven minutes over each and every day in 2005, a truck loaded with 15 tons of illegally logged Burmese timber crossed a border post with China.3
In other words, a million cubic meters’ worth of timber disappeared every year from Burmese forests at that time, gobbled up by Chinese demand. The evidence of this forestry genocide must have jolted some consciences in Rangoon,4 Kunming and Beijing in the run-up to the 2008 Olympic Games, as new restrictions imposed on the logging trade following the highly critical report caused a 70 percent fall in illegal trade, according to Chinese customs data gathered as part of a new Global Witness study in 2009.5 However, Phyu Phyu Win confirms that business had picked up again in 2010 in Kachin, Burma’s northernmost state. “Every night dozens of trucks loaded with timber cross into China,” she tells us—a trend later confirmed in a very critical report published in November 2012 by the Environment Investigation Agency. Burma’s great wealth of forests and biodiversity—among the largest in the world—along with its vast reserves of gold and jade, have caused China to extend its tentacles into Kachin, fiercely exploiting its mineral deposits and forests. For China’s companies and entrepreneurs, such vast natural treasures represent a business opportunity that is too good to miss, particularly as there are no restrictions or any competition from the domestic market.
After Burma gained its independence from the United Kingdom in 1948, Kachin suffered decades of armed conflict as a result of its separatist aspirations until 1994, when the Rangoon-based government and the ethnic guerrilla groups agreed to a ceasefire that paved the way for a fragile peace that lasted until mid-2011, when hostilities resumed between the Burmese Army and the Kachin Independence Army (KIA).6 Until then, the territory had for seventeen
years come under the more or less effective control of the Burmese ruling military junta, as it remains to this day. The only exception is seen in certain areas close to the border where the ethnic groups have maintained their military and administrative structure.7 However, in reality it hardly matters who controls which part of the territory: China and its companies play a decisive role either way. The country’s limitless funds allow it to offer both sides the financing they need. The usual formula applies: the Burmese offer concessions to exploit natural resources to the highest bidder while the Chinese hand over the money and don’t ask questions. The first side becomes obscenely rich while the second carries off the jade, gold and timber. The only losers are the region’s over 1 million mostly impoverished inhabitants, who have seen no improvement in their living conditions despite the brutal ransacking of their national heritage.
It was China’s role in deforestation in northern Burma that brought us to the region, but we soon realized that this was just the tip of the iceberg of a phenomenon that stretches across the entire mining sector (including the exploitation of forests). Although China has no military control, its activities in Burma demonstrate some of the classic signs of a savage act of plundering committed by a neo-colonizer. This can be seen clearly in the act of looting natural resources without creating any added value at a local level. The wave of Chinese migrants arriving in northern Burma—estimated at somewhere between 1 and 2 million people8—contributes to this impression. Or at least that was how Phyu Phyu Win and the other activists and experts we spoke to in both Burma and China described this process. Therefore, Kachin and, by extension, Hpakant, the center of the imperial jade extraction industry, became the next stop on our journey.
AN EXPLOSIVE COCKTAIL: JADE, HEROIN, PROSTITUTION AND AIDS
The slow, incessant jolting eases up little by little until the train finally grinds to a halt in the middle of the track. It is past five o’clock in the morning but there is still not even a crack of light in the sky. The cool wintry air of Southeast Asian mornings is coming in through the window. For a while silence reigns in the darkness, but, as the new day dawns, passengers begin to leave their cabins and the word starts spreading through the train. Several kilometers ahead of us on the route between Mandalay and Myitkyina, the capital of Kachin State, a train has gone off the rails. The adventure of traveling on a Burmese railway is beginning to follow the expected pattern; in fact, the first hour on board was enough to get a sense of the dangers involved. Along with the usual horizontal jolting typical of any narrow-gauge railway there was also a far more worrying vertical jumping motion. With every jolt of the train, dozing passengers woke up and were forced to seek comfort in exchanging conspiratorial glances with their fellow travelers. Faced with a derelict railway dating back to the colonial period, it is a miracle that this story does not end more often in tragedy.
Inside our compartment, the tedium of long hours spent waiting around is interrupted only by the ear-shatteringly loud music coming from the restaurant carriage, together with thick smoke and the smell of fried rice. The first-class area of the train hardly stands out for its creature comforts, but at least it is relatively sheltered from the endless movement of people and there is more precious personal space than in the crammed standard-class carriages. Sitting on the two lower bunks, the pair of Chinese travelers sharing our cabin have already reached for their cigarette packets and are smoking away non-stop. The usual feast is waiting on the built-in table under the window: various types of fruit, little cakes, packets of dried fruit and other Chinese snacks, along with a cheap bottle of whiskey and a Thermos of tea for each of them. After the first few drinks, our companions break the ice.
