CHINA this week urged the Zimbabwean government to respect property rights, address concerns over policy inconsistency and clarify its indigenisation policy to attract much-needed investment into the country.
By Owen Gagare
In an interview in Harare on Monday, the day President Robert Mugabe met his Chinese counterpart Xi Jinping in Beijing, China’s acting ambassador to Zimbabwe Zhao Baogang said although relations between the two countries are “very strong”, China had concerns over the government’s policy inconsistencies “particularly in the mining sector”.
He added that the Chinese have been engaging the Zimbabwean government over the issue for some time.
Despite Zimbabwe and China signing a number of mega deals including the Kariba South Power Extension project, relations between the two countries took a dip last year after government forced all diamond miners in Chiadzwa to cease operations. The companies were forcibly moved without securing their equipment.
Government, through the Ministry of Mines and Mining Development, then merged all mining companies into the Zimbabwe Consolidated Diamond Company (ZCDC) where it has majority shareholding.
Chinese companies Anjin and Jinan were affected by the merger, angering authorities from the Asian nation, who view the move as an assault on property rights and a violation of the investment agreement the companies had with government.
“We have very strong relations and our co-operation is getting much stronger. Certainly we also have some challenge, that is the inconsistency of the policy and sometimes this is also aggravated by the Zimbabwean minister(s). So this is maybe one of the concerns and certainly Chinese business may know better than me,” said Zhao.
He said they were engaging the government over Chinese investments, adding the country needs to put favourable conditions to attract foreign direct investment.
“Yes the discussion is always under way and we disagree now (sic) for quite some time. Whenever we have any concerns on indigenisation or economic policies of the government we will talk to the government. Now we have successful discussions with the Ministry of Mines and Mining Development and also the Economic Planning (ministry),” he said.
“We also have had fruitful discussions with the Ministry of Foreign Affairs. We believe that we continue with the discussions and I think that Zimbabwean government will take our concerns into consideration and they will create more and more favourable conditions and policies for foreign investments including Chinese investors.”
Zhao expressed optimism that Chinese concerns over Anjin and Jinan’s investments will be resolved “soon” although he declined to reveal how the negotiations had gone and what the likely outcome would be.
“We have been holding discussions with the Zimbabwean government on this issue on the diamond issue. I think that quite soon it will be resolved,” he said.
Several ambassadors accredited to Zimbabwe including the European Union, British, French, Australian and Danish diplomats, among others, have raised concern over the indigenisation policy, property rights violations and Harare’s policy inconsistencies.
Numerous business delegations, which have visited the country over the years have also called for policy clarity and respect for property rights.
Despite the warm relations between the two countries, Chinese officials have consistently raised critical issues that President Robert Mugabe and his government are uncomfortable dealing with. For example, when Vice-President Emmerson Mnangagwa visited Beijing in 2015, the Chinese raised fears about Mugabe’s age and lack of Zanu PF leadership renewal.
They also raised concern over Zimbabwe’s investment climate and ease of doing business, the country’s relations with Western countries, government’s failure to tackle corruption and bureaucratic red tape, among other thorny issues.
The Chinese also said they are worried about Zimbabwe’s high political, economic and country risks, as well as poor credit rating.