China Economy: News & Discussion

[badguy2000]

Really? Better to have a job than be bankrupt.



Chrysler sales are up 25%. Doesn't have much to do with us. We took over Nissan to make us the 4th largest automaker in the world. Now Daimler wants to join our alliance.

yes, but bankrupt once first. Besides, as I know, Chrysler has divorced with Daimler after such a failed marriage,hasn' it?

 

[Armand2REP]

yes, but bankrupt once first. Besides, as I know, Chrysler has divorced with Daimler after such a failed marriage,hasn' it?

US government owns it, Fiat owns 35%. Chrysler is selling cars now because they recently started making low-fuel consumption European models. They went bankrupt in the first place because they built American gas guzzlers.

 

[anoop_mig25]

and still usa cant do anything . i read in some newspaper that in order to introduce our product in china (mostly sophisticated ) one has to reveals all its code i.e how it work etc or partner will local firm and then sell it trough

 

[badguy2000]

Europe isn't going anywhere. Considering China is on a mad dash to implode, it might be a lot sooner than expected!

anyhow, in the coming 2-3 decades, the world will be controled by 3 dominant powers : USA, EU and CHIna,although perhaps EU will be the weakest of the big 3, due to its disunity

 

[LETHALFORCE]

anyhow, in the coming 2-3 decades, the world will be controled by 3 dominant powers : USA, EU and CHIna,although perhaps EU will be the weakest of the big 3, due to its disunity

China is dependant on EU and USA for trade, China does not have an independent self sustaining economy and Both US and EU economies are 5 times bigger than China, how do you place China in the same league?? Even today China is a little bit ahead of Germany one European country so don't overstate the Chinese economy which is headed toward major deflation in the near future.

 

[LETHALFORCE]

China still No. 1 foreign holder of Treasury debt

http://news.yahoo.com/s/ap/20100430/ap_on_bi_ge/us_foreign_holdings_3

China still No. 1 foreign holder of Treasury debt

By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – Fri Apr 30, 5:45 pm ET

WASHINGTON – The government's latest accounting of holdings of Treasury securities shows China still in first place as the largest foreign holder of U.S. government debt.

The Treasury Department said Friday that China's holdings at the end of December stood at $894.8 billion, exactly the same amount it reported in a preliminary benchmark revision of the data in February.

That revision returned China to first place, a spot it appeared to have lost to Japan before the data was revised. Japan's holdings in the latest update stood at $765.7 billion in December, $3.1 billion lower than the $768.8 billion reported in February.

On Feb. 16, the government had reported data that showed China had been surpassed by Japan in terms of the size of its Treasury holdings.

However, just 10 days later it reversed that finding based on its annual benchmarking of the holdings data. That benchmarking is done based on more detailed information that provides a better look at the citizenship for the holders of the securities.

The initial monthly reports track the countries where the purchases are made but annually, the government tries to sort out those purchases with more detail on citizenship. When that occurs, the government then has a better accounting for purchases by Chinese investors in such places as Britain.

The preliminary benchmarking for holdings as of June 2009 were revised with a final revision on Friday. The second revision made only modest changes to the figures reported for most countries.

The changes left China's holdings as of February of this year at $877.5 billion, marking the fourth straight month that the holdings have declined. The holdings for Japan as of February stood at $768.5 billion, keeping that country in second place.

Eds: SUBS final graf to CORRECT to fourth straight month for China declines, sted of third.

 

[badguy2000]

China is dependant on EU and USA for trade, China does not have an independent self sustaining economy and Both US and EU economies are 5 times bigger than China, how do you place China in the same league?? Even today China is a little bit ahead of Germany one European country so don't overstate the Chinese economy which is headed toward major deflation in the near future.

CHina's nominal GDP is about 5 trillion USD,1/3 about USA's and EU's now. but in on decades or so,due to real growth+appreciation of RMB, CHina's nominal GDP may eaisly meet as eqauls of USA's and EU's.

Guy, give you a attention: In 2010, CHina's nominal GDP was only about 1 trillion USD, about 1/8 of USA's at that time. In one decade,1/8 became 1/3.

The crisis after 2008 fully proves that CHina's economy can keep growing rapidly when sino-USA trade and sino-EU trade declined much.
CHinese economy dependence is already reboked by china's rapid growth in the crisis. why you still hold the idea that is against the reality?

Case is that CHina is still growing rapidly, whatever happens in USA and EU.

