Zimbabwe: China Engagements to Boost Investment Portfolio

5 September 2024
editorial

CHINESE businesses are the largest single group of foreign investors in Zimbabwe, having committed US$3,4 billion through 472 investment licences by the end of last year, with trade also growing fast to exceed US$1 billion a year.

A lot of this huge investment and growing trade is a result of the investment drive by Zimbabwe under the Second Republic led by President Mnangagwa.

Chinese investors are now ready to look seriously at what is on offer, and the relatively simple and clear conditions laid down, basically dealing with rational environmental and labour safeguards and ensuring that the investors have the security of clear licences.

The major drive against corruption is obviously a large plus, with the Chinese particularly opposed to this sort of scandalous mess back home and certainly not wanting to be invited to mess around when they are out in the world.

But a major factor is also the inter-government relations, the very good relations between the two governments. This means that there is the required backing that boosts the confidence of those willing to invest, so they know that the deals on offer are genuine and that they have the required access to Government leaders when something special is needed in the investment climate.

This emphasis on fair dealing and open doors with those in the world's second largest economy has meant that Zimbabwean investment opportunities are taken seriously.

This is also made easier because both countries follow the United Nations protocols that recognise that sovereign states are just that, not dependencies legally or de facto. Zimbabwe's foreign policy of friend to all and enemy of none is reciprocated.

The good inter-government relations also mean that trade barriers and non-trade barriers can be reduced and gradually eliminated, and where conditions have to be set for health and safety reasons, for example when it comes to exports of agricultural produce to China, that these will be rational and fair.

So we have had in the past the simple procedure to make sure that citrus exports will meet Chinese safety standards sorted out and, this week, in the latest batch of agreements, the framework to work out the standards for avocado exports.

A large batch of 17 agreements and memoranda of understanding have been signed during President Mnangagwa's visit to China, a double trip, the State visit to cement bilateral ties and boost China-Zimbabwe cooperation, and the attendance at the 9th Forum on China-Africa Co-operation (FOCAC), where Zimbabwe joins almost every other African country in detailed discussions on how cooperation can be boosted with such an economic giant.

President Mnangagwa has made it a policy that any foreign visits have to not only include the inter-government meetings, but also include his direct contact with potential investors, with that personal touch being important.

This has been seen on this Chinese trip with his visits to three provinces that he does know, in one he was trained as a young man for the liberation war, so that he can push his investment agenda forward.

President Xi Jinping and President Mnangagwa witnessed after their meeting in Beijing on Tuesday, the signing of 17 new agreements and memoranda of understanding covering a wide swathe of territory, including agricultural trade, infrastructure development and mining.

Quite a lot of the agreements deal with ensuring that Zimbabwe can fit into the major global initiative of the Chinese, the Belt and Road Initiative, a recognition by China that accelerating trade and development often requires a major effort to ensure that goods can move across the globe at modest cost and that railways, harbours and roads are physically present and connected.

Zimbabwe also has its Vision 2030, which covers much of the same infrastructural ground locally, and so seeing where Zimbabwe's visionary local detail fits in with the larger global effort makes sense.

This will also be part of the FOCAC talks. The agreements also include practical points in infrastructure, such as upgrading railway management.

In agriculture there is again the practical stress, on upgrading irrigation where Zimbabwe has already made it clear that investment is welcome, and on boosting trade in fresh produce, in this case avocados, where a simple list of requirements need to be set out so this can be done without exporting plant diseases as well and Chinese buyers can buy with confidence.

This fits in with the wider agreement on more general trade in animal and plant products, that will be setting out the sort of rules that need to be adopted for each product.

This is needed as non-tariff barriers can be worse than tariff barriers unless experts have clearly agreed on what is needed and have worked out the sort of tests required in the exporting country that are simple, cheap, foolproof and enforced.

These are the sort of practical results from the continuing more general discussion and pressure on opening up unimpeded trade.

There were agreements on media and media infrastructure, China is a major supplier of innovative media infrastructure around the world, and both countries are keen on seeing their news and their story spread to the widest possible audiences.

The sets of agreements were rounded off with some more practical work on mining investment, making sure that there is continual communication as Zimbabwe continues to streamline investment law and rules while ensuring the required safeguards desired by the country and the investors are in place and are easy to administer.

There was also an agreement for mutual legal assistance in criminal matters, a regrettable necessity when there are criminals in both countries who need to have it made very clear that they cannot play one off against the other, and that regardless of who does the arresting, criminals will face trial where they commit crimes.

Zimbabwe has already benefited so much from expanding co-operation with China, from increasing investment from Chinese businesses and the growing trade that the hard work done by President Mnangagwa on this special visit will result in even more growth.

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