Ghana’s Crackdown on Chinese Gold Miners Hits One Rural Area Hard – by Dan Levin (New York Times – June 29, 2013)

MINGLIANG, China — To the people of Shanglin County, gold is a curse. For nearly a decade, thousands of peasants from this rural speck in southern China’s Guangxi Autonomous Region borrowed heavily before boarding flights for Ghana, Africa’s second-largest gold producer, with glinting ambitions and no backup plan.

The Chinese found their gold, though trouble soon found them, in the form of crooked police officers and armed bandits who prowled the mining camps. Then, this month, the Ghanaian authorities declared the mines illegal and arrested more than 200 Chinese miners, accusing them of polluting the land and abusing local workers. Countless others fled as local residents armed with guns and machetes attacked the camps, robbing miners of their possessions and killing some who fought back.

After the crackdown, images of violent deaths and vandalized mining camps blazed across Chinese social media, fueling national anger and soul searching. But here in Shanglin, a mountainous county of 470,000 in one of China’s poorest regions, it is despair over financial ruin that is most pronounced.

“My son might be killed in Ghana, but if he comes back he’s dead anyway,” said Shen Aiquan, 65, whose family borrowed 3 million renminbi, or $489,000, to build a mining operation, though from whom exactly she did not know. All she could do was wait for her son, and the debt collectors who would surely follow.

The crisis in Ghana has revealed the perils of a high-stakes economic gamble, in which countless people have taken part in overseas investment projects endorsed by the Chinese government but have been left to fend for themselves when things go wrong.

Some of the problems facing residents here stem from the informal lending practices common among the rural poor. Lacking the hard assets banks usually require, many people leverage “guanxi” — the social collateral binding business and personal relationships in China — to secure loans from relatives and friends.

Based on trust and often little else, guanxi financing has devastated the villages and townships of Shanglin, whose residents are now bound not just by blood and sweat but by bankruptcy as well.

And the trust is sometimes misplaced. Early this month, a Chinese man in Ghana disappeared with millions of dollars that miners had given him to wire home. Ms. Shen’s son was one of the victims. Another was one of her neighbors, Yang Baofa, 52, who returned from Ghana two weeks ago with barely enough money to travel to his village. “We trusted him because he was Chinese,” he said of the missing man.

On the day Mr. Yang arrived, several of the men who had accompanied him back to China were stuck in the southern city of Guangzhou working construction jobs to earn the $40 needed to buy a long-distance bus ticket home.

The miners who have been trickling back to Shanglin since the violence began insist that they broke no Ghanaian laws. Taking a break from playing basketball across from his concrete house, Wu Jian, 34, a former mine owner, said he had made sure to get all the necessary paperwork in Ghana, including land deeds and a mining license. “The local people said as long as we had money we could do anything we want,” he said.

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