 

[LETHALFORCE]

CHina's nominal GDP is about 5 trillion USD,1/3 about USA's and EU's now. but in on decades or so,due to real growth+appreciation of RMB, CHina's nominal GDP may eaisly meet as eqauls of USA's and EU's.

Guy, give you a attention: In 2010, CHina's nominal GDP was only about 1 trillion USD, about 1/8 of USA's at that time. In one decade,1/8 became 1/3.

Highly doubtful with the debt bubble,housing bubble and trade wars that will be coming in the decade. China is holding 1 trillion in worthless US paper so do count that as an asset since there is no market for it. I don't think USA and EU will keep trade with China if China is going to take the top spot. China rose because of USA and USA will knock China back down.

 

[badguy2000]

Highly doubtful with the debt bubble,housing bubble and trade wars that will be coming in the decade. China is holding 1 trillion in worthless US paper so do count that as an asset since there is no market for it. I don't think USA and EU will keep trade with China if China is going to take the top spot. China rose because of USA and USA will knock China back down.

China's propserity is based on Chinese hard-working,rapid urbanization and industrializaiton and long-sighted and orderly rule of one powerful center government.

Trillions of forex reserve is not the reason of the propersity, but the final of the prosperity. Even if the trillions of forex reserve were to disappear overnight,hard-working CHinese could earn another trillions of dollar in several year at most.

About 50% of Chinese are still peasants and there is full room left for industrializaiton. As long as unbanizaiton and labour shift from rural China to urban chinese are not finished , CHinese economy can keep growing much faster than full-mature industrialized economies such as EU and USA.

 

[LETHALFORCE]

BG Chinese economy is an export driven economy which is linked to US economy whatever direction USA wants Chinese economy to go they will steer it in that direction you may disagree but USA is currently paying less than 1% interest on your treasury holdings and has been for atleast last 3 years and China can not do anything about it and is continued to be forced to buy more treasuries. China is not the captain of the chinese economic ship USA is.

 

[badguy2000]

BG Chinese economy is an export driven economy which is linked to US economy whatever direction USA wants Chinese economy to go they will steer it in that direction you may disagree but USA is currently paying less than 1% interest on your treasury holdings and has been for atleast last 3 years and China can not do anything about it and is continued to be forced to buy more treasuries. China is not the captain of the chinese economic ship USA is.

you are misled so much by wall street and "experts" so called


Chinese is a investment-based economy,instead of export-driven economy,guy.
As long as investment is sustainable, Chinese economy is sustainable. export just makes rapid growth even more rapid.

if Chinese were real a "export-diven economy", then Chinese economy would fall when CHinese export fell in 2008 and 2009. but case was contrary to it.

 

[Armand2REP]

China's inflation rate accelerates, bank lending surges, housing prices soar

By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) -- China's inflation rate accelerated in April, as consumer and producer prices beat estimates, while bank lending rose nearly 30% faster than expected.

Analysts said the data, including figures released the same day showing accelerating property prices, would renew policy makers' concerns about emerging bubbles.

"Odds are rising fast that a rate hike will be announced by June, and that yuan appreciation will resume in May," said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong.
The future of Asia Internet companies

Chairman of Japan's Softbank, Masayoshi Son, and the chairman of China's Albibaba Group, Jack Ma, discuss the newly announced partnership between the two companies.

China's consumer prices were 2.8% higher in April than a year earlier, the National Bureau of Statistics said Tuesday, while producer prices were up 6.8%.

Separate surveys of economists by Dow Jones Newswires and Reuters had both expected a consumer price index gain of 2.7% and a producer price index rise of 6.5%.

The data showed price pressures heating up from March, when CPI rose 2.4% year-on-year, while the PPI had gained 5.9%.

"The rate hike is imminent, we just need one more data point supporting," said Dong Tao, Credit Suisse's chief regional economist in Hong Kong, adding that the central bank will be watching to see if annual consumer price inflation exceeds fixed-term savings deposit rates.

The People's Bank of China could tolerate a temporary bout of negative real interest rates, even as signs appear that savers have begun to liquidate their holdings as monthly inflation outpaces one-fixed deposit rates, currently at 2.25%.

Real-estate prices in China's 70 biggest cities rose 12.8% in April from a year earlier, accelerating from an 11.7% rise in March, figures released separately Tuesday by the National Bureau of Statistics showed.

