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The hard sell

Yang Xiyun

Zheng Changsheng surveys the neat shelves of his Buenos Aires supermarket with satisfaction, recalling how he left the poverty of his hometown of Fuqing in Fujian province for the uneasy life of an immigrant retailer in Argentina.

'In China, we were really poor, it was very difficult,' the 38-year-old says. 'I felt like I couldn't face my children if I didn't try to make it somewhere else.'

So, in 1998, the former singer borrowed US$3,000 for a visa, took off from Beijing and landed a cashier's job in his sister's supermarket in Buenos Aires.

Zheng is now a member of Argentina's 70,000-strong Chinese community, an immigrant group that cornered its supermarket sector during the country's boom years, suffered a backlash in the economy's collapse, and is now trying to win goodwill by helping to improve neighbourhood relations and fight rampant inflation.

Zheng's enterprise epitomises the fortunes of his community, about 80 per cent of whom work in or own a supermarket, according to Casrech, an association of Chinese supermarket owners set up in 2004 to improve their image and represent their interests.

When the penniless Zheng landed in Buenos Aires, the local economy was on a roll.

'Back in the 90s, we thought Argentinians were so rich,' says Zheng. 'When the [Argentinian] peso was one to one with the [US] dollar, they would tip me one or two pesos. That's 16 yuan! That was like my pay for an entire day in China.'

Argentina was also undergoing a retail revolution. As international chains such as Carrefour and Wal-Mart squeezed out local family-run supermarkets with tighter margins and longer hours, Chinese immigrants saw their chance and moved in, tapping the capital and labour of their extended families.

When Zheng opened his first store seven years ago, for example, he pooled his savings with those of two brothers and a brother-in-law and borrowed 500,000 yuan from relatives in Fujian.

Supermarkets are just the business for Chinese immigrants, says Casrech vice-president Zheng Jicong. 'You don't need to speak the language; there's a low ceiling and you can move locations easily,' he says. 'There's a lot of calculation and budgeting involved. We're good at that.'

The Chinese supermarket owners have proven industrious and astute, says Luis Puppini, from the Argentine Chamber of Distributors and Supermarket Wholesalers.

'They buy together, in cash,' he says. 'They get better prices. They work weekends. This is why they can compete with the big chains. They're hidden chains themselves.'

The immigrants' success in Argentina is built on sacrifice. Zheng Changsheng recalls how he and his brothers used to sleep in a tiny loft behind the store and went hungry to ease the cash flow.

'We ate a lot of congee with sugar,' Zheng says. 'We sold meat, but we didn't dare eat it. On Fridays we'd get fish from the trash of the fishmonger, who threw it away because he couldn't sell it over the weekend. Sometimes the tears would come. We couldn't speak Spanish, and sometimes they would say to us, 'You're Chinese, you get the hell back to your own country'.'

The Zheng brothers survived and profited in the boom. But the good times ended in November 2001, when the peso shrank to a third of its value, triggering a government freeze on bank accounts. Many stores were looted and Zheng's supermarket in the Constitution district was ransacked by a 200-strong mob, he says.

'They took about US$30,000, half the store,' Zheng says. 'But what can I do? We got no money back, not even one cent.'

Some owners cut their losses and left Argentina's economic freefall, but Zheng braved the slump and bought property cheap. He now owns more than 10 supermarkets and says a property he bought for US$35,000 outside Buenos Aires is now worth US$200,000.

Other Chinese store owners seem just as resilient. With, 2,500 stores in Buenos Aires and 4,000 nationwide, Chinese supermarkets now meet 60 per cent of Argentina's demand for basic products, says research firm AC Nielsen. The immigrants' shops are now so common Argentinians call grocery shopping 'going to the chino'.

Their success has garnered criticism from competitors who claim unfair business practices. The Chinese supermarkets cut spending on social insurance and wages because they only employ family members, says Jorge Jacobs, a Carrefour representative.

'They're not searching for quality, for excellence,' he says. 'They're very closed. Problems are common, like changing the expiration dates on dairy products. It's not ethical. I say this because they're bad supermarkets, not because they're Chinese.'

Carrefour has also gone on the offensive. Last year, the chain ran a TV ad flashing images of Asian cashiers and Chinese stores while playing a song that accused other supermarkets of lying to customers. It was pulled when a judge ruled the ad to be discriminatory.

That incident fanned tensions that arose two years ago when an Argentinian truck driver was shot in a scuffle with a Chinese supermarket owner. The incident led the drivers' union to boycott Chinese supermarkets, demanding compensation for the victim and punishment for the shooter. It ended after a week when President Nestor Kirchner ordered the two parties to resolve their dispute.

'It's a difficult relationship. [The Chinese] don't speak Spanish in general. Communication is bad,' says Roberto Boscolo, a drivers' union representative.

The language barrier has fuelled rumours that the Chinese-owned supermarkets are run by organised crime. Jose Cervini, a lawyer in Buenos Aires, insists there is no discrimination. 'But they're run by the mafia. I ask them about it, but they say nothing,' he says.

Other shoppers worry that Chinese supermarkets may unplug their refrigerators overnight to save on electricity. 'The owners are really nice and they have good prices, but I wouldn't buy deli meats or dairy from them,' says Miguel Antonio Cejas, a hairdresser in Constitution. 'There's tension. They'll insult you in Chinese and you don't know what they're saying. That's very ugly.'

Fearing further clashes, Casrech has attempted to overcome the language barrier and improve the integration of staff with their neighbours by setting up a bilingual magazine, while a bilingual website highlights legal, labour and banking assistance. In August, the group set up a bilingual call centre to advise retailers and customers on labour issues, products and service.

Casrech also agreed to the government's request to hold prices as inflation rose 20 per cent annually. But the Chinese supermarket owners scored a public relations coup in October when the price of tomatoes almost quadrupled to 15 pesos a kilogram, as expensive as cuts of beef tenderloin in Argentina.

Chinese supermarket operators in Buenos Aires quickly organised a well-publicised boycott of tomato wholesalers. Restaurants and consumers joined in and tomato prices plummeted by 40 per cent within days. Even critics such as Cejas were impressed: 'That was really good, I have to say.'

Zheng says he's well-received in his neighbourhood, although his Spanish is limited and he relies on a Taiwanese accountant or Casrech contacts on business.

But, in building trust, he finds actions speak louder than words. Zheng says his stores now deliver groceries for free to elderly people who live alone, and have donated food to a soup kitchen.

As a sign of Argentinians' growing confidence, he cites how he borrowed US$20,000 from a neighbour simply on a verbal pledge that he would pay it back. 'And I did,' he says.

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