China appropriates foreign and domestic land to build its rubber empire

Agweek | 01/12/2009

Denis D. Gray

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 now are 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 already has 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.

Miracle or anarchy?

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 also are 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 exploitation.

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.

Worldwide agriculture

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

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 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 of corn in the south.

Indonesia is moving to develop biofuel plantations with The China National Overseas Oil Corp. 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 says companies have 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 says.

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