ZIMBABWE and China have been strengthening their bilateral relations over the past few years, especially under the Second Republic.
Trade Focus
Allan Majuru
The growing ties have seen several Chinese-funded projects being implemented in Zimbabwe and increased inflows of investment and knowledge transfer.
The focus now has been unlocking further economic benefits for local businesses, particularly in trade, investment and tourism.
Under an initiative anchored in the economic diplomacy agenda that is being implemented through the Ministry of Foreign Affairs and International Trade, Zimbabwe has begun harnessing opportunities arising from its excellent relations with China.
To this end, Zimbabwean and Chinese businesses will have an opportunity to engage in a forum scheduled for May 30 to June 1 in Beijing, where focus will be on strengthening economic ties.
The forum — organised by ZimTrade, with support from the Zimbabwe Investment and Development Agency and the Zimbabwe Tourism Authority — intends to accelerate engagements between Government institutions and the private sector in the two countries. Local companies will discuss supply contracts with Chinese businesses, and this is expected to drive the country’s exports to the Asian market.
China’s imports from Zimbabwe have grown at an exponential rate over the past few years on the back of good political relations between Harare and Beijing.
Going forward, focus should be on boosting value-added products and fresh horticultural produce. Statistics from Trade Map show that Zimbabwe’s exports to China have grown over the last five years from US$960 000 in 2017 to US$256 million in 2021.
Although the figure is presently dominated by primary products, the huge jump shows potential for Zimbabwe to grow its exports to China. It also shows that local companies are now directly accessing the Chinese market, unlike previously, when most of them lost out to middlemen in other countries.
Engagements from the Zimbabwe-China Business Forum are, therefore, expected to facilitate further direct market access, as participating companies will connect with leading distributors of value-added products and horticultural produce.
Expectations are that exports to the market will continue to grow, and Zimbabwe will leverage on available opportunities to introduce new product lines into the market.
China’s import structure
With a market of over 1,4 billion people, according to the World Bank, China is one of the biggest importers in the world.
According to Trade Map, China’s imports have grown from around US$1,82 trillion in 2012 to US$2,7 trillion in 2021.
Some of the top imported products by China last year are electrical machinery and equipment; mineral fuels, mineral oils and products of their distillation; ores, slag and ash; machinery, mechanical appliances, nuclear reactors and boilers; and medical equipment.
Other top imported products are vehicles other than railway or tramway rolling stock; plastics and their articles; minerals and copper; organic chemicals; oil seeds and oleaginous fruits; and iron and steel.
Leading exporters to China last year were Taiwan (US$250 billion), the Republic of Korea (US$213 billion), Japan (US$206 billion), the United States (US$181 billion), Australia (US$164 billion), Germany (US$120 billion), Brazil (US$110 billion) and Malaysia (US$98 billion). Other countries that make significant shipments include Vietnam, Russia, Indonesia, Thailand, Saudi Arabia, Chile, France, Singapore and Switzerland.
On the continent, South Africa leads top exporting African countries to China, having exported products worth around US$33 billion in 2021. Other top exporters from Africa to China were Angola (US$21 billion), the Democratic Republic of Congo (US$11,67 billion), Congo (US$4,67 billion), Zambia US$4,39 billion) and Libya (US$3,27 billion).
For Zimbabwe, although exports to China are still to reach the billion-dollar mark, there is room to grow the presence of local products by focusing on areas in which the country enjoys competitive advantage.
These include horticulture and the essential oils sector.
Opportunities
Zimbabwe’s good climate favours the production of top-quality products that can perform well on the Chinese market.
For example, China is looking for Zimbabwe’s citrus products. It has already signed a protocol to facilitate easy importation of locally grown citrus fruits.
The protocol will run for five years. It will see Zimbabwean farmers exporting fresh citrus varieties, including sweet orange, mandarin orange, grapefruit, lemon and sour orange.
Local citrus producers have mainly been exporting to South Africa and the European Union. The agreement with China will, therefore, broaden their export destinations.
Opportunities for local producers are huge.
In 2021, China imported fresh and dried citrus fruits worth around US$532 million — most of which were grapefruit; mandarins, including tangerines and satsumas; and wilkings. South Africa is currently the top exporter of citrus fruits to China, accounting for US$210 million, followed by Australia (US$86,7 million), Egypt (US$72,1 million) and the US (US$49,3 million).
Exhausting the current protocol for citrus will make it easy for Zimbabwe and China to enter into other agreements for fresh produce and fruits.
Other horticultural produce with potential include berries, stone fruits and nuts.
Over the last five years, China has significantly grown imports of fresh strawberries; raspberries; blackberries; black, white and red currants; and gooseberries from US$1,89 billion in 2017 to US$6,41 billion in 2021.
Imports of stone fruits have also gone up from US$899 million in 2017 to US$2,25 billion in 2021, whilst imports of nuts such as macadamia, almonds and hazelnuts grew from US$722 million to US$2,23 billion during the same period. On the other hand, China grew its imports of fresh and dried dates, figs, pineapples, avocados, guavas, mangoes and mangosteens from US$424 million in 2017 to US$1,07 billion in 2021.
Fresh and dried bananas, including plantains, also rose during the same period, from US$580 million to US$1,04 billion.
There are also huge opportunities to supply essential oils. According to Trade Map, the country has grown its imports of essential oils and resinoids, perfumery, and cosmetic or toilet preparations from US$7,6 billion in 2017 to US$24,1 billion in 2021.
This growth has largely been anchored in imports of beauty or make-up preparations, as well as preparations for skin care, whose import value grew from US$5,8 billion in 2017 to US$20,3 billion in 2021.
Essential oils used in aromatherapy such as rosemary, peppermint and sweet orange oils are some products that local farmers and businesses could consider for export to China.
With abundant natural resources such as indigenous fruits and spices, value addition is another way for local producers to earn more.
In addition, oils from seeds of plants such as baobab, marula, moringa and mongongo also provide excellent opportunities to tap into the essential oils market in China.
Allan Majuru is ZimTrade’s chief executive officer