Can China Save Zimbabwe’s Economy?

The ‘look east’ policy of Zimbabwean president Robert Mugabe is well documented. But the deeper implications of Zimbabwe’s relationship with China are less well understood. Whether the relationship turns out to be a win-win one will depend much on how effectively Zimbabwe can build institutional and bureaucratic capacity to harness Chinese funds and investment for the benefit of the country, writes John Blessing Karumbidza, who doubts whether this will be the case, raising questions as to whether Mugabe is simply replacing Western colonialism with Chinese imperialism.

‘We have turned east where the sun rises, and given our backs to the west, where the sun sets’ – Robert Mugabe on the occasion of the celebration of 25 years of Zimbabwean independence, May 2005.

That China is a rising global economic player of note in Africa is well established. China’s interest in Africa is part of a calculated plan and policy to ‘go global’. Africa offers a strategic training ground and opportunity for Chinese capital. In an address to the Nigerian Senate in 2005, the Chinese President described China-Africa relations as ‘win-win economic cooperation’. This paper explores what will become of the renewed relationship between China and Zimbabwe, or more appropriately, the Zimbabwe African National Union, Patriotic Front (ZANU PF).

It is arguable that whether the relationship becomes what the Chinese President described as a ‘win-win’ relationship is not entirely dependent on China, rather on whether Zimbabwe has the institutional and bureaucratic capacity to turn Chinese funds and investment to benefit the country. There are reasonable doubts about the possibility of widespread and long term economic benefits to Zimbabwe. Temporary benefits so far include the political preservation of Mugabe reign and personal aggrandizement through corruption and kickbacks by his ZANU PF cronies flowing from Chinese investment.

On the whole, it would not be fair to blame the Chinese for acting to further their interests. It is incumbent upon the government of Zimbabwe and its people (and any other African country for that matter) to put in place a programme and strategy for chanelling funds and direct investment in a way that contributes to growth of its own economy.

Questions about Chinese financing and business involvement in African development programmes include: Are they based on an equal partnership? Are African governments able to negotiate terms of interaction without ‘pawning’ their countries and submitting their people to exploitation?

There is growing concern that China disregards human rights and democracy. It has a reputation for the abuse of workers’ rights, intolerance of political opposition; and dislikes a free press. In the name of non-interference, China justifies doing business with pariah states and dictators – which also means that civil society and the citizenry cannot hold them accountable for flaunting environmental and labour laws.

It is important to note however that this Chinese ‘non-interference’ policy cannot be permanent. The Chinese are well aware of this themselves. Where deals are signed with unpopular dictatorial regimes that could later be revised by a new government, it becomes necessary for the Chinese to protect such regimes. This explains their arming of the ZANU PF government in Zimbabwe. For example, China funded Zimbabwe’s acquisition of military-strength radio jamming equipment to block opposition broadcasts ahead of the 2005 elections.

Liberation ties paying off for China

In seeking to gain a hold on African resources and opportunities for sale of Chinese goods, China should be wary of losing political capital and ‘credibility’ it acquired from supporting African liberation struggles through conniving with dictatorial regimes. Prior to the present day questionable expansion, China had no burden of historical guilt in Africa, unlike the global North. China therefore gives credence to the likes of Mugabe when it claims to be protecting African sovereignty. Whereas British Prime Minister Tony Blair and Bono see Africa as a ‘scar on everyone’s conscience’, still troubled by their historical guilt of the slave and colonial era, the Chinese see Africa as a business opportunity.

The earlier 'ideological' phase of Chinese-African relations was part of a global strategy which by the mid 1970s saw some 15,000 doctors and over 10,000 agricultural engineers from China serving all over the Third World. It is common knowledge that many African countries exploited the cold war and the bi-polar world system by claiming to be socialist to gain assistance during liberation and after independence, going first to the West, then the East for development aid.

By 1977 Chinese trade with Africa reached a record US$817,000,000. The new orientation found institutional expression in the first China-Africa Co-operation Forum held in Beijing in 2000 - a mechanism to promote diplomatic relations, trade and investment between China and African countries. In the same year, China-Africa trade passed $10bn for first time. By 2003 it reached US$18.5bn. By 2004, nearly 700 Chinese companies were operating in 49 African countries. According to some estimates US$30 billion will change between Chinese and African hands this year. More recent Chinese estimates claim that it is already approaching US$40billion.