Despite the price gains, Tao said that indications are policy measures designed to cool the housing market have been effective in tamping down sales volumes. Still, Tao said, the PBOC will likely hike interest rates if the monthly CPI reading rises above the government's 3% upper target.

Such an event appears a near certainty, as consumer prices are poised to trend higher in the next three months, affected by the low comparison base from a year earlier, according to reports Tuesday citing Yao Jingyuan, chief economist of China's National Bureau of Statistics.


Meanwhile, Chinese banks extended 774 billion yuan ($113.5 billion) worth of new local-currency loans in April, up from 510.7 billion yuan in March, according to central bank data released separately Tuesday.

That was well above expectations. A Reuters survey of analysts tipped bank lending of 570 billion yuan for the month, while one by Dow Jones Newswires predicted 600 billion yuan.

The April lending data means Chinese banks have extended 45% of their lending quota for 2010 in just four months, adding to the risks that credit could overshoot the government's 7.5 trillion yuan target.

"Without an increase in lending rates, meeting this target will be difficult," said RBC Capital Market's analysts in note to clients Tuesday.

An open-air market in Beijing.

Among other data, industrial output rose 17.8% year-on-year, below a Dow Jones forecast of 18.6% and a Reuters estimate of 18.5%. Retail sales increased by 18.5% from a year earlier, while Reuters had expected 18.0%.

Money supply as measured by M2 rose 21.5% at the end of April, compared to a 22% rise at the end of March. Urban fixed-asset investment gained 26.1% during the January-April period, above a 26.0% Dow Jones Newswires forecast.

http://www.marketwatch.com/story/ch...e-forecasts-2010-05-10-222500?dist=beforebell

 

[Armand2REP]

Last page isn't loading.....................................

 

[Daredevil]

The facade of Chinese economy helping Chinese masses have to come down one day or the other and who better to do than Chinese people themselves. Trouble is already brewing in rural areas of China according to this article.

Millions 'left behind' in rural China

By Mukul Devichand
Presenter, Tiger v Dragon, BBC Radio 4

Guo Long village, China
Beijing has been trying to deal with the urban-rural economic gap

On the road to Guo Long village, impressive new highways peter out into a dirt track - bullock carts rattle through the misty hillsides of China's south west.

But the government in Beijing is paying close attention to villages like this. Resentment is bubbling to the surface and rural Chinese feel left behind.

"Foreign companies come here, employ cheap labour and get all the money," says Chen Fu, a migrant worker who is back to visit his mother.

"It's not something we have any control over. It's our system."

Mr Chen stands out immediately among the bullock carts and farmers working in sugar cane fields, because of his crisply pressed shirt.

He left the village as a teenager 13 years ago. Others have now returned from difficult lives as migrant labourers to work the fields again.

"Foreign companies can exploit us, but many Chinese don't realise what's happening," says Mr Chen.

"They are being fooled by officials in China who have strong connections with foreign companies."

Welfare needs

These are bold sentiments, but rural people feel free to speak out because, after all, they are only echoing a debate that is now raging in Beijing.

According to World Bank figures, nearly 500 million Chinese people still live on less than $2 (£1.40) a day. The rural poor feel that the profits from China's economic expansion have passed them by.

At high-level government meetings, there has been conspicuous soul searching about how to deal with the income gap between urban and rural China.

One of the problems for China's rulers is that they are seen as legitimate only when they deliver economic benefits.

The influential economist Yang Yao recently wrote that the Communist Party's model of growth could soon collapse unless it allows China's 800 million rural people more of a say

He argues that the money eaten up by China's most impressive new projects might be better spent on welfare for the poor.

Ask Prof Yao about China's prestigious airports and showcase modern highways, and he is not impressed.

We will not only make the 'pie' of social wealth bigger by developing the economy, but also distribute it well
Premier Wen Jiabao

"This kind of investment benefits corporations disproportionately more than ordinary people," he says.

"But if you allow people more say in government decisions, then China's growth can be distributed more equally."

He is critical of Shanghai's Maglev train system, a super-fast monorail from the airport to the city which came with a hefty price tag.

"Basically that's a big toy," he says. "Each day it's losing money."

If people could chose, he thinks they would direct the money to the public good, like improving water supplies.

"Although China has grown so fast," he points out, "we still have 200 million people who don't have access to safe water."

Politically charged

The idea that the poor could be given a say in the Communist Party's decisions makes this debate politically charged.

China's rural areas have been a testing ground for reform in the past. In Guo Long, the village head was elected in a democratic process.

