Chinese companies have earned their stripes

Today we carry the story that a number of Chinese companies were honoured at the inaugural Mining Industry Excellence  Awards held last week.

This is hugely symbolic. Chinese companies now constitute a large bloc of foreign investments in Zimbabwe – in fact the largest, representing a shift from the traditional status quo where