HomeLocal NewsZim to get bailout package soon: Lin

Zim to get bailout package soon: Lin

FOLLOWING Finance minister Patrick Chinamasa’s visit to China in January and last month, President Robert Mugabe will reportedly be visiting Beijing later this month hoping to secure a US$4 billion bailout package.

Zimbabwe Independent reporter Herbert Moyo (HM) spoke to Chinese ambassador to Zimbabwe Lin Lin (LL) last week on the scheduled visit and the general state of Sino-Zimbabwe relations. Find below the excerpts:

HM: How would you describe current China-Zimbabwe relations from a political and from an economic perspective?
LL: Our relations date back to the days of the liberation struggle when Zimbabwe was fighting to achieve independence. After that China and Zimbabwe relations have continued and expanded. Zimbabwe is a good friend, brother and partner of China. We are (Zimbabwe’s) single largest economic partner.

HM: China has defended Zimbabwe on the international stage, for example in 2008 when together with Russia, it blocked a UN Security Council resolution on Harare. What informs China’s position on Zimbabwe?
LL: Politically, both China and Zimbabwe are developing countries. We have lots of common interests to defend. We support Zimbabwe’s efforts to ensure social and economic development.

HM: Why talk about defending Zimbabwe’s territorial integrity and sovereignty when it does not appear to be confronted by any external threats?
LL: There are issues like the sanctions imposed by some countries. We believe imposing sanctions is not the right way to solve disputes — there should be dialogue and consultations. Sanctions are not helpful.
And also Zimbabwean people don’t deserve to be punished like that, that’s why in 2008 China used its veto and we believe that this played a positive role in finding the final solution to the Zimbabwean problem. With Sadc mediation, a solution was reached and that was the inclusive government, which we believe was the best solution at the time.

HM: Over the years economic and trade relations between the two countries have been improving. What is the volume of trade now?
LL: As far as I know the trade volume was at US$562 million in 2010, but last year it reached US$1,1 billion and this is almost double the 2010 figure. Trade is in Zimbabwe’s favour as exports to China are currently at US$6,88 million while Zimbabwe’s imports are US$4,14 million. These are figures from the Chinese customs.

HM: How many Chinese companies are operating in Zimbabwe and in which sectors of the economy?
LL: There is an Association of Chinese Enterprises in Zimbabwe and at the moment there are 60 registered members. They are in different areas, agriculture, mining, telecommunications, manufacturing; in fact all sectors of the economy. These (60) are major ones, but there are many other smaller companies.

HM: China has been helping Zimbabwe by giving it loans and development aid. How much has China poured into Zimbabwe in the last 10 years?
LL: I don’t have figures but since 2010, China has provided Zimbabwe with more than US$100 million in grants and interest-free loans. I believe these grants and interest-free loans are more than the amounts provided to other African countries because we understand Zimbabwe is faced with more serious challenges at this stage and needs more help. We have also provided concessionary and preferential loans, which have reached US$1 billion to date for various projects like the National Defence College, the Victoria Falls Airport upgrade and Kariba South Power Station expansion project as well as the Harare water project, besides the provision of medical equipment for hospitals.

HM: Chinese President Xi Jinping and Prime Minister Li Kequiang both visited Africa this year and last year, but omitted Zimbabwe. If Zimbabwe is so close to China as you say, then why did they not visit Harare?
LL: China always considers Zimbabwe as our close partner and there are many high-level exchanges between these two countries. Every year we receive cabinet ministers from Zimbabwe and senior Chinese officials also come here like the visit of the Vice-Premier Wang Yang in 2012. All this shows the importance we give to relations with Zimbabwe. Last year Zimbabwe was busy with elections when the premier visited Africa. Besides, there are more than 50 African countries so it is impossible to go to all countries in one visit. But because Zimbabwe is considered to be very important, President (Robert) Mugabe has been invited to pay a state visit to China.

HM: In fact, we have gathered that Mugabe will be going there on August 21. Can you confirm this?
LL: The two sides are still in discussions about details of this visit, so it is not convenient to give details now. Right now both sides are working hard to ensure the success of the visit.

HM: We understand the visit is likely to result in the announcement of a US$4 billion package in development assistance to Zimbabwe. Is this correct?
LL: Normally, during a head of state’s visit to China my government provides some development assistance. This is normal practice, but I don’t know how much it will be this time. I can assure you that every year China provides development assistance to friendly countries.

As for the extension of lines of credit, this is between the Zimbabwe government and financial institutions in China and that is subject to negotiations. Minister Chinamasa visited China in January and put forward proposals to China Exim Bank for getting assistance, but I haven’t got any details. But I would like to make it clear that both the Chinese financial institutions and the Chinese government would like to help our friend, Zimbabwe. We would like to see if an agreement can be reached. But it is not something very simple. It is not like you have US$5 and you spend it to buy a T-shirt, something as easy as that — this is a serious issue. So it needs a serious study from both sides and lots of discussions.

After that visit the two sides have been keeping contact and the minister went back to China early this month (July). But my understanding is that this visit was for a workshop to share our experiences in economic development in the setting up of special economic zones which China has done.

HM: What is Zimbabwe looking for? Is it budgetary support, a concessional loan or investment?
LL: I am not involved in the negotiations between the China Exim Bank and the Ministry of Finance here. As to how much I cannot say and it will be best for you to ask someone from the Ministry of Finance.

HM: Lastly, ambassador, is there any assurance Zimbabwe will eventually get financial assistance from China?
LL: I can assure you that every year China provides development assistance to friendly countries like Zimbabwe. So I would say this is a very good opportunity for Zimbabwe to get more development assistance from China in the near future.

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