Zim ripe for investment: China

ZIMBABWE and China’s enduring relations were upgraded to the “Comprehensive Strategic Cooperation” status in 2018, underpinning the solid historical ties the two countries share. In a wideranging interview with the Zimbabwe Independent chief reporter Tinashe Kairiza (TK), Chinese ambassador Zhou Ding (ZD, pictured) spoke about the vast investment opportunities in Zimbabwe. However, the diplomat also highlighted a myriad of bottlenecks in Zimbabwe’s unstable macro-economic environment characterised by currency volatility frustrating efforts to mobilise foreign direct investment (FDI). Below are excerpts of the interview:

TK: China is currently rolling out multibillion-dollar infrastructure projects in Zimbabwe. What is your assessment of Zimbabwe as an investment destination?

ZD: China and Zimbabwe enjoy a longstanding friendship dating back to the period of Zimbabwe’s liberation struggle in the 1960s and 1970s. The two countries established diplomatic relations on April 18 1980, the day of Zimbabwe's independence. Under the strategic guidance of President Xi Jinping and President Emmerson Mnangagwa, our Comprehensive Strategic Partnership of Cooperation has kept on being strengthened, yielding fruitful results. In recent years, China has consistently remained as Zimbabwe's largest source of foreign investment and major trading partner. The key projects built with Chinese government concessional loans, including Hwange power station expansion project Unit 7&8, Kariba South power station expansion project, expansion of Robert Gabriel Mugabe International Airport, Victoria Falls Airport upgrading project among others. They have played important roles in dealing with power shortages, improving transportation and energy infrastructures in Zimbabwe. Zimbabwe is a charming land with excellent climatic conditions and abundant natural resources. President Mnangagwa has implemented the mantra of “Zimbabwe is open to business”, and striving to optimise Zimbabwe’s business environment. As a result, a large amount of international capital, including that from China, has poured into Zimbabwe, making it one of the most dynamic economies in Africa. I believe Zimbabwe still holds tremendous potential in terms of attracting foreign investments and has broad prospects in developing its economy.

TK: What challenges are Chinese investors facing?

ZD: Investments by Chinese companies in Zimbabwe are very diversified, active in various sectors, such as energy and power, mining, manufacturing, agriculture, construction and services. Chinese investments have made tremendous contribution to Zimbabwe’s economic and social progress. However, there are also challenges and obstacles facing Chinese investors. Issues like currency devaluation, high inflation, as well as sometimes inconsistent tax policies impose financial burdens to investors. The stagnant global market, declining international prices of minerals including lithium and platinum pose challenges to investors and the mining sector of Zimbabwe.

In addition, power shortages and inadequate infrastructures are also leading to reduced productivity and increased operation cost.

TK: Will Chinese investors continue to set up

ZD: I believe the challenges are surmountable. I believe that the economic and trade relations between our two countries enjoy bright prospects. Chinese investments will definitely continue to make greater contribution to Zimbabwe’s industrialisation, modernisation and the realisation of Vision 2030.

TK: Zimbabwe is currently under Western sanctions. How can Zimbabwe leverage on its vast mineral wealth to fix its economy?

ZD: The illegal sanctions imposed on Zimbabwe have been in place for more than 20 years, seriously damaging Zimbabwe’s economy. China firmly opposes any unilateral sanctions and supports Zimbabwe in safeguarding its sovereignty and its right to development. Mining accounts for about 13% of Zimbabwe’s GDP and serves as an engine for growth. The lithium mining industry is growing rapidly, offering Zimbabwe an opportunity to take up a position in the global new energy industry chain. However, Rome was not built in a day. As I have mentioned, we are also facing some difficulties both at home and abroad. While the global market is declining, the new energy sector keeps transforming and relevant technology remains evolving. I believe the Zimbabwe government will continue to make effort to create a favourable business environment to make the mining sector bigger and stronger. And I hope Chinese companies will continue their investments in Zimbabwe’s mining sector, based on Zimbabwe’s needs and market principle.

TK: There have been reports that Chinese investors are flouting the country’s regulations. What steps has the Chinese government taken to ensure that its nationals adhere to Zimbabwe’s laws?

ZD: I would like to reiterate that the Chinese government consistently requires Chinese enterprises overseas to abide by the laws and policies of the host countries including Zimbabwe. According to Zimbabwe’s government’s assessment and our embassy’s observation, the majority of Chinese companies operating in Zimbabwe are law-abiding and conscientious corporate citizens welcomed by government and local people.

Indeed, there are very few Chinese investors having some problems in their operations. But they do not represent the whole picture of Chinese investment, and should not be used to negate Chinese companies’ contribution to the development of Zimbabwe.

The relevant disputes should be addressed through legal approach, rather than being exaggerated and used as a tool to stigmatise the entire Chinese business community, even China.

In recent years, we have noticed that some people have kept smearing ChinaZimbabwe cooperation and even fabricating lies to attack Chinese enterprises. After the investigation and verification conducted by relevant government agencies, media and our embassy, most of the negative reports about Chinese enterprises were unsubstantiated and exaggerated.

I have to say the unwarranted smearing, sometimes with hidden political purposes against China and Chinese companies will ultimately hurt the interests of Zimbabwe.

TK: How do you deal with bad apples? ZD: The Chinese government and our embassy never tolerate or shield any illbehaved entities or individuals. In the meantime we are obliged to protect all the investors’ legitimate rights and interests. I am happy to see that the Zimbabwean government is endeavouring to create a fair, orderly, and competitive market environment while strengthening its law enforcement to ensure better compliance.

China has provided support and assistance to Zimbabwe to the best of its capacity. China has been one of the largest grants and assistance providers for Zimbabwe and has supported Zimbabwe from infrastructure building to food and equipment assistance, and from agricultural to the medical sector.

In the past five years, China has assisted Zimbabwe in building some of the monumental projects with grants, such as the new parliament building, the National Pharmaceutical Warehouse, and the High-performance Computing Centre for Zimbabwe.

To address Zimbabwe’s food shortage caused by drought and Cyclone Idai, China has drilled over 1 000 boreholes across the country, bringing access to clean drinking water for more than one million people. This year China will install another 300 boreholes.

China has also supplied over 10 deliveries of food assistance to Zimbabwe, of which the latest including 2000 tonnes of rice and wheat, was handed over in June 2023.

A new batch of 2 000 tonnes of rice will be delivered soon to counter the food shortage caused by the severe drought. Chinese agricultural experts have been working diligently in Zimbabwe to expedite poverty reduction, by setting up demonstration villages, providing technical services and training for local farmers.

TK: Which other areas has China focussed on?

ZD: In the medical sector, China has provided 12 million doses of Covid-19 vaccines and sent an emergency medical team to Zimbabwe to help fight against the pandemic. Chinese medical teams have been working here for almost 40 years and carrying out free medical services for Zimbabwean people.

China’s assistance focuses on promoting Zimbabwe’s economic progress and people’s livelihood, responding to Zimbabwe’s needs. China prioritises mutual coordination, implementation management, supervision and evaluation to ensure the assistance and grants are being utilised correctly and efficiently.

To maintain the credibility of China-aid projects and increase their overall efficiency, the Chinese government pays close attention to the construction and operation of the projects. China also provides technical training to ensure proper project management and maintenance by local people.