Re-enter the dragon

Bilateral trade is growing as Chinese diplomats explain their role in the negotiations for Zimbabwe's power-sharing government

China has stepped up humanitarian aid and sent several investment missions to Harare since the establishment of the power-sharing government in February. Commercial interest from Chinese companies seems to have risen sharply since Harare's suspension of the Zimbabwe dollar in favour of the US dollar.



The collapse of the Zimbabwe dollar led to losses for Chinese operators: from mining companies to the Shanghai-based arts impresario, Weng Ruiyang, who sold her interests in four Puxian opera companies to start up in Zimbabwe in 2004. The crash wiped out her investments and she has gone home to set up new opera companies.

We hear Chinese diplomats worked behind the scenes with their counterparts in Angola and South Africa to promote the ‘global political agreement’. China’s outgoing Ambassador to Harare, Yuan Nansheng, argues that the power-sharing talks might have failed without this co-operation. He insists that the decision last July by China and Russia to oppose with South Africa United Nations Security Council sanctions against Mugabe’s government was made at a critical point.

European and US diplomats in New York described the veto as ‘inexplicable’. Yet Chinese and Russian diplomats insist it was a diplomatic watershed in which two major non-Western nations allied with African states to defeat an initiative from the rich West. The quid pro quo for Africa is less clear, but doubtless Beijing and Moscow will call in the favour when needed.

Ambassador Yuan says Beijing’s stance has been vindicated: ‘The veto by China and Russia has provided a good foundation for the formation of the inclusive government…China and Russia vetoed the US proposals in line with the SADC [Southern African Development Community] and the African Union position. I do not think the inclusive government would have been established if Russia and China had not vetoed the US resolution.’

Business backs Beijing
Independent opinion in Harare is split. Business executives back the Beijing line that UN sanctions would have hardened ZANU(PF)’s position and delayed if not scuppered the power-sharing talks. Given political volatilities at the time, they say that sanctions might have prompted military commanders to intensify their attacks on Morgan Tsvangirai and the Movement for Democratic Change (MDC).

Democracy activists argue that the blocking of tougher sanctions against the regime by SADC, China and Russia delayed serious negotiations and strengthened ZANU(PF)’s hand. ZANU(PF) loyalists see China’s spat with the West over sanctions as proof of Zimbabwe’s importance in international power politics.

Whoever is right, China’s economic muscle is more important than ever to Zimbabwe – even if President Mugabe’s ‘Look East’ policy is being revised by both sides. Deputy Prime Minister Arthur Mutambara told a government conference in Harare on 4 June that the power-sharing government welcomed investment from all sources: ‘Look west, look east, look north, look south, and look at yourself.’ Given that the government is seeking a more than US$8 billion economic recovery programme in the worst international economic climate for three decades, this pragmatism makes sense.

Since 2003, ‘Look East’ has tried to harness Asian, particularly Chinese, investment and diplomatic support to compensate for falling Western inflows and UN sanctions targeting Mugabe and his allies. Yet few successful businesses have resulted from the various memorandums of understanding with China, Russia, Iran and Malaysia. Even in diamond and gold mining, where high profits have countered the effects of hyperinflation (AAC Vol 2 No 2), most of the profits have been made by Zimbabwe’s long-established, South Africa-dominated mining companies.

In contrast to Western countries’ cautious approach towards the new government – the USA offered $73 million to local aid agencies and Britain offered just 5 million ($8.2 mn.) to Prime Minister Tsvangirai on his fund-raising tour this month – China has been quietly lending support. The Chinese Business Council in Harare is busy, as are Chinese diplomats who want to promote the long-standing diplomatic and cultural ties: in 2006, Harare was one of the first countries in Africa to host a Confucius Institute. Beijing can profit from the new dispensation: both the MDC and ZANU(PF) want to rebuild trade and investment flows.

China’s Assistant Minister for Foreign Affairs Zhai Jun visited Harare in April and pledged $30 mn. in agricultural assistance. In May, Liu Guijin, China’s Special Representative for African Affairs, announced an ‘immediate’ $10 mn. in aid, half in humanitarian assistance and half directly as budget support. That was $1.8 mn. more than Britain’s latest aid commitment, but far less than the 60 mn. that will be given this year.

The government would welcome a stronger Chinese commercial presence, but Zimbabwean consumers have reservations about the quality of Chinese imports; many – such as the ubiquitous minibuses with Mandarin characters that plough Harare’s streets – have a poor reputation. One Zimbabwean economist told Africa-Asia Confidential the problems may have arisen ‘because China exported substandard goods to this part of the world and the Zimbabwean consumer turned out to be more discriminating than the populations of neighbouring countries.’

The other problem for China is the involvement of its people, along with some visitors from South Africa and the Middle East, in poaching of the dwindling rhino population. Around 120 rhinos have been killed since last March to feed the lucrative Chinese black market, according to Johnny Rodrigues, Chairman of the Zimbabwe Conservation Task Force.

Another problem was the scuffle in Hong Kong that ensued after First Lady Grace Mugabe and her bodyguards attacked a journalist, who was taking photographs. He wanted to sue Mugabe for common assault but the First Lady claimed diplomatic immunity and stopped the trial. Her daughter Bona’s bodyguards were also lucky in the second week of June. After beating up Sunday Times photographers Colin Galloway and Tim O’Rourke, bodyguards Mapfumo Marks and Manyaira Reliance Pepuka were spared a trial. The Hong Kong Justice Department found them to have been ‘genuinely concerned’ about Bona’s safety. The journalists are considering an appeal.

Margaret Ng, a senior legislator and lawyer, has written to the Justice Department demanding an explanation: ‘The Department’s decision not to prosecute the bodyguards will undoubtedly increase the concern unless it is clearly justified.’ And on the Grace Mugabe case: ‘The guards’ assault outside Ms. Mugabe’s home was unjustified. The complainants were identified as journalists seeking to photograph Ms. Mugabe. Any threat posed to her safety would seem remote.’

Remembering Beijing’s support for the ZANU(PF) government in the face of international censure for human rights abuses – such as arbitrarily forcing informal workers from the cities to the countryside, MDC loyalists are enthusiastic about China. At the Common Market of Eastern and Southern Africa meeting (which Mugabe chaired) on 4 June, Tsvangirai told Chinese news agency Xinhua that ‘China or America or whichever country can work with Zimbabwe. We are prepared to work with any country.’

So far, Finance Minister Biti has concentrated his economic diplomacy on Western and African governments and institutions. That could change: Biti and his MDC colleagues may start their own ‘Look East’ policy. In other states emerging from political crises, China has moved quickly to give support and scoop up new deals while Western investors await signs of recovery.

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