But as I left the tiny village of 300 families, I was reminded that the strong arm of the party and state are still everywhere.

I met a smartly dressed woman who told me she was from the village.

"It's improved amazingly here," she said, with flourish. "It's not true that people from here disagree with government policies."

But she refused to tell me her name and when I asked her what she did for a living she would only say, euphemistically, that she "serves the people" - an old Mao-era slogan.

She later admitted she worked in the government and was not from the village at all.

"I'm here to inspect the village and to see what is happening here," she explained.

China's central government has recently pledged to distribute wealth more fairly.

"We will not only make the 'pie' of social wealth bigger by developing the economy, but also distribute it well," Chinese Premier Wen Jiabao said. He promised to "resolutely reverse the widening income gap".

New welfare policies could head off some of the discontent in China's countryside. But there is no plan yet to give rural people a direct voice.

 

[Daredevil]

China boom may be ending, warns OECD

The breakneck Chinese economic boom may be starting to unravel, the Organisation for Economic Cooperation and Development has warned.


By Edmund Conway
Published: 5:30AM BST 11 May 2010
China boom may be ending, warns OECD.

The Paris-based institution warned that the economy, which has continued to grow rapidly throughout the recent global recession, and has helped support growth worldwide, may be facing a sudden "halt in expansion".

The warning, revealed by the OECD's composite leading indicators (CLI) – a measure of economic turning points – will fuel fears that the Asian giant may be set for more troubled times.

The OECD said the CLI for China has dropped from 102.7 points at the turn of the year to 102.2 in March. The fall is significant, since the indicator is regarded as a reliable bellwether for turning points, and has a reliable record of forewarning the peaks and troughs for leading economies in recent years. It came as the People's Bank of China released a report saying that it would improve the technical mechanism of the yuan's peg to the US dollar.

Encouragingly for British policymakers, the CLI for the UK is now up to the highest level since the 1970s, rising from 104 at the turn of the year to 105.1.

The OECD – essentially the alliance of the world's developed nations – also announced that Estonia, Israel and Slovenia are to become formal members, paving the the way to increase the group's membership to 34 countries.

 

[badguy2000]

China Economy Thread - II

Compared with Japan,

China consumes 5 times of steel, 4 times of cars, 3 times of electricity, 2.5 times of foreign trade.

and the Chinese government revenue is twice of the Japanese.

In 2008 alone, China added expressway longer than the total Japanese expressway network. In 2009 alone, China added high speed railroad longer than the total Shinkansen network.

Then Chinese government stated that its GDP is a little bit less than Japan.

And all the dear Indian friends on this forum jumped out,

"The Chinese government overestimated its GDP!".

 

[Armand2REP]

Look at what China bought with Volvo... =xD

 

[badguy2000]

well, in ten years or so

Look at what China bought with Volvo... =xD

airbus might be took over by Chinese like this, mightn't it?=xD

 

[ajtr]

Foreign Companies Chafe at China's Restrictions​

HONG KONG — Foreign companies doing business in China are increasingly feeling as if the deck is stacked against them. China has filed more than a dozen trade cases to limit imports, imposed a series of "buy Chinese" measures and limited exports of some minerals to force multinationals to move factories to China.

Foreign executives in China find themselves increasingly at odds with Chinese officials over these measures, which Westerners view as protectionist and intended to give an edge to Chinese companies. Surveys by Western chambers of commerce of executives show growing disenchantment in the last year and a sense that doing business in China, never easy, is growing harder.

Arriving in Hong Kong on Sunday evening at the start of a nine-day trade mission to China, including stops in Shanghai and Beijing, the American commerce secretary, Gary Locke, said that his agenda for discussions with Chinese officials included Western companies' difficulties in the Chinese market.

"There are some policies of the Chinese government that many countries have raised concerns about, including the United States," Mr. Locke said at a press conference at Hong Kong International Airport.

In January, when the Chinese government overhauled procurement rules to encourage more competition, including from foreign companies, Beijing officials exempted all public works projects, which account for half of government procurement.

Contracts involving state secrets or business secrets are reserved for Chinese companies, and Chinese bureaucrats have been given broad latitude to exclude companies with foreign owners even if the company has been set up in China and has all of its operations in the country.

The trend toward favoring Chinese-owned companies, Chinese and Western executives and economists say, has been driven by a powerful combination of economic nationalism and an evolving blend of capitalism and socialism.

