Madrid’s Chinese community insulates itself from economic turmoil

Story by Dylan McGuinness and Adam Tismaneanu

MADRID–It’s 4:30 p.m. on a Saturday and Elena Wang is sitting alone in the front room of her empty Sichuan restaurant, just before closing between the lunch and dinner rushes. She’s waiting on her 10-year-old son to come back from his school lesson. He walks in, greets his mother and heads to the kitchen to speak with his father who works as the chef.

Elena Wang's restaurant and Xin Chan's convenience store are located just off Plaza de Españ–a. Malasa–ña, in central Madrid, is one of the dominant neighborhoods of Chinese immigrants in Spain. Photo by Joe Thomas

Elena Wang’s restaurant and Xin Chan’s convenience store are located just off Plaza de Españ–a. Malasa–ña, in central Madrid, is one of the dominant neighborhoods of Chinese immigrants in Spain.
Photo by Joe Thomas

Theirs is a quintessential family business. There are no employees outside of Wang and her kin. Before she opened this Chinese food restaurant four months ago, just off of Plaza de España, they had another one, and one before that too, all in the same area since they came to Madrid 15 years ago. At 40 years old, she’s never had time to pursue interests, including a college degree.

“We came here to just work,” Wang says through a translator. “My son was born here, he studies here and speaks Spanish like any other Spanish kid. Not like us. We never studied Spanish. I learned little by little, that’s why I can’t speak Spanish as well as my son.”

The Wang family is just one example of an increasing trend in the neighborhoods of Madrid. Over the past decade, the number of Chinese immigrants coming to Spain in the hopes of starting their own business has continued to increase while most other sectors declined in the aftermath of Spain’s economic crisis, which started in 2008. While many foreigners and Spaniards have struggled to survive in a harsh financial climate, Chinese businesses have thrived by isolating themselves from the struggling economy.

There are many reasons for their success. Namely, the immigrants who are coming from China to start restaurants and food stores – or “alimentacións” in Spanish – succeed because they have formed an elaborate network of communal help. The immigrants often come to Spain because they have family here, which allows them to understand the economic landscape and build capital.

“Owning stores is something very particular with this community,” says Francisco Javier Moreno Fuentes. “So families will work together until they can get money to open their own shop. In a way they do training and learn about the market by working at a store until they can access money to open their own shop. They want to own their own business.”

The effects are impressive.

While Chinese immigrants are a small percentage of residents in Spain, representing slightly under 3 percent of the foreign population, data from the National Federation of Self-Employed Workers show that in 2014, they accounted for almost one-third of businesses owned by foreigners.

Experts such as Fuentes say this is how the small Chinese businesses have insulated themselves during the economic crisis. Since immigrants are working for and serving other Chinese residents and opening stores within the same markets that have proved successful, their businesses aren’t as susceptible to the effects of a broader recession.

“In a sense, because of the kind of model that they have, they’ve been able to own a lot of shops with that sort of structure,” says Adam Austerfield, who oversees Spain, Portugal and Latin America as the director of London School of Economics Enterprise Ltd., a business arm of the London School of Economics that furthers global research in both public and private sectors.

“There’s a lot of workers here working extremely long hours, but they get their supplies at an incredibly cheap rate, of course, so they’re able to charge incredibly competitive prices,” he says.

Francisco Javier Colon Fuentes is an immigration expert and researcher at Spain's Institute of Policy and Public Goods. Fuentes spoke about the Chinese immigrants ability to recognise niches in Spanish markets and dominate them. Photo by Joe Thomas

Francisco Javier Moreno Fuentes is an immigration expert and researcher at Spain’s Institute of Policy and Public Goods. Fuentes spoke about the Chinese immigrants’ ability to recognize niches in Spanish markets and dominate them.
Photo by Joe Thomas

Austerfield, who lives in Madrid, also notes that the competitive prices they offer, in addition to the added imported labor, lend a helping hand to struggling Spaniards.

“The other thing one has to remember is that going back to pre-crisis days in Spain is that Spain was a huge importer of foreign labor,” he says. “That imported labor attracted the Chinese so it brought a lot of labor to a country that was looking to attract that. They capitalized on that and a big thing is the supply chain because the Chinese network can get all the goods from their own country.”

The imported labor is imperative because Spain has an incredibly low birth rate: In fact, it’s among the lowest in the world at about 1.3 babies per woman, according to data from the World Bank. That rate is incapable of sustaining the population. Therefore, concerns arise about whether the labor force can support the social systems of the elder generations. Imported labor is used to compensate for that deficiency.

“They have recognized a niche for which there is a demand,” says Fuentes. “They try to keep costs low, like turning the lights off during the daytime, and stay open for long hours.”

Their resulting dominance in certain sectors plays a significant part in their success, but another contributor is the fact that they’re willing to work extremely long days – an ethic many Europeans won’t and cannot match.

“While they succeed, it’s at a high cost,” insists Fuentes. “For [Spaniards], what looks like a nightmare life – working 18 hours per day – to them is OK.”

Fuentes goes on to say that the only place to get a “Coca-Cola or loaf of bread” after 11 p.m. is the neighborhood “Chino store” – the phrase many Spaniards use to refer to Chinese-owned establishments – since most grocery or Spanish-owned convenience stores close much earlier.

Xin Chan, 60, owns one such store down the street from Wang’s restaurant. While Madrid lacks the designated Chinatown neighborhood common in many cities, Plaza de España is known as a heavily concentrated area for Chinese immigrants.

Xin Chan, 60, from northern China, is the owner of an Alimentaci—ón, or

Xin Chan, 60, from northern China, is the owner of an alimentaci—ón, a convenience store located near Plaza de Españ–a in central Madrid. Chan, who has been living in Madrid for 18 years, also owns three other stores.
Photo by Joe Thomas

“While in Spain I’ved owned bars, todo 100s (an equivalent to the American dollar store), convenience stores and worked at the market,” says Chan through a translator. “I don’t like just doing one thing, I’m always thinking about what the next thing is going to be and that’s how I’ve learned to do different things. Now I know how to run cafeterias, todo 100s, alimentacións and restaurants.”

Both Chan and Wang are evidence of the hard work necessary for first-generation immigrants to succeed. While young children in these families frequently play roles in the businesses themselves, they’re also often completely integrated into Spanish society.

“That’s what’s happening right now. They’re trying to get their kids out of these restaurants or alimentacións,” says Guillermo Martínez Taberner, the director of the economics and business department of Casa Asia, an extension of the Spanish Ministry of Foreign Affairs that aims to bridge the Spanish and Asian communities. “They want to take them to university to get a higher level of education and then they can play a role in a different sector like creating a company of their own for instance.”

That’s why Wang’s son is in school on a Saturday. That’s why he speaks Spanish as well as his schoolmates.

As Wang sits there in her restaurant, about to enjoy her first break of the day, she concedes that her life here can be difficult.

“Easy?” she laughs. She had already worked a four-hour shift and was looking at another shift until midnight following her break, not including prep and cleanup. “No. Because we’ve had experience with running a restaurant, it’s manageable, but for people who are starting something new that they have no experience with, it’s never easy.”
Additional reporting from Monica Vallejo.

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2 thoughts on “Madrid’s Chinese community insulates itself from economic turmoil

  1. Pingback: Gonna miss that place… | dylan mcguinness

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