China is using the UN’s five-point proposal to ‘assist’ developing countries accelerate development, including: ‘Granting zero-tariff treatment for some exports from the least developed countries, increasing aid to the heavily-indebted poor countries and least developed countries and cancelling debts contracted by them, providing concessional loans and effective medicine for treating malaria, and training professionals.’

These steps will increase China’s access to the raw materials, energy and food resources it requires to sustain growth as well as feed its population. Observers have pointed to the fact that ‘more recently China's policy has shifted from cold war ideology to a more classical pursuit of economic self-interest in the form of access to raw materials, markets and spheres of influence through investment, trade and military assistance - to the point where China can be suspected of pursuing the goals of any classical imperialist’. Moreover, the heavy militarisation of the Zimbabwean government through Chinese loans and technology raises suspicions of China’s global ambitions to develop strategic military bases in Africa.

A closer look at the nature and character of Chinese investment in Zimbabwe

For Mugabe, who sees democracy and development as mutually exclusive, the fact that China has been able to raise 400 million of its people out of poverty over two decades, without being subjected to democratic elections and a free press serves as a useful example. Mugabe cites the present world order as a source of conflict and war, and calls for a more positive alternative order.

China was ZANU PF’s main supporter in the 1970s in the war against colonial rule. After independence, Zimbabwe declared itself Marxist-Leninist and announced the intention to reorganise society along socialist lines while courting Western aid and and the IMF.

Since 1980, Zimbabwe has revoked the liberation era ties with China to maintain low profile diplomatic ties, which are now upgraded to a development partnership. As a result of the lack of conditionalities on Chinese loans and funding, Chinese loans in the 1980s went into white elephant projects, such as the construction of the National Stadium.

By the end of 2004, Chinese investments in Zimbabwe were estimated at US$600m. To service the increasing Chinese investment and the 9000 Chinese believed to be living and working in Zimbabwe a bi-weekly flight between Harare and Beijing was launched.. Another US$600m was pledged at the June 2005 Asia Summit; and separate deals between Chinese state and private firms were signed with various Zimbabwean corporations. Renewed and increased China-Zimbabwe relations brought about now familiar circumstances: a Zimbabwean state now considered by the global North as a pariah state; an unprecedented economic slump; unemployment above 75 per cent, inflation heading towards 2000 per cent;, and shortages of consumer goods, most importantly fuel.

European and American travel sanctions, the lack of any IMF rating, coupled with the ANC in South Africa’s conditions of political and economic ‘normalisation’ have taken their toll. In August 2005 therefore, snubbing the efforts of Thabo Mbeki, Mugabe turned to China for funding to ‘revive the economy through increased agricultural production’. This led to Chinese promises for increased economic cooperation in many areas of the economy and an immediate US$200,000,000 to finance agricultural production and three MA-60 passenger planes.

Mugabe fought the 2005 elections on the argument that Zimbabwe must not become a colony again. But it is questionable whether he has not in fact simply replaced Western colonialism with Chinese imperialism. Having ceded control of strategic state firms and massive Chinese takeovers, including of railways, the electricity supply, Air Zimbabwe and Zimbabwe Broadcasting Corporation makes ‘win-win’ economic cooperation between China and Zimbabwe appears doubtful. Given that Zimbabwe has no comparative advantage over China in any sector, this opening up of the economy is most likely to benefit the Chinese perhaps even at the expense of Zimbabweans.

Zimbabwe lacks the institutional and strategic infrastructure to effect requisite economic transformation, and will have difficulty putting Chinese development loans to good use. The failure to revive the agriculture sector since the 2000 land seizures is a major concern.

It is not surprising therefore that the Chinese signed a contract to farm 386 square miles of land when millions of Zimbabweans are still landless. Recent land seizures saw most of the productive land fall into the hands of the elite, while the rural poor remain mostly landless. The Reserve Bank governor’s monetary policy statement emphasised the need for the agriculture sector to pull its weight in the economic turnaround of the country encouraging the new landowners (mostly urban ‘telephone farmers’) that ‘the battle cry is for all those who hold land to view it as an effective means of economic emancipation rather than a status symbol’.

