Developmental Impact of Zimbabwe-Sino Relations

PESA Editorial - Zimbabwe - 2Q2018/19

Zimbabwe and China share a mutually beneficial relationship based on diplomacy and bilateral trade. This is derived from China’s willingness in Sino-African relations to develop cooperation and ensure both China and African people benefit. China is very active in Africa with Zimbabwe being its major trade partner and gateway to development. Relations between Zimbabwe and China have evolved over the years, with the inception of the relationship being established through diplomatic ties on the 18th April 1980[1]. Under President Robert Mugabe, the two nations have had close political relations as China played a significant part by supporting Zimbabwe during its liberation struggle. However, this historical political support did not amount to any economic cooperation and activities[2]. Economic cooperation between Zimbabwe and China grew at a significant pace from 2000 when Zimbabwe adopted its “Looking East” policy which focused on infrastructure development and it endeavored to cooperate with Eastern countries namely China, Singapore, India, Malaysia and Russia.

 

Zimbabwe-China relations gained economic momentum after the Fast Track Land Reform that left the nation isolated and faced difficulties from acquiring financial assistance from institutions like the World Bank, IMF as well as the European Union. The Chinese government’s new loans to Zimbabwe earmarked what was to be a very fruitful economic relationship for the two nations. Having supported economically through financial investments and trade, China also gave political support to Zimbabwe through solidarity in multilateral forums and support for regional activities to ensure stability for Zimbabwe [3].

 

Zimbabwe is China’s largest trading partner in the SADC region, with exports mainly in tobacco and beverages. The country’s total export to China increased averaged 15.4% from 2011 to 2016, increasing to 17.5% in 2017[4]. In the same period, Zimbabwe’s tobacco and beverage exports to China averaged 5.6% of the country’s total exports to China, with a slight increase to 6.0% in 2017[5]. Zimbabwe’s adoption of China’s Yuan currency, certainly seems to have facilitated better trade with China.

 

As a leading trade partner to Zimbabwe, China also funds Zimbabwe through loans[6]. In Zimbabwe’s interim administration under President Mnangagwa, the Zimbabwean government signed a loan agreement of USD 153 million to renovate and expand its airport in Harare, in a bid to attract tourist and investors through rebranding the country and economy.

 

PESA Editorial - Zimbabwe - 2Q2018/19
Source: UNCTAD 2018, UNCTADStat Database.

 

The Mnangagwa administration has vowed to deepen cooperation in various key areas with China. The two counties established a comprehensive strategic partnership of cooperation during Mnangagwa’s visit to Beijing in April 2018, which will ensure better cooperation in agriculture, human resources, and construction projects. Zimbabwe has in this regard secured a USD 1 billion deal from China to set up ferrochrome smelters at Zimasco Limited (Ferrochrome producer) and build a 400 megawatts coal power plant in Matebele land. These projects are expected to create at least 25 000 job opportunities[7]. Yet, this brings about various issues of exploitation such as the Chinese only hiring its citizens for top level jobs and Zimbabweans for labour intensive jobs which results in unequal balance of power [8]. The Chinese businesses have been on found guilty of underpaying workers, physical abuse and policies that do not protect the worker.

 

Zimbabwe also benefits from the USD 60 Billion China investment package signed at the 6th Forum on China-Africa Cooperation (FOCAC) Summit in South Africa in 2016[9]. This investment includes infrastructure development, promote joint ventures, encouraging private sector investment, modernizing labour laws, restore and building confidence among Zimbabweans[10].

 

Upon thorough investigation, China is a significant trade partner for Zimbabwe as it is the top export destination. The two countries have established mutually-beneficial trade relations, although China can improve its contribution to the livelihoods of Zimbabweans with reference to job creation, employing locals in top positions, less corruption, fair working conditions and better policies to protect the citizens. More importantly, China remains a good development partner to Zimbabwe as Chinese businesses provide among their benefits large-scale markets for tobacco and beverages as well as the Chinese firms built in Zimbabwe which will lead to more employment.


[1] ZIMFA 2018a. Foreign Policy, on the Ministry of Foreign Affairs and International Trade Website, viewed on 5 August 2018, from http://www.zimfa.gov.zw/.

[2] ZIMFA 2018a. Foreign Policy, ibid.

[3] ZIMFA 2018b. Foreign Policy: The Looking East Policy, on the Ministry of Foreign Affairs and International Trade Website, viewed on 5 August 2018, from http://www.zimfa.gov.zw/.

[4] UNCTAD 2018. UNCTADStat, United Nations Conference on Trade and Development: Geneva. Available At: http://unctadstat.unctad.org/ [Last Accessed: 8 August 2018]

[5] UNCTAD 2018. UNCTADStat, ibid.

[6] Reuters 2017. ‘Zimbabwe Agrees First Post Mugabe Loan Deal With China’, on the Reuters Website, viewed on  3 July 2018 , from https://af.reuters.com/.

[7] Mhlanga, F. 2018. ‘Govt, Sinosteel sign $1bn MoU’, Newsday, viewed on 8 August 2018, from https://www.newsday.co.zw/.

[8] Hogwe, F. and Banda, H. 2017. ‘The Nature of China’s Role in Development of Africa: The Case of Zimbabwe’, Problems and Perspectives in Management, Vol. 15, Issue 1, pp. 237-247. Available At: https://businessperspectives.org/ [Last Accessed: 5 August 2018].

[9] Chen, W. and Nord, R. 2018.’ China and Africa: Whither the Belt and Road?’, Bridges Africa, Vol. 7, Issue 5, pp. 4-6. Available At: https://www.ictsd.org/sites/default/files/bridgesafrica_july2018.pdf [Last Accessed: 12 September 2018].

[10] TH 2018. ‘Zim to Benefit from China’s Investment in Africa’, The Herald, viewed on 8 July 2018, from https://www.herald.co.zw/.


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