“China and Zim­babwe Are Nat­u­ral Part­ners”

China's Foreign Trade (English) - - Regional Trade & Investment - By Nikki Liu

In 2017, China had in­vested a to­tal of more than USD 1.8 bil­lion in Zim­babwe, and the bi­lat­eral trade vol­ume be­tween China and Zim­babwe reached USD 1.3 bil­lion. At present, China is the largest source of for­eign in­vest­ment in Zim­babwe and their fourth largest trad­ing part­ner. Mean­while, Zim­babwe is an im­por­tant in­vest­ment des­ti­na­tion and long-term strate­gic part­ner for China in Africa.

On April 3rd, dur­ing the re­cent visit of the Zim­bab­wean Pres­i­dent, Emer­son Mnan­gagwa, to China, the China-zim­babwe Busi­ness Fo­rum was held jointly by the China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade (CCPIT) and the Zim­bab­wean Em­bassy in China, in or­der to im­prove eco­nomic and trade re­la­tions and co­op­er­a­tion be­tween China and Zim­babwe.

China and Zim­babwe are Nat­u­ral Part­nersy

Jiang Zeng­wei, Chair­man of CCPIT and China Cham­ber of In­ter­na­tional Com­merce, stated at the fo­rum, that the pro­posal by Chi­nese Pres­i­dent Xi Jin­ping to build a com­mu­nity with a shared fu­ture for hu­man­ity and the Belt and Road Ini­tia­tive are in ac­cor­dance with the com­mon in­ter­ests of China and Zim­babwe. This will gain sup­port and a pos­i­tive re­sponse from the Zim­bab­wean govern­ment, re­sult­ing in great prospects for co­op­er­a­tion. In the next 15 years, China is ex­pected to im­port USD 24 tril­lion of goods, and ab­sorb USD 2 tril­lion of di­rect over­seas in­vest­ments, while make di­rect over­seas in­vest­ments worth USD 2 tril­lion. This will surely pro­vide greater op­por­tu­ni­ties for de­vel­op­ment for coun­tries around the world, in­clud­ing Zim­babwe.

Jiang Zeng­wei is conf ident about the co­op­er­a­tion be­tween and projects im­ple­mented by Chi­nese and Zim­bab­wean en­ter­prises, since “China and Zim­babwe have their own ad­van­tages in terms of in­dus­trial struc­ture, re­sources, etc., which means a strong eco­nomic com­ple­men­tar­ity. They are nat­u­ral part­ners”.

Jiang Zeng­wei said that the two coun­tries should fur­ther ex­pand their bi­lat­eral trade. China is a big man­u­fac­tur­ing coun­try and a great con­sumer of agri­cul­tural prod­ucts and min­er­als, while Zim­babwe has a good in­dus­trial foun­da­tion, rich min­eral re­sources, and high qual­ity agri­cul­tural and an­i­mal hus­bandry prod­ucts. The two coun­tries should fur­ther seek out and tap into the po­ten­tial in trade, pro­mote the im­port and ex­port of more high- qual­ity spe­cialty prod­ucts, and ex­pand the scope of their co­op­er­a­tion.

“Be­sides this, both sides should fo­cus on deep­en­ing their co­op­er­a­tion in in­vest­ment,” said Jiang Zeng­wei. Zim­babwe is now striv­ing to ac­cel­er­ate the process of in­dus­tri­al­iza­tion and, as such, cur­rently has a strong de­mand for pro­duc­tion fac­tors such as cap­i­tal, tech­nol­ogy, and man­age­ment. As the sup­ply-side struc­ture re­forms deepen, China is con­stantly im­prov­ing its in­dus­trial sys­tems. The two coun­tries can carry out more co­op­er­a­tive cap­i­tal and tech­nol­ogy projects, and can strengthen co­op­er­a­tion in terms of their in­fra­struc­ture, agri­cul­ture, min­ing, man­u­fac­tur­ing, com­mu­ni­ca­tions, ser­vices, busi­ness, and even cul­ture.

