What a Hong Kong shopping complex tells us about the true nature of globalization.
- By Gordon MathewsGordon Mathews is a professor of anthropology at the Chinese University of Hong Kong and author of Ghetto at the Center of the World: Chungking Mansions, Hong Kong.
The dilapidated, 17-story building known as Chungking Mansions sits in the heart of Hong Kong’s glittery tourist district, on the busy shopping thoroughfare of Nathan Road. But visitors entering the building may be surprised to find themselves in something that looks much more like the markets of Kolkata, Kathmandu, or Kampala — or all of them at once. There are Africans in bright robes and hip-hop fashions, Pakistani men in skullcaps, young Indonesian women in their slinky best, European hippies, and Indian and Nepalese touts offering a room, a watch of questionable authenticity, a suit, or hashish.
Chungking Mansions wasn’t always a low-budget United Nations. Built in 1961 as a luxurious apartment complex, the building soon fell into disrepair. By the late 1960s, it had become the haunt of American GIs on R&R from Vietnam looking for prostitutes; in the decade that followed, its cheap guesthouses became a haven for backpackers on a budget in a newly prospering — and expensive — city.
By the time I first visited the building in 2006, Chungking Mansions had evolved into something else entirely. Over the past 15 years, south China’s emergence as the world’s manufacturer of cheap goods, coupled with Hong Kong’s relaxed visa regulations, has turned Chungking Mansions into a central hub of what I call "low-end globalization." For instance, 20 percent of the mobile phones now in use in sub-Saharan Africa, by my estimates, have passed through this building. The backpackers are still to be found in Chungking Mansions, as are, increasingly, tourists from mainland China. But the complex is now primarily the haunt of traders from around the world. Entrepreneurs from South Asia, sub-Saharan Africa, and beyond have come to seek their fortunes, buying cheap mobile phones, computers, watches, and clothes from Pakistani, Indian, and Chinese vendors. They hawk their wares alongside Asian and African asylum-seekers looking for refuge and among Indian temporary workers flying in from Kolkata. When we think of globalization, we tend to think of the work that happens a mile away from Chungking Mansions in the glassed-in skyscrapers of Hong Kong’s financial district, the province of multinational corporations and their attendant armies of lawyers and consultants. This kind of globalization has no doubt remade much of the world we live in. But over the five years that I have spent living in and studying Chungking Mansions as an anthropologist, I have seen a different form of globalization. The time I’ve spent listening to the stories of African traders and Pakistani merchants and sleeping in the complex’s guesthouses — from the roach-infested to the flatscreen-TV-endowed — has added up to an advanced course in the intricacies of developing-world economics.
Store managers and clerks in Chungking Mansions come from all over the world, but most are South Asian. The building is the only one in Hong Kong with free-to-air South Asian TV: Indian, Pakistani, and Nepali TV channels available to everyone. Bollywood movie stalls and South Asian grocery stores and restaurants abound. The mobile phone trade in particular, carried out in a hundred wholesale stalls on the building’s second floor, is dominated by Pakistanis. It is said that in the 1990s, Pakistani gangs roamed the building intimidating store owners, but by all accounts this is not the case today. As one Pakistani phone stall proprietor told me, "Why should anyone extort money? We can make money much more easily by selling mobile phones!"
In the last two years, more mainland Chinese have opened stores in the building, often with direct links to Chinese factories, seeking to undercut the prices of the Pakistani middlemen. But their businesses often fold on account of the language barrier –Chungking Mansions may sit on Chinese soil, but its lingua franca is English. The Chinese merchants’ relative ignorance of the world beyond China hurts them, too. As one West African trader maintained to me, "Chinese have been in a bottle too long." Nonetheless, they may be the wave of the future; as a Pakistani merchant in Chungking Mansions said, "Between the Chinese and the Africans, maybe in a few years there will be no room for the Pakistanis anymore."
I spent many months behind the counter of a Chungking Mansions mobile phone stall with my Pakistani friend Mahmood, who sold phones primarily to African traders. None of the phones on offer had price stickers. Instead, a trader would approach and ask the wholesale price of a particular model. Mahmood would then ask about a comparable model. If the trader knew nothing of that model, Mahmood raised his initial price 10 percent, based on the customer’s ignorance of the game. But if the customer recognized the model that Mahmood had mentioned, Mahmood knew to keep his price low, for he had a worthy adversary. From there, the haggling would take days, with Mahmood and the trader making offers and counteroffers until the last possible moment, when the trader’s van was waiting outside.
The deal would be for 1,000 or more phones, typically weighed to the final ounce of the 32-kilogram baggage limit imposed by airlines such as Ethiopian or Emirates. Within two days, the phones would be sold in the street markets of Nairobi, Dar es Salaam, or Lagos. Mahmood sold an array of different kinds of phones: branded Chinese models, unbranded knockoffs, used phones, and copies of well-known brands (intellectual property rights, it probably goes without saying, are mostly honored in the breach in Chungking Mansions). He also sold "14-day phones": Nokia and Samsung models returned by their original owners and warehoused, then sold and shipped to Chungking Mansions phone merchants for a fraction of their original price. Mahmood never bothered with new Nokias, Samsungs, Sony-Ericssons, or iPhones — who in the developing world could afford such extravagant products?
The merchants are only half the equation, of course — there are also the traders. Some 80 percent of the traders in Chungking Mansions are from sub-Saharan Africa. The large majority are men, and most come from the upper crust of their societies — they have to be able to afford the plane fare to Hong Kong. For some young men on their initial trips, their entire family’s savings have been invested in them, to be compounded or lost. Older, more experienced traders may have made the trip back and forth between China and Africa dozens or even hundreds of times.
