'Zim not China's favourite'

HARARE - Zimbabwe continues to lag behind as China’s trading partner despite the country’s adoption of the “Look East” policy, a recent China-Africa Trade and Economic Relationship Annual Report 2012 has revealed.

China’s top African trading partners in 2011 were Algeria, Angola, Nigeria, Egypt, the Republic of Congo, Liberia, the Democratic Republic of Congo, Morocco, South Africa and Sudan.

Chinese trade with the 10 countries accounted for 77 percent, two percent of the $166 billion total China-Africa trade.

This comes amid misconceptions that China is now Zimbabwe’s major trading partner.

Zimbabwe adopted the “Look East” policy in 2003 to spite the West following a diplomatic fallout over controversial agrarian reforms,

alleged human rights violations and the breakdown of the rule of law.

Since then, diplomatic ties between Zimbabwe and most Asian economies, especially China, have blossomed beyond the military support China rendered to the country’s guerrilla movements during the liberation struggles in the 1970s.

Chinese involvement in the local economy has become so dominant that some government officials suggested the country adopts the Yuan as its main currency and drop the US dollar which, along with the Botswana Pula and the South African rand, have kept the country afloat following the collapse of the Zimbabwean dollar.

Economists say despite the Chinese loans appearing cheap and “developmental”, the country is sinking further into a debt trap which will manifest itself in the next five to six years when loan repayments become due.

The Chinese have not only gained ground in tourism, but have also secured significant stakes in mining, agriculture and property sectors.

They have become a major player in the country’s economy through their state-owned enterprises like Anjin Investments — involved in a controversial diamond mining venture with the military at Chiadzwa — and Sino-Zimbabwe Holdings.

According to Global Witness’ recent report, Anjin has the most lucrative diamond concessions given in exchange for the $98 million for the construction of the army’s National Defence College along Mazowe road.

The Anjin projects also have an escrow account for channelling diamond revenues to the Chinese to repay the loan which has caused a storm in the coalition government. Finance minister Tendai Biti has accused Anjin of failing to remit enough revenue to the cash-starved national fiscus. Sino-Zimbabwe also has an interest in agriculture through Sino-Cotton and chrome mining along the Great Dyke.

Last year trade between Africa and China increased by a staggering 33 percent from the previous year to $166 billion.

This included Chinese imports from Africa amounting to $93 billion, comprising largely mineral ores, petroleum, and agricultural products while Chinese exports to Africa totalling $73 billion, comprised largely of manufactured goods.

Trade between the African continent and China increased further by over 22 percent year-on-year to $80,5 billion during the first five months of 2012.

Imports from Africa were up by 25,5 percent to $49,6 billion during these first five months of 2012 and exports of Chinese-made products, such as machinery, electrical and consumer goods and clothing/footwear increased by 17,5 percent to reach $30,9 billion.

China remained Africa’s largest trading partner last year for the fourth consecutive year.

In 1980, the total Sino-African trade volume was $1 billion. - John Kachembere

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