“China and Zimbabwe Are Natural Partners”
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