After boom years, some Chinese firms run into trouble in crisis-hit Sudan

Wed Jul 10, 2013 10:11am EDT
 
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By Ulf Laessing

OMDURMAN, Sudan (Reuters) - When Chinese clothing wholesaler Chan Cui Xiao signed a deal with a Sudanese businessman to export colorful bed sheets to the African country he was confident of making good money.

A few months later he is in serious financial trouble - he shipped his goods to Sudan but did got paid and has rushed to the country to try to track down his local business partner.

The Sudanese had sent him credit and bank financing letters, and as Chan had done business that way in Egypt and other Arab countries he thought it was safe to export his goods.

"I made a loss of $200,000 but have been unable to find the Sudanese guy. The phone number and address he gave me seem wrong," said Chan, sitting in a stuffy clothing store run by a fellow Chinese in the town of Omdurman, north of Khartoum.

Chan is not alone in losing money. There are at least 10 Chinese clothing wholesalers in Omdurman's dusty fashion market who say they have not been paid by Sudanese partners. Some of them have come over from China to sell off their merchandise from stalls set up in front of the single-storey white brick buildings that line the unpaved market street.

Others are busy filing legal suits, although a weak Sudanese legal system means they probably stand little chance of getting their money back, analysts say.

Sudan has been scrambling to contain an economic crisis since it lost the bulk of its oil production when South Sudan seceded in 2011. As oil revenues were the main source of budget income and of foreign exchange reserves needed to pay for imports, many Sudanese importers are now struggling to get their hands on dollars to pay foreign suppliers.

Financial losses cited by Chinese traders and businessmen raise concern about the African country's ability to revive its economy.   Continued...

 
Chinese vendors wait for customers inside their shop at a Libyan local market in Omdurman, June 6, 2013. REUTERS/ Mohamed Nureldin Abdallah