Beyond the rhetoric of ‘the land being the economy and the economy the land’ there is no apparent strategy for the necessary transformation required for agriculture to release its potential for the economic turnaround needed in Zimbabwe. Zimbabwe cannot even benefit from the Chinese Maoist blueprint for rural economic transformation. The joint Chinese ventures in Zimbabwean agriculture amount to nothing more than land renting and typical agri-business relations that turn the land holders and their workers to labour tenants and subject them to exploitation.

There is additional fear that the takeover of strategic national firms by the Chinese companies is a security threat and can be seen as loss of national sovereignty. Most sinister of all is that the Chinese authorities must know that Zimbabwe is more than likely to default on payment of bills; and wishes precisely this, in order to obtain a tighter grip on Zimbabwean assets.

It would be naïve to think that China is motivated by the need to salvage the Zimbabwean economy from its economic abyss; indeed even the government does not itself believe this. It is simply a venture to save political face. For the Chinese, the investment in Zimbabwe is nothing different from Chinese ventures elsewhere on the continent. The current arrangements, simply allows Mugabe to keep the illusion of victory over the West; and enable his cronies in the army, police, government and business to partner with the Chinese in further exploitation of the masses. As in the 1980s, the poor people will be told to tie their stomachs and pull up their socks, and that a revolution is not for ‘cry babies’. For as long as Mugabe reigns over the abyss, the rhetoric of imperialist demons fighting against Zimbabwe will continue to suffice.

In the context of a politicized security system, silenced media and partial judiciary, the Chinese will drain the Zimbabwean economy and future generations will pay for it.

Anti-Chinese xenophobia: Attitudes towards the Chinese in Zimbabwe

When confronted with reports of crime against Chinese nationals (numbering not more than 10 000), Zimbabwe established a Chinese desk at the central police station in Harare. Mugabe has also appointed a Minister for Chinese affairs.

Already, the police officers, the University of Zimbabwe and schools have been asked to offer classes in Mandarin (soon after losing their love of French). Reacting to the new requirement to learn Mandarin, Washington Katema, ZINASU president, snubbed the move as a case of the ‘madness of the Mugabe regime scaling new heights’ and as a political gimmick to lure the Chinese into the country to bankroll the bankrupt regime. These excesses by Mugabe’s regime are likely to fuel xenophobia against the Chinese. Many reports of crime and abuse of women and children, rape and violent crimes against Zimbabwean nationals are yet to receive such a high profile response.

The economic background to the anti-Chinese sentiments is that Zimbabweans are horrified at the prospect of a permanent take-over of strategic state companies in what is generally considered a desperate move to perpetuate the tenure of ZANU PF. Trade unionists are worried that companies are being forced to close having lost their market to cheaper goods imported directly from China, and about the abuse of workers. The Chinese managers are alleged to have a negative attitude towards local people and massive dislike for trade unionists. At will they are known to ‘forget’ to understand English as a means to avoid dialogue with anyone critical of their actions. The Zimbabwe Congress of Trade Unions (ZCTU) was quoted as saying that a Chinese steel company operating in Willowvale in Harare has unacceptable pollution levels but the government treats them with kid gloves.

Conclusion

In the next half a century if all African countries adopted the shift from colonial languages that create a barrier to cultural unity, China could replace them with one language spoken across the continent. Maybe then, a ‘United States of Africa’ – under Chinese ‘prefectship’ – may become possible. After all, China would gain more advantages from a united Africa than from a balkanised continent. China is in Africa to pursue expansion, consistent with its search for global dominance, and to avoid being out-competed by the US. It therefore requires resources, raw materials, and markets, and space for its surplus population.

As far as Africa is concerned however, as long as poverty remains at the centre of the conflicts and crises in Africa, and there is no African reconstruction and development strategy, conceived and funded from local resources, the giant panda will carry on from where the colonialists and imperialists left.

Mugabe’s looking ‘east where the sun rises’, expecting Chinese loans to develop the beleaguered economy remains a fantasy as long as his politics and economics are wrong. Meantime, with Mugabe fixated on Chinese promises, the people of Zimbabwe, especially the middle class that decide to leave the country at the whims of Mugabe, and Chinese take over, in the pursuit of temporary respite in the diaspora, only have themselves to blame.

• John (Blessing) Karumbidza is an economic historian and researcher in rural sociology based at the University of KwaZulu-Natal in South Africa. He is a public intellectual seeking to promote the position that ‘another Afrika is possible’.

• This is a shortened version of an article by John (Blessing) Karumbidza. The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.

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