In ad­di­tion, ex­changes be­tween the busi­ness com­mu­ni­ties should be en­cour­aged. As Jiang Zeng­wei

em­pha­sized, the CCPIT is will­ing to con­tin­u­ous to deepen the co­op­er­a­tion with their coun­ter­parts in Zim­babwe, in or­der to con­struct more ex­change plat­forms fo­cus­ing on trade and in­vest­ment and com­mer­cial laws, while also pro­vid­ing two-way in­for­ma­tion or busi­ness com­mu­ni­ca­tion, in­volv­ing com­mu­ni­cat­ing in­for­ma­tion about rel­e­vant poli­cies and reg­u­la­tions of the two coun­tries, and pro­vid­ing train­ing and com­mu­ni­ca­tion re­gard­ing re­lated in­ter­na­tional rules and prac­tices. In sum­mary, the CCPIT is keen to con­tinue con­tribut­ing to the fruit­ful co­op­er­a­tion be­tween and the healthy and sta­ble de­vel­op­ment of the two coun­tries.

Dur­ing the fo­rum, Jiang Zeng­wei, on be­half of the CCPIT, signed a me­moran­dum of un­der­stand­ing re­gard­ing co­op­er­a­tion with the Zim­babwe Trade Au­thor­ity. More than 400 rep­re­sen­ta­tives from en­ter­prises in China and Zim­babwe at­tended the fo­rum and en­tered into ne­go­ti­a­tions, re­sult­ing in the in­ten­tion to co­op­er­ate in in­fra­struc­ture con­struc­tion, man­u­fac­tur­ing, agri­cul­ture, en­ergy, min­ing, in­for­ma­tion tech­nol­ogy, etc.

Ex­cel­lent in­vest­ment en­vi­ron­ment and pref­er­en­tial poli­cies

Why do busi­ness and in­vest in Zim­babwe? Ac­cord­ing to Alan, Chief Ex­ec­u­tive Of­fi­cer of the Zim­babwe Trade Au­thor­ity, al­though it is a land­locked coun­try, Zim­babwe bor­ders Mozam­bique on the east, South Africa on the south, and Botswana and Zam­bia on the west and north­west, mean­ing that al­most all coun­tries in south­ern Africa are Zim­babwe’s neigh­bors.

Re­gard­ing the for­eign ex­change sys­tem, Allen re­vealed that the govern­ment in Zim­babwe has car­ried out a se­ries of re­forms and has lifted re­stric­tions to help in­vestors bet­ter man­age cur­rency risks, and to en­cour­age and at­tract more in­vest­ment. For ex­am­ple, div­i­dends are al­lowed to be 100% re­mit­ted, and with­drawn in­vest­ments are 100% re-col­lectable, etc.

“As a mem­ber of the WTO, Zim­babwe has signed the (South­ern African De­vel­op­ment Com­mu­nity) SADC free trade agree­ment and is a mem­ber of COMESA (the Com­mon Mar­ket for Eastern and South­ern Africa), which means that the prod­ucts of in­vest­ment projects in Zim­babwe can be sold not only in Zim­babwe, but also in the sur­round­ing ar­eas tax-free, even in­clud­ing the EU,” Allen ex­plained. What’s more, Zim­babwe has signed bi­lat­eral and mul­ti­lat­eral in­vest­ment agree­ments with a num­ber of coun­tries, such as Namibia, Mozam­bique, and South Africa, al­low­ing in­vestors in Zim­babwe to do busi­ness in the above coun­tries.

Zim­babwe is putting for­ward a num­ber of in­cen­tives for trade and in­vest­ment, such as zero tax for in­vest­ment in tourism de­vel­op­ment projects for the first five years, and spe­cial al­lowances for im­ports of equip­ment in spe­cial eco­nomic zones.

