Zimbabwe goes the China way

President Emmerson Mnangagwa has for a while now been likened to former Chinese leader Deng Xiaoping.

The late paramount leader of the People’s Republic of China between 1978 and 1989 is credited with launching the Asian giant’s economic reform trajectory.

While the comparison between ED and Deng can be argued to be far-fetched given the two country’s political, economic and social dynamics, it would be foolhardy to ignore some of the similarities and lessons that Zimbabwe can learn from the Chinese model.

The fact that some Chinese experts also see some elements of former President Deng in President Mnangagwa is a refreshing account.

A Chinese tycoon and business expert who was in the country last week reckoned Zimbabwe is poised to undergo rapid economic transformation that is similar to what China’s economy went through in the late 1970s to the 1980s.

Addressing a high profile meeting in Harare last Monday night, China-Africa Business Council chair, Mr Huarong Zhang said Zimbabwe current reform process bears striking resemblance to that of China of 40 years ago.

Mr Huarong who is also a Chinese business tycoon and a member of the Centre for China and Globalisation said: “I believe that in the next 10 years, Zimbabwe will develop fast.

“I believe the people here and the leadership of the local government will be able to conquer our biggest enemy; that is poverty.

“The reform and opening policy gave us chances to develop. China used to be one of the poorest economies in the world, but in 40 years’ time, we have become one of the strongest and fast developed countries; and we have solved poverty issues for 700 million people.

“Zimbabwe is a beautiful country, rich soil and God has been generous with Zimbabwe, you have educated people.

“Zimbabwe right now resembles 30 years ago in China. I want to invest in manufacturing to create jobs, so that Zimbabweans will have jobs, enable the production of products that are consumed locally to be produced locally.”

According to Mr Huarong one of the most important policies that Government should prioritise is the protection of business investors’ interests.

Mr Huarong believes that Zimbabwe can win big if the country is honest and open to investors.

“The Chinese government through the reform and open policy, they are united and honest to foreign investors, they protect foreign investors.

“A lot of foreign investors come to China, bring skills, capital and gain wealth and also helped a lot of Chinese talents to grow and created substantial jobs in China and bring in a lot of foreign currency and it boosts the economic development of China.”

He said Zimbabwe should increase exports to China, which has a vast market for raw products from Africa.

“I also want to boost exports of the Zimbabwe agricultural products to other countries. I have strong conviction.

“Chinese entrepreneurs in China will gain support of government and support from the Chinese government,” he said.

Mr Huarong who has investments in the footwear industry in Ethiopia said he is also keen to set up shop in Zimbabwe.

President Mnangagwa has on a number of occasions spoken about the need to protect investors and during the launch of the country’s Investment Policy earlier this year, the Head of State and Government affirmed his commitment to the same.

Said the President: “The new investment law shall ensure non-discrimination between domestic and foreign investors and shall accord all foreign investors and their investments treatment no less favourable than that accorded in like situations to domestic investors in relation to the establishment, expansion, operation and protection of their investments, with any specific exceptions being provided for in a negative list to be annexed as a schedule to the law. The new investment law will enforce the protection of investors.”

President Mnangagwa recently visited China and struck an agreement with the Asian economic giant’s President Xi Jinping to unlock funding for old and new projects worth billions of dollars.

Since the visit, a series of Chinese investors have visited Zimbabwe to follow up on commitments made and also unlock new partnerships.

According to the World Economic Forum (WEF), China’s meteoric rise over the past half century is one of the most striking examples of the impact of opening an economy up to global markets.

WEF says over that period China has undergone a shift from a largely agrarian society to an industrial powerhouse and in the process it has seen sharp increases in productivity and wages that have allowed China to become the world’s second-largest economy.

This year, Zimbabwe’s Government has set its economic growth target at 4,5 percent with further growth expected in the next few years.

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  • Mnaizi

    It’s great to see many people comparing ED to Xiaoping in China. He was indeed one of the great development leaders of the last 50 years. Park Chung Hee in South Korea is another such leader. Xiaoping did open up a bit Chinese economy to become what it is today but it’s important to note he didn’t do a gorbachev. Even today in China there’s a lot of investment regulations (for exemple, Negative list, importation quotas and various tariff to protect the Chinese enterprises and infant industries, joint-venture regulations to access the local market, and SEZs -usually export oriented industries by law -80% or more to be exported- where foreign investments limits and regulations don’t apply or don’t apply the same way). Many Chinese companies are also state-owned and they have been very important into the current transformation, industrialization and economic development of China. Today and in the last few years they relaxed a lot of those regulations but they still very much exist and more importantly for us, they existed when China (as well as other countries like South Korea, Malaysia, etc) were transforming themselves, transitioning from a low income agric-based economy to the fully developed high-income industrialized economy they are today (or close to be). So they did use various trade and investment regulations to advance the interest of China in promoting the creation of enterprises in every sectors of the economy like other developpped countries did and still do (USA, Europe, Japan, etc). Xiaoping didn’t blindly open up the economy. Africa is open for business since the Independence with marginal benefits for African people and sustainable development. It’s what you do to develop the domestic economy and investment sector that is important. Xiaoping instead adapted the various economic tools existing (private enterprises, banks, currency/monetary policy, investment regulations, taxes, education, joint-ventures, conglomerate, domestic investments, parastatals, importation quotas, etc) to promote the interest and sustainable economic development of his country. Ultimately, creating a solid domestic economy in every sectors. With Chinese enterprises using the latest technologies and best business practices (iso, etc). This is good for both local and foreign investors. Creating a solid foundation to the economy in every sectors (from banking to manufacturing finished products passing by hi-tech and agriculture-green revolution) is what attract domestic investment and foreign investments like joint-ventures, subcontracting (not the other way around). Foreign investors and multinationals want to invest in safe places. With abled and experienced enterprises, engineers, technicians and workers in every sectors of the economy. They don’t want to start companies from ground up as it defeat the purpose of delocalizing production, reducing production cost or find safe haven for their money and investments. So it all boil down to creating a solid foundation to the economy (including domestic investments, banking/financial sector, balanced monetary policy and local currency since central banks lend money to national banks who then lend money to startups and enterprises) with solid enterprises in every sectors based on value addition, innovation, productivity and efficiency. Thus, Zimbabwean enterprises (private or public) providing products and services needed by Zimbabweans and export markets as well as jobs for Zimbabwean people. That’s what I retained from great leaders and country like Xiaoping. China was still a low income agric based underdeveloped economy some 60 years ago. Same with South Korea. What is interesting to observe is their transition and transformation when they were still a low income underdeveloped country. They have been able to harness and adapt the various economic tools at their disposal to develop a solid domestic economy in every sectors and now they can fully take part into the global economy and progress.