Partly state-owned corporations, armed with lobbyists, have gained considerable influence over the state. Many Chinese executives are former party cadre members whose primary concern now is making a profit, not balancing long-term international policy considerations.

This has many multinational executives deeply worried. They say severe recessions and the near collapse of banking systems in many Western countries a year ago, coupled with China's relatively robust economic performance, have persuaded Chinese policy makers that Western policies of free trade and open markets do not work as well as previously thought, and that new industrial policies are worth trying.

"They say, 'Don't show us broken models; we're looking for a completely different way,' and you see a much greater willingness to experiment with completely untested policies," said a senior executive at a multinational who insisted on anonymity for fear of retaliation by Chinese regulators.

With China already struggling to limit an influx of cash that threatens to push up the value of China's currency against the dollar, the Chinese government has much less incentive these days to welcome foreign investment.

As foreign companies step up their complaints, the Chinese government has already begun responding on a few issues.

In mid-April, the government announced a more open policy toward foreign investment in a few high-tech industries and in some less prosperous regions. It also delayed a plan to give preference in government procurement to products using intellectual property first registered in China. Mr. Locke said that the plan remained a concern.

Chinese leaders are also becoming worried that China's restrictions on other countries' exports and overseas investments might set an international precedent for limiting China's own overseas expansion. This arises at a time when China has emerged as the world's largest exporter and when Chinese companies are making more international acquisitions. Chinese leaders have gone out of their way in recent days to reassure multinationals.

"We will endeavor to create a level playing field for all market players, foreign and Chinese enterprises alike," Premier Wen Jiabao said.

Despite these signs of a softening stance, many barriers remain.

China has been a strong critic of anti-dumping cases elsewhere that limit Chinese exports. Yet the Chinese government itself has become quick to accuse other nations of dumping, or selling goods for less than it cost to produce them. China started 19 antidumping cases last year, tying the United States last year as the third-biggest initiator of antidumping cases, according to statistics gathered by international agencies. China and the United States trailed India and Argentina, but each started more antidumping cases than the European Union.

When China joined the World Trade Organization in 2001, it promised to sign as soon as possible the W.T.O.'s agreement banning discrimination against foreign companies in government procurement. Most industrialized countries have signed the agreement. But China has never actually accepted it, leaving the nation free to adopt "buy Chinese" policies that allow government agencies to favor Chinese-owned companies when they award contracts.

In sectors like green technology, Chinese companies' advantages are clear. State-controlled banks are providing generous loans at near-zero interest rates to Chinese-owned companies that manufacture clean energy equipment like solar panels. And foreign-owned companies that set up wind farms in China have been banned from selling carbon-emissions credits to businesses in Europe, denying these companies millions in revenue even as Chinese-owned companies with wind farms are allowed to sell the credits.

Analysts point to a surge of economic nationalism across China, and not just inside government ministries, after China's heady success in the face of the global downturn. China's commerce ministry, for instance, had a cool but not especially confrontational initial response last autumn to President Obama's imposition of tariffs on tires. But after a weekend of furious exchanges on Chinese Internet chat rooms and suggestions that the Chinese government was not standing up to the United States, the commerce ministry issued a blistering statement describing its plans to investigate automotive and chicken imports. Changes in the way the Communist Party operates have also driven the pro-China measures. Starting with the military in the late 1990s, and gradually expanding to other industries since then, the party has gradually forced its members to choose: they can be military officers or ministry officials, or they can run companies, but they are discouraged from holding government and corporate jobs at the same time.

This shift has meant that corporate executives, often former government officials or military officers who have turned into capitalists, have more of a stake in maximizing their company's profits.

Corporate influence is increasingly apparent. Office buildings near important ministries in Beijing are stuffed with lobbyists. They are usually on the staff of big corporations, as opposed to independent lobbying firms of the sort that populate K Street in Washington.

Corporate executives in China now speak openly of giving instructions to their lobbyists in Beijing when they do not like a policy. When the commerce ministry started its investigation last autumn of American automotive and chicken exports, the ministry said that it was acting at the request of the industries' rivals in China.

China has been particularly aggressive in using its position as the world's dominant exporter of some raw materials to force multinationals to move production to China.

Sergio Iorio, the chief executive of an Italian chemical company, remembers vividly when a weeping Chinese mine owner called him in Genoa two years ago. The Chinese government had imposed a prohibitive export tax that, in a single night, quadrupled the price of yellow phosphorus, a crucial raw material for more than 2,000 phosphorus-based chemicals.

