Nearly three years have passed in which China “has publicly shied away from Zimbabwe” but there are signs that Beijing has its eye, once again, on the country’s rich mineral reserves.”⁽²⁾ Since Zimbabwe’s elections in 2008, which compelled Zimbabwean President Robert Mugabe, to form a unity Government with his opponent, Morgan Tsvangirai, bilateral relations with China have cooled. During the next three years, “Chinese officials hedged their bets over the country’s leadership and squirmed in the fierce glare of international condemnation.”⁽³⁾ Furthermore, China cooled down its relationship with Zimbabwe when it was reported that a Chinese weapons shipment had arrived in the country simultaneously with the break out of violence around national elections in 2008.

In February 2011, news agencies reported the US$ 3 billion that China has offered to secure rights to platinum deposits in Zimbabwe and how this investment may be derailed by reservations on part of the Government. As a result of this, the Chinese Foreign Minister, Yang Jiechi, has paid a two-day official visit to the country, en route to visiting other African countries, in light of strengthening current bilateral relations between Beijing and Harare. This paper discusses the bilateral relationship between China and Zimbabwe in light of the recent offer of a master loan facility in exchange for Zimbabwean platinum reserves.

Unease over China’s offer for platinum deposits

China has come up with a controversial US$ 3 billion offer for vast local platinum reserves in a move that has stirred a fresh political storm in the Government of Zimbabwe. The offer, which is likely to be rejected as it mortgages the country’s platinum resources and crucial streams of revenue, has caused serious political problems between the two countries, who claim to be close allies.

The deal with China, to be funded through the China Export-Import (EXIM) Bank, will provide Zimbabwe with US$ 3 billion to resuscitate its economy, which has been wrecked by protracted bad policies. The offer is described in official Government documents as a “master loan facility.” In return for the financial assistance, China will receive platinum deposits in the Selous and Northfields concession. The concession has 30 million ounces of platinum and it is actually worth between US$ 30 billion and US$ 40 billion.

The deal has caused friction in the fragile coalition Government, with the Morgan Tsvangirai-led Movement for Democratic Change (MDC) spokesperson, Nelson Chamisa, telling NewsDay, a New York City-based news source, that “it [is] not a Government-to-Government relationship, but a [Zimbabwe African National Union-Patriotic Front] ZANU-PF–China relationship.”⁽⁴⁾ On 6 February 2011, it was reported that Zimbabwean Minister of Finance, Tendai Biti, was furious at the deal. An Asian diplomat, who spoke to South African Sunday Times newspaper, is quoted as saying that “now we hear that Biti is not going to China because he feels the transaction is a fraud. He thinks the Chinese want to rip-off Zimbabwe because they know the country is broke and would not, in their view, refuse that amount of money.”⁽⁵⁾

According to an unidentified, senior Zimbabwean Government Minister, “the problem here is that China, the world’s second largest economy, thinks it can railroad Zimbabwe into this deal because it is bankrupt, flat broke, and desperate.”⁽⁶⁾ The Minister also added that the “deal is so dodgy and scandalously unfair that it eventually amounts to a major rip-off.”⁽⁷⁾

After China EXIM Bank offered Zimbabwe the financial package in early February 2011, Biti was expected to travel to Beijing to finalise the deal with Chinese authorities. According to the Asian diplomat, “discussions have been going on for a while now, but Zimbabwe is very unhappy with China over the issue.”⁽⁸⁾ Allegedly, Biti will not travel to China.

Jiechi visit to Zimbabwe in the aftermath of a political storm

Instead, amid the political storm over foreign businesses in Zimbabwe, on 9 February 2011, China’s Foreign Minister, Yang Jiechi, started a two-day official visit to the country to strengthen ties. The visit was carefully watched inside Zimbabwe, where Zimbabwean President Robert Mugabe’s supporters staged a violent demonstration against foreign domination of the economy. On 7 February 2011, Mugabe’s supporters took to the streets of Harare to protest against the foreign businesses they say dominate the economy. Amongst the businesses targeted were Nigerian and Chinese shops.

In a statement soon after his arrival, Jiechi hailed Zimbabwe as an important partner in Southern Africa and stated that the two counties share “a deep bond of traditional friendship.”⁽⁹⁾ Jiechi further added that China’s relations with the African country had “stood the test of time, even under changing international circumstances” and that “China is ready to work with Zimbabwe to further enhance political mutual trust, expand mutually beneficial cooperation, and steadily elevate our friendship and cooperation.”⁽¹⁰⁾ Furthermore, the diplomat stated that he is convinced “that with concerted efforts from both sides, this visit will produce positive results and take [the] China-Zimbabwe friendship and cooperative relations to a higher level.”⁽¹¹⁾ It has not been reported if Jiechi discussed the US$ 3 billion deal with any of the Zimbabwean officials he met with, even though this visit took place soon after displeasure at the offer was voiced. As such, it is currently unknown whether the Zimbabwean Government will approve the deal in the near future.

Conclusion

As China has been slowly encroaching on Zimbabwe’s economic landscape despite it being viewed as a disaster zone by many, it has been accused of defrauding Zimbabwe by taking advantage of the country’s financial problems. This statement becomes (somewhat) true when considering the fact that the Asian tiger offered to pay just US$ 3 billion for platinum reserves worth more than ten times that price (at US$ 30-40 billion). Further concerns have also been voiced that the cash injection, coming just months before a national election, could sustain Mugabe’s regime.

NOTES:

(1) Contact Denine Walters through Consultancy Africa Intelligence's Asia Dimension Unit (asia.dimension@consultancyafrica.com).
(2) Moore, M., ‘What does China want from Zimbabwe?’, UK Telegraph online, 10 February 2011, http://www.telegraph.co.uk.
(3) Ibid.
(4) Sibanda, T. and Guma, L., ‘Uproar over Zimbabwe platinum deal with China’, SW Radio Africa News, 10 February 2011, http://www.swradioafrica.com.
(5) Ibid.
(6) ‘Growing unease at China’s role in Africa’, China Digital Times, 19 February 2011, http://chinadigitaltimes.net.
(7) Ibid.
(8) Ibid.
(9) ‘Zim a key partner, says China’, The Zimbabwean Herald online, 11 February 2011, http://www.herald.co.zw.
(10) Ibid.
(11) Ibid.

Written by Denine Walters ⁽¹⁾