China Logs, Mines, and Farms the World

International Herald Tribune

China farms the world to feed a ravenous economy

The Associated Press
Sunday, May 4, 2008

CHALEUNSOUK, Laos: The rice fields that blanketed
this remote mountain village for generations are
gone. In their place rise neat rows of young
rubber trees – their sap destined for China.

All 60 families in this dirt-poor, mud-caked
village of gaunt men and hunched women are now
growing rubber, like thousands of others across
the rugged mountains of northern Laos. They hope
in coming years to reap huge profits from the
tremendous demand for rubber just across the
frontier in China.

As Beijing scrambles to feed its galloping
economy, it has already scoured the world for
mining and logging concessions. Now it is turning
to crops to feed its people and industries.
Chinese enterprises are snapping up vast tracts
of land abroad and forging contract farming deals.

This quest raises both hope and criticism.

Laos’ communist regime touts rubber as a miracle
crop that will help lift the country from the
ranks of the world’s poorest nations. China is
expected to consume a third of the world’s rubber
by 2020, become its largest car market and put
200 million vehicles on the road.

But some Laotian farmers are losing their
ancestral lands or being forced to become wage
workers on what were once their fields. Chinese
companies are accused of getting rubber
concessions from officials and not compensating
farmers. They are also accused of violating laws,
human rights and the environment, under
conditions described by experts as “anarchic.”

“The Chinese companies in the north are a bunch
of thugs,” says Charles Alton, a consultant in
agronomy for international agencies in Laos.
However, Alton says, the “unpoliced, unregulated
situation” in northern Laos is ripe for

The Chinese deny or don’t comment on such allegations.

“I haven’t heard of the bad behavior of Chinese
companies abroad, but Chinese companies which
intend to expand abroad must know it is important
to have a good relationship with the local
people,” says Ju Hongzhen, president of the China
Rubber Industry Association.

China’s State Forestry Administration last year
issued guidelines for Chinese firms running
overseas plantations. The U.N. Food and
Agriculture Organization is also scrambling to
put out guidelines for a fast-moving global

From Southeast Asia to Africa, the Chinese are
farming oil palm, eucalyptus, teak, corn,
cassava, sugar cane, rubber and other crops. As
in Laos, the industrial-size farms are variously
viewed as an ecological nightmare or a big step
toward slashing poverty.

In the Democratic Republic of the Congo, a
Chinese telecommunications giant, ZTE
International, has bought more than 7 million
acres of forest to plant oil palms. In Zimbabwe,
state-owned China International Water and
Electric Corp. reportedly received rights from
the government to farm 250,000 acres (101,174
hectares) of corn in the south.

Indonesia is moving to develop biofuel
plantations with The China National Overseas Oil
Corporation. The London-based Environmental
Investigation Agency, an advocacy group, believes
other deals are in the works, often through proxy
companies because of long-running anti-Chinese
sentiment in the country. The group says the
project would destroy natural forest.

In Myanmar, rubber concessions have gone to at
least two Chinese companies, Ho Nan Ching and
Yunnan Hongyu. Refugees fleeing Myanmar’s
military regime say troops are forcibly evicting
farmers to make way for rubber plantations,
including some run by Chinese enterprises.

A Chinese-Cambodian joint venture,
Pheapimex-Wuzhishan, converted land of the Phong
tribal people into a tree plantation 20 times
larger than allowed by law in Cambodia, according
to the environmental group Global Witness. The
group says the concession in Mondulkiri province
encroached on grazing grounds, destroyed sacred
sites and used toxic herbicides.

Another Chinese enterprise in Kratie province
circumvented the size restriction by registering
as three separate companies, Global Witness says.

In Beijing, the Commerce Ministry declined to
answer written questions about China’s global
reach in agriculture or operations of Chinese
enterprises abroad except in Laos, where it said
companies had a “very strong awareness for
environmental protection.” Local residents
welcome the new developments because incomes have
increased by as much as five times, a ministry
statement said.

However, the central government in Laos last May
ordered a moratorium on concessions over 100
hectares (247 acres), in part because it had
become clear many were covers for logging.

Entire hills in the north have been scalped of
green cover, and rubber trees penetrate into the
tangled natural forests. Also being cleared are
secondary forests, sources of medicinal herbs and
edible plants that tribal people have depended on
for generations.

The government edict against concessions appears
to have been ignored in the north, where local
officials often a make the rules in an
environment of corruption, ill-defined land laws,
vague agreements and conflicting agencies.

“The Chinese companies do everything in their
power to take advantage but they are also taken
advantage of. The system is corrupt and there are
loopholes and sometimes it works in their favor
and sometimes against them,” says Weiyi Shi, an
American economist who recently completed a study
on the rubber industry.

The study found that when the China-Lao Ruifeng
Rubber Company moved in, the frontier village of
Changee lost most of its rice fields and grazing
land and its burial grounds were desecrated. The
pleas of villagers got no result and some
protesters were reportedly held at gunpoint, with
the Chinese using coercion through local

A company executive, Zheng Fengqi, contacted in
China, denied there were any protests on the
concession granted by the military.

“The local people also liked the project because
they could earn more money and lead a life of
better quality,” he says.

Many independent farmers do indeed embrace the
Chinese with enthusiasm, hoping to replicate an
earlier rubber bonanza in China’s neighboring
Yunnan province. Some have personal contacts,
even relatives, living in China and set up
informal business arrangements with them.

Some villagers even torch their surrounding
forests, hoping the Chinese will come in and
offer them rubber trees.

“They see what is in China, where people have
gone from wooden houses to concrete, walking or
bikes to motorbikes and cars, buffaloes to hand
tractors and kerosene to electricity,” says
Michael Dwyer, a natural resources researcher
from the University of California, Berkeley.
“They want the same.”

Farmers can hope to take home up to US$3,000
(¤1,900) from a hectare of rubber Рroughly seven
times more than from growing rice. But it will be
another six to seven years before latex begins to
ooze from most trees in the north.

“If the price is high we will prosper,” says Chan
Phoung, one of the villagers at Chaleunsouk,
inhabited by the Khmu ethnic minority. “If it’s
low we don’t know what we will do.”

A friend adds: “It’s like raising a pig for
profit – it may die before you can sell it at the


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