Remittances Mechanism of Chinese Business Owners in Kenya
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DECOUPLED FROM THE “WIN-WIN” RHETORIC: REMITTANCES MECHANISM OF CHINESE BUSINESS OWNERS IN KENYA A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Masters of Arts in Conflict Resolution By Danchen Xu, B.A. Washington, D.C. December 10th, 2020 Copyright 2020 by Danchen Xu All Rights Reserved ii DECOUPLED FROM THE “WIN-WIN” RHETORIC: REMITTANCES MECHANISM OF CHINESE BUSINESS OWNERS IN KENYA Danchen Xu, B.A. Thesis Advisor: Lahra Smith, Ph.D. ABSTRACT The Chinese government has become Africa’s most important economic partner across trade, investment, infrastructure financing, and aid. While China’s increasing economic engagement with Kenya has encouraged more and more bilateral labor movements, the Chinese government’s collaboration with the Kenyan government remains top-down. This study expands existing studies on global remittances and migration to produce a more micro-level analysis of Chinese migrants’ engagement in the local financial market through the lens of remittances. By reviewing vast literature on migration and remittances and conducting interviews with nineteen Chinese migrants and one Kenyan scholar, I argue that Chinese migrants’ remittance behavior is impacted by a multitude of considerations, including their social and political experiences in the host community. While some migrant entrepreneurs recognize the importance of documenting remittances through official channels, structural barriers to using formal remittance channels remain. Moreover, this study’s findings suggest that informal remittance services were used to cope with colliding policies in the migration process. When it comes to remittances spending priorities, different from previous studies that emphasize the importance of family living expenses, most interviewees in this study are more concerned with individual investments, such as real estate. Through researching remittances, I also describe the diverse and complex scope of South-South migration and the upward income mobility it has unlocked for migrants in developing states. Overall, to build transparent, efficient, iii affordable, and secure bilateral remittances corridors, Chinese and Kenyan governments need collaborative efforts in areas including RMB usage, mobile banking services, and migration support. Only in this way can we truly fulfill the “win-win” rhetoric on the grassroots level. iv Mom, you raised a graduate student. 谢谢你，妈。 v TABLE OF CONTENTS Introduction.................................................................................................................................................... 1 Chapter 1: History of Chinese Migrants in Africa ......................................................................................... 4 Chinese Presence in Africa in History ....................................................................................................... 4 Chinese in Kenya ....................................................................................................................................... 7 Chapter 2: Economic Motivations in Theory .............................................................................................. 10 Chapter 3: Migration Motivation in Reality ................................................................................................ 13 Economic and Political Motivations for the Chinese Diaspora in Africa................................................ 13 Chapter 4: Researching Remittances to China ............................................................................................ 19 Remittances Motivation in Theory .......................................................................................................... 20 Calculating Remittances .......................................................................................................................... 20 South-South Remittances ......................................................................................................................... 22 Existing Research on Chinese Remittances ............................................................................................. 24 Chapter 5: Research Methodology and Findings ......................................................................................... 29 Familial Status and Needs to Remit ......................................................................................................... 31 Geographical Backgrounds ...................................................................................................................... 32 Migration Motivation ............................................................................................................................... 33 Professional Backgrounds........................................................................................................................ 35 Chapter 6: Analysis of Chinese Migrants’ Remittance Patterns ................................................................. 38 Remittances Goals ................................................................................................................................... 38 Remittances Channels .............................................................................................................................. 40 Reasons for Choosing Between Remittances Channels .......................................................................... 43 RSPs’ Accessibility ............................................................................................................................. 44 Trust ..................................................................................................................................................... 45 Language Barrier ................................................................................................................................. 46 Visa Status ........................................................................................................................................... 47 Coping with Colliding Foreign Exchange Policies ............................................................................. 49 Petty Corruption................................................................................................................................... 50 Social Exclusion in Host Communities ............................................................................................... 52 Taxation As An Alternative Explanation ............................................................................................ 55 Future Plans ......................................................................................................................................... 58 Limitation of Analysis ............................................................................................................................. 58 Conclusions and Suggestions ...................................................................................................................... 60 Promotion of RMB .................................................................................................................................. 61 Merging Mobile Banking Services .......................................................................................................... 61 vi Migration Support .................................................................................................................................... 62 Suggestions For Future Researchers ........................................................................................................ 62 Appendix A .................................................................................................................................................. 64 Bibliography ................................................................................................................................................ 67 vii LIST OF FIGURES Figure 1: Rural Poverty Rate, By Province, 2017 ........................................................................ 15 Figure 2: Intra-Province Income Inequality, 2020 ........................................................................ 15 Figure 3: Methods and Channels of Overseas Remittances.......................................................... 26 Figure 4: Interviewees Professional Background Distributions ................................................... 35 Figure 5: Interviewees’ Occupation by First Job in Kenya .......................................................... 37 Figure 6: Interviewees’ Occupation During Interview ................................................................. 37 viii LIST OF TABLES Table 1: Interviewees Background ............................................................................................... 30 Table 2: Interviewees’ Marital Status ........................................................................................... 32 Table 3: Interviewees with at Least One Immediate Family Member in Host Country ............... 32 Table 4: Interviewees’ Response to Whether They Remit Regularly to China ............................ 32 Table 5: Geographical Origin of Interviewees by Region ............................................................ 33 Table 6: Interviewees’ Primary Reason for Migration ................................................................. 33 Table 7: Number of Job Changes