“For projects with in­vest­ment ex­ceed­ing USD 50 mil­lion, the projects will be ap­proved for work per­mits au­to­mat­i­cally without re­quir­ing an ap­pli­ca­tion, and in­vestors can also re­ceive a res­i­dence per­mit,” said Allen.

In ad­di­tion, Zim­babwe has es­tab­lished a “one-stop” ser­vice cen­ter in the Free Trade Zone, in or­der to fa­cil­i­tate the re­lated pro­ce­dures for in­vestors to es­tab­lish 100% own­er­ship of an en­ter­prise.

Min­er­als, in­fra­struc­ture, agri­cul­ture, in­dus­try and so on need to be de­vel­oped

At present, Zim­babwe is striv­ing to ac­cel­er­ate its eco­nomic de­vel­op­ment by im­ple­ment­ing poli­cies to at­tract for­eign in­vest­ment and im­prove the busi­ness en­vi­ron­ment. Emer­son Mnan­gagwa, Pres­i­dent of the Repub­lic of Zim­babwe, stated, at the fo­rum, that Zim­bab­wean govern­ment is will­ing to fur­ther strengthen the bi­lat­eral re­la­tions and prac­ti­cal co­op­er­a­tion with China.

“There is a short­age in the sup­ply of cap­i­tal prod­ucts in Zim­babwe, but we have abun­dant re­sources and an ex­cel­lent cli­mate. The govern­ment has de­vel­oped a range of po­lices to re­duce the costs and risks of busi­ness op­er­a­tions,” Emer­son ex­plained. For ex­am­ple, by means of tax in­cen­tives and dereg­u­la­tion of min­ing rights, Zim­babwe is work­ing on es­tab­lish­ing a trans­par­ent and sta­ble com­mer­cial pol­icy en­vi­ron­ment, which is the top pri­or­ity of the Zim­bab­wean govern­ment’s fu­ture de­vel­op­ment plan.

The min­eral re­sources in Zim­babwe have not yet been fully ex­plored, which may de­ter some po­ten­tial in­vestors from do­ing busi­ness here. As to this, Emer­son dis­closed that the new govern­ment has for­mu­lated poli­cies for lo­cal­ized man­age­ment, namely a tax rate of only 15% for min­ing projects, and that there will be in­de­pen­dent ne­go­ti­a­tions for for­eign com­pa­nies en­ter­ing all other in­dus­tries with their po­ten­tial part­ners.

At the same time, Zim­babwe at­taches great im­por­tance to in­fra­struc­ture con­struc­tion, since in­fra­struc­ture is an im­por­tant fac­tor in boost­ing eco­nomic de­vel­op­ment and pro­mot­ing re­gional eco­nomic in­te­gra­tion, and is also try­ing hard to build and ren­o­vate in­fra­struc­ture in dif­fer­ent ar­eas, such as roads, rail­ways, air routes, en­ergy and wa­ter sup­plies, and ICT.

In ad­di­tion, Zim­babwe hopes to es­tab­lish a spe­cial eco­nomic zone and an in­dus­trial park, and has is­sued spe­cial in­cen­tive poli­cies to this end. “China is quite ex­pe­ri­enced in this area, and we will en­cour­age and warmly wel­come Chi­nese in­vestors and en­trepreneurs to in­vest in our spe­cial eco­nomic zones,” added Emer­son.

As Emer­son pointed out, due to long-term iso­la­tion, clo­sure, and eco­nomic stag­na­tion, in­dus­try in Zim­babwe lacks cap­i­tal and ad­vanced tech­nolo­gies, mean­ing that there is an ur­gent need for mod­ern­iza­tion and equip­ment up­grades. There­fore, there are also many op­por­tu­ni­ties in sec­tors such as tex­tiles, food pro­cess­ing, met­al­lurgy, elec­tric power, leather shoe- mak­ing, phar­ma­ceu­ti­cals, petro­chem­i­cals, plas­tics, etc.

Zim­babwe is con­duct­ing a num­ber of in­cen­tives for trade and in­vest­ment

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