From Pioneers to Professionals: African Brokers in a Maturing Chinese Marketplace
Heidi Østbø Haugen`s new article explore the role of brokers in the establishment and development of African trading communities in China.
Brokers have played a key role in the establishment and development of African trading communities in China. Nigerians were the first African businesspeople to settle in the commercial hub of Guangzhou, South China, in the 1990s. They initially focused on trade in used vehicles and spare parts but soon ventured into a wide array of business sectors.
Deficient commercial infrastructure in Mainland China initially compelled most foreign merchants to source goods via Hong Kong. This changed as Nigerians and other Africans set up as brokers in Mainland China and made the market accessible to itinerant traders and customers at home. In addition to mediating between itinerant traders and Chinese manufacturers, resident Africans offered accommodation, food, money transfer, interpretation, and logistics services. Initially, the brokers could charge generous commissions, from both Chinese producers and African customers.
As the market matured, however, they experienced a double squeeze; clients became more familiar with Guangzhou’s trading economy and eliminated the brokers from transactions with suppliers, and the costs of being based in China mounted as immigration control tightened. In response, some brokers have moved toward trading on their own by investing previous gains into a business. Others seek to control larger parts of the value chain by setting up production, warehouses, and wholesale outlets.
Brokering has become professionalized, and the barriers to entry are higher. These changes are examined by drawing upon data from sixteen months of ethnographic fieldwork in Guangzhou between 2009 and 2017, with follow-up research in Nigeria, Ghana, Togo, and Gambia.