"I was seated, or I would have fallen down," Mr. Iorio recalled.

But Beijing officials provided a loophole: if Mr. Iorio's company, Italmatch Chemicals, manufactured its chemicals in China, they could be exported without the tax.

China has gradually lowered the export tax on yellow phosphorus since then. But Italmatch and other chemical companies are still responding by rushing to expand production in China.

"We don't know if and when this can happen again," Mr. Iorio said.

 

[ajtr]

In Africa Town, everything to gain​

This place is not really China, nor is it Africa; it lies in the midst of major highways in Guangzhou, southern China (formerly known as Canton). Officially, 20,000 Africans – probably more like 100,000 – live in or pass through the 10 square kilometres of "Africa Town," where Igbo, Wolof and Lingala mingle with Mandarin and Cantonese. Some Chinese call it "Chocolate Town."

In this roaring city of 18 million inhabitants and tens of thousands of micro-factories, the commercial activity is very different from the oil deals and huge public-works contracts the Chinese have secured in Africa.

Africans ship back generators, shoes, cotton buds, mopeds, construction materials, human hair and toys. "You can get anything you want in China," quipped Joseph, a peddler from Cameroon, "even blacks."

Each year, thousands of containers are shipped to Dakar, Mombasa, Abidjan and Doula, growing by 294 per cent between 2003 and 2007. Chinese Premier Wen Jiabao estimated bilateral trade in 2008 at $106.8-billion, up 45 per cent from 2007.

"Almost 90 per cent of goods in African markets come from China, Thailand and Indonesia," said Sultane Barry, president of Guangzhou's Guinean community. He runs an entire floor of a 35-storey tower crammed with shops bursting with factory samples, representative offices, freight-forwarding companies, legal and illegal African restaurants, hairdressers and furnished apartments let by the week.

"We're not here for fun," said Ibrahim Kader Traore, an entrepreneur from Ivory Coast. "We work hard and do well. In Abidjan, people still swear by France, where you might be able to save $13,000 over 25 years; in China, you can have $130,000 in just five years."

Between 2003 and 2007, the number of Africans in China grew by 30 to 40 per cent a year. The Chinese government has never faced immigration on this scale before. In 2007, would-be immigrants were shocked when the authorities reverted to a line taken by the public security ministry in 2004: "China is not a migration-targeted country and the new regulations are aimed at attracting high-level foreign personnel. There will not be many foreigners applying for green cards." In other words, there would be fewer visas for Africans.

"The African population shrank," said Mr. Barry. "We were used to being granted one-year visas allowing multiple entry and unlimited length of stay. In 2008, just before the Beijing Olympics, the authorities decided to tidy up. They stopped renewing visas here. You had to return to your own country to get another work permit." Since then, the constant quest for precious visas can become absurd. Ladji, an Ivorian whose visa status is irregular, sells pirated T-shirts. He showed me the dozens of visa stamps he had collected, mostly in Macao. "At present, visas are only valid for 30 days. So you have to leave mainland China once a month."

During the Beijing Olympics, the authorities increased identity checks. Guangzhou is staging the Asian Games in November, which worries both the Africans and their Chinese neighbours: "I sell more than 50 per cent of the output of my brother-in-law's TV factory to Africans," said one saleswoman. "We need them and I'm worried there are going to be fewer of them."

During a police raid in 2009, two Nigerians, desperate to escape arrest, threw themselves through a window. One was seriously cut by broken glass, the other fell on his head and was in a coma for several days. Both recovered but the rumour of their deaths spread rapidly, provoking China's first-ever immigrant riot. Around 100 people stormed Guangzhou's central police station while the international media, sure that the men were dead, complained of China's continual violation of human rights.

"The raids started again," said one African. "My wife opened the door to the police, who wanted to see our visas, but I had their papers with me. The policemen started shouting at my children, who were in tears, telling them they'd go to prison – even though my family is registered with the immigration authorities. They knew our papers were in order."

In 2009, Mo Lian, deputy director of border control operations for Guangdong province's public security department, told Xinhua news agency that 70 per cent of the foreigners detained in 2008 for illegal immigration and overstaying their visas were from Africa. In the first half of 2009 the figure rose to 77 per cent, and a black market began. According to Ladji, you can buy a "genuine" visa: "Some Africans are paying as much as $2,600. They simply use private agents to bribe the authorities."

"By trying to contain immigration, the Chinese government is pushing people into the arms of the African networks, which are just growing stronger," said Ojukwu Emma, president of a Nigerian community association. "Newly arrived immigrants sell their passports for cash. When they are deported, they just go home, change their identity and come back. Others end up in drug trafficking or prostitution. This kind of thing gives Africa a very bad name.

"Our community is fighting lawlessness. We've created the 'peacekeepers,' a band of 50 young men with machetes who catch African criminals and hand them over to the police, to protect our image."

Thanks to this initiative, Mr. Emma was able to sign, in November, 2009, an "amnesty agreement" with the local government, applicable to every African who gives himself up to the immigration authorities. "On March 8, 2010, 400 Nigerians whose visas had expired left China. I also negotiated the fine down to $300, half what it had been. I'm down at the immigration office every day, along with many other African community leaders. As soon as they have the money, those who leave in this way will be able to return legally."

Those who cannot pay the fine or the cost of a plane ticket home go straight to prison and, according to some reports, are put to work in state factories.

"Chinese people have always feared Africans," said a professor at Guangdong University, speaking on condition of anonymity.

The Chinese may be no more racist than any other nation, but less reluctant to show it. Vincent, a Nigerian who has lived in China for five years, said, "Even if it's worse in Indonesia or Malaysia, you get insults like 'black devil.' On public transport, people hold their noses, and some children run away when they see me in the street. You just have to live with it." Jean-Bedel, a Congolese student, said: "When you go to hospital, even if you only have a little fever, they always take an unusually large number of vials of blood from you, and automatically test you for HIV. They don't do it with their own people. They also put on gloves with a great show of taking precautions before examining you. It's only for blacks."

"Those black devils are into drugs and prostitution," said one taxi driver. "They even try to haggle over the fare. I never stop for them. Anyway, I can never understand where they want to go."

Most African migrant workers do not try to integrate. The Africans blame the Chinese: "It's difficult to get closer because most Chinese denigrate us and don't believe we are their equals," said Mr. Barry.

But in the business centres and freight zones of Africa Town, the Chinese have realized that the Africans can contribute to their country's prosperity. In the rest of China, Africans are exposed to hostile reactions.

However, popular uprisings against Africans, as at Nanjing University, Beijing, in 1988, no longer happen. Then, demonstrators attacked African students and poured into the streets chanting "Death to the black devils!" Their excuse was that a Chinese student had been beaten to death, but they were also angry at Africans' interest in Chinese girls.

Since then, mixed marriages and mixed-race children have become more visible around Africa Town. "Thanks to China opening up to the world, there is now some hope for coloured foreigners here," said Yane Soufian. "We are learning their customs and we obey their laws." Mr. Soufian, from Niger, arrived eight years ago "almost broke and knowing only black tea, not green." He has been married for five years to Hanna, a Chinese woman, and they have a 10-month-old son, Arafat. "My in-laws never opposed our marriage. Their only fear is that, some day, we'll go back to Niger. My wife trusts me because she understands that Africans who stay in China have shown they can adapt. They fight for themselves and have joined the modern world. We have a lot of respect for our wives and help them with the daily chores."

Mr. Emma estimates there are between 300 and 400 mixed marriages. Some Africans only marry to obtain a residence permit. Ladji confirmed this: "To be able to start a business you have to marry a Chinese woman. That's what my brother did, and it's what we all dream about."

Africans are learning Chinese, in China, at university or in one of the many Confucius Institutes in Africa. Mr. Barry recalls how ill-equipped the host nation was: "The arrival of the Africans taught the Chinese how to look for business opportunities. The secretaries we had here didn't speak a word of English. Our presence started a craze for learning languages: English and French. The Chinese didn't know the basic rules of international trade. They knew nothing about documentary credit. They paid for everything cash in hand."

A new transnational African business class may be emerging, which could flood sub-Saharan Africa with low-cost products from China. "China is trying to keep things at government level," said Mr. Barry, "but the Chinese people will soon realize that it's better for business to deal directly with ordinary Africans." China would prefer Africans to do business with China without living here, yet 90 per cent of Guangzhou's Africans act as intermediaries between the African continent and Chinese factories.

Beijing has everything to gain from looking after its African population. "The door to the Chinese market has only opened a crack, mostly because visa requirements are so tough," said Zango, a trader from Mali. "The future is elsewhere – India, perhaps."