Unlike his more reticent colleague, Xiang is in the mood for talking and he soon begins to tell us more about himself. He is thirty-six years old and comes from Harbin in northern China. Roughly twice a year he travels from Shanghai to Burma to stock up on supplies of jade which he then resells in his own country. He has been doing this for the last decade and has found that acting as the link between the highest-quality jade in the world and the market most prepared to spend money on it offers some fantastic opportunities. To illustrate this, he opens a small suitcase that he has been keeping under his bunk and from the pocket of a perfectly folded waistcoat he carefully takes out a silver ring crowned with the greenish-colored stone. He smiles proudly as he shows it off, holding it delicately between his thumb and forefinger. “I paid 600 US dollars for this in Rangoon; in China I can sell it for 3,000 dollars,” he tells us, quietly. The gleam in his eyes gives away the satisfaction that comes from knowing that he is in possession of a wonderful treasure.
Ten years’ experience in the business has helped Xiang to optimize his earnings, as he has gradually managed to cut out the network of middlemen who originally gave him access to the highly desirable stone. The recipe for success is all about having the right contacts in order to buy the jade directly on site. “I’ve known the owners of the mines for many years now and so I can buy jade at a price that is 100 times better than what they would give to a stranger. The key question is whether you are inside or outside the business.” Xiang insists that in order to be inside you have to travel, as he is doing, to Hpakant, a remote mining enclave in the heart of Kachin State. The bleak mining settlement of Hpakant and its emerald-green gems that have seduced the Chinese people since time immemorial were also our motivation for spending the last twenty-three hours traveling from Mandalay to Myitkyina on board this ancient Burmese train.
The train finally starts up again and sets off through a spectacular landscape. Outside the window we can see the fierce natural beauty of tropical Asia, as well as the poverty of the villages where children play barefoot while their mothers wash clothes in rivers full of rubble. At this slow and weary pace, the train will not arrive in Myitkyina until two o’clock in the morning. There, Xiang explains, another logistic obstacle awaits us before we can get to Hpakant: a hundred kilometers and a seven-hour journey minimum during the dry season. When we start dropping hints, Xiang quickly puts an end to any possibility that we might be able to accompany him to the home of the jade. “It’s a dangerous place. There are fights, thieves and violence. You need to take protection,” he tells us immediately. “Foreigners are not allowed into the territory,” he adds, insisting that with our Caucasian features we will have no chance of crossing the three military checkpoints that have turned the mining settlement into an impregnable fortress. For many years, nobody has been able to get in without the required permits. Nobody, as we will soon see, apart from the Chinese.
Hidden in a remote jungle in the foothills of the Himalayas and isolated for several months of the year by the heavy rains of the monsoon season, Hpakant has become the epicenter of the world’s jade extraction industry, its mountains and subsoil harboring the only significant jadeite reserves on the planet.9 The purity and intense color of the so-called “imperial jade,” as well as its association with immortality and perfection, have caused the stone to be revered as a talisman in China for centuries. In recent years this has become an outright craze: at a Christie’s auction in 2010, a Burmese jade necklace was bought for $7.2 million, the third most expensive piece of jewelry sold in the international world of auction houses that year. However, it is unlikely that anybody attending the auction that day in glamorous Hong Kong would ever have suspected that the reality behind the celestial luxury so characteristic of China is in fact a modern-day hell.
The Burmese military regime and Chinese companies share responsibility for this particular underworld. Phyu Phyu Win, the environmental activist we met in Yunnan, described Hpakant as a medieval, inhuman place where thousands of young men are exploited in mines in return for miserable wages; an enclave where people fight cruelty and desperation by injecting themselves with heroin; a place where people share hardships, syringes and prostitutes who travel there from all over the country; a mining community rife with AIDS, endemic malaria and casinos; the home of de
stitution, violence, abuse and death. “It’s a social catastrophe,” she concluded. Her story revealed the sinister heart of a business that causes widespread marginalization and suffering while one of the world’s worst dictatorships and its Chinese comrades make fortunes thanks to the desire of Beijing’s and Shanghai’s millionaires to flaunt their new-found wealth.
It is therefore hardly surprising that there is a very strong military presence in Hpakant. The Burmese generals and their like-minded business magnates have invested in the mines, and these investments produce significant dividends. The territory is also politically sensitive, not only because it was under the control of ethnic groups up until the 1994 ceasefire, but also because a Russian mining company is supposedly extracting uranium in the area.10 However, most of all it is in the interests of the regime to keep Hpakant cloaked in secrecy in order to hide the social chaos and the legal and ethical violations which take place there on a daily basis. This excessive behavior is the result of a savage production schedule, according to a teacher who spent several months in the area. He tells us that the thundering of heavy machinery belonging to the concessionary companies, most of which are Chinese,11 can be heard twenty-four hours a day, seven days a week. Blast after blast, the extraction process has caused the demolition of entire mountains, whose soil is then removed inch by inch in order to dig up rocks of jade.
China's Silent Army Page 11