The schemes are often ingenious. A Congolese trader explained to me how to send three used cars by container around the Cape of Good Hope to Matadi, then drive them overland to Kinshasa — then asked me to invest in this venture, saying, "I can guarantee you 300 percent profit." The gas tanks of the cars could also be loaded with mobile phones, he added, which would never be seen by customs agents. A Kenyan trader buys an item of clothing she likes in Hong Kong and then orders 10,000 copies from a factory in China, which she ships back home under her own label. Another East African trader buys knock-off Jacuzzis, made by a south China company and sent back home to be sold to cabinet ministers and business magnates who want televisions, CD players, and computers in their baths. A Senegalese trader buys gemstones in Congo — where he has been robbed at gunpoint — and carries them to Hong Kong; he pulls out a vial from his pocket to show me his wares, which he can sell in south China, using the proceeds to buy phones to carry back home. A trader from Gabon tells me — when he’s not busy chatting up the Filipina and Indonesian girls that he seems effortlessly to attract in the restaurant where we’re sitting — that of the mobile phones he buys, the real phones go to his friends and customers in the city, and the pirated ones go to the village, where "they don’t know any better." A trader from Mali tells me he would never cheat his customers, though he himself has often been cheated. "I’m a Muslim," he says, "and Allah is watching me."
Many traders go into mainland China to buy goods such as clothing, but it’s easy to lose one’s shirt there, due to language barriers and the lack of legal protections. But with the high risk comes high reward. "The big fish go to China," a Tanzanian trader told me. "We little fish stay in Hong Kong." Most traders deal in U.S. dollars, carrying hard cash (African banks’ letters of credit may not go far) — I’ve seen traders pull as much as $30,000 out of their pockets. There is a cautionary — and maybe apocryphal — tale making the rounds of Chungking Mansions concerning an African trader who was relieved of $50,000 in cash by a Chinese prostitute while he took a shower.
Other risks include currency fluctuations — exchange rates between various African currencies and the U. S. dollar often oscillate wildly — and the gauntlet of customs inspections between China and Hong Kong (where unauthorized knockoffs are occasionally confiscated) and in traders’ own countries (where bribery and uncertainty are often the rule). Experienced traders estimate that fewer than half of first-time African traders coming to Hong Kong and China clear enough of a profit to come back for more.
Chungking Mansions’ informal economy also supports hundreds of temporary workers — a surprising number from a single Muslim neighborhood of Kolkata called Kidderpore — who work as touts, dishwashers, store clerks, or goods carriers. They are working illegally, allowed into Hong Kong visa-free as tourists. But as soon as police — even undercover police, who are easily recognized — enter the complex, mobile phones are quickly dialed and the illegal workers step away from their stations and blend into the crowd. These temporary workers make tiny salaries by Hong Kong standards, but enough to support their families back in Kolkata. I went back to India with a Chungking Mansions restaurant tout who was a hero back home, financing his two sisters’ weddings and wheeling his shiny new motorcycle before half-a-dozen starry-eyed teenagers dreaming of following in his footsteps. These temporary workers are also merchants in their own right, financing their flights to and from Hong Kong by carrying clothing with them from Hong Kong to India and rice and other foodstuffs back from India.
There are also the hundreds of asylum seekers who make up a significant portion of Chungking Mansions’ labor force. African asylum seekers can easily be caught if they are working conspicuously, since few Africans have Hong Kong residence and thus legal working rights. Some work as managers in the guesthouses on Chungking Mansions’ higher floors, where police — at the mercy of the building’s slow elevators — cannot quickly get to them. South Asian asylum seekers, on the other hand, can blend right in at the building’s lower two floors, where most businesses are located.
Chungking Mansions’ status as a nexus of low-end globalization depends on these illegal workers — it is only by virtue of their low wages that developing-world traders and entrepreneurs can afford to stay in the building’s guesthouses, eat at its restaurants, and buy its goods. Higher prices would reduce the building to another third-rate Chinese shopping mall. The building’s managers seem to understand this — as do the police, who generally take a laissez faire approach to relatively minor offenses committed in the building. Since few Hong Kong Chinese would ever work in Chungking Mansions, no one is accusing the workers of stealing jobs from the locals.
Indeed, most Hong Kongers are terrified of Chungking Mansions. In the evenings, you can see expatriates and Hong Kong Chinese leaving various fashionable bars and restaurants on Nathan Road and walking by the Africans and South Asians milling outside Chungking Mansions: the "yellows" and "whites" in their suits and dresses and the "browns" and "blacks" in their various garb, eyeing each other with gazes of utter incomprehension. But in truth, they share more than they may be aware in their view of the world: Many Hong Kong Chinese have obtained the dream of developed-world middle-class affluence, a holy grail the Africans and South Asians in Chungking Mansions are fervently pursuing, one refurbished cell phone at a time.
If the copyright laws and corporate strictures of the developed world were strictly enforced, this grail would be unattainable; traders on a limited budget might never get their China-made goods back home to market, and their consumers would never be able to afford them in any case. Without Chungking Mansions, and the industrial powerhouse of south China lying behind it, many citizens of Africa and much of South Asia might be altogether shut off from globalization.
When the economic histories of the early 21st century are written, it may be that this is China’s greatest contribution: enabling vast swaths of the developing world to experience globalization through its manufacture of cheap, shoddy, often pirated goods. Chungking Mansions’ niche has been bringing globalization not just to the developed world but to all the world, even if it means cutting corners. To be sure, there are very real issues of legality and exploitation. But on balance, who on earth could say that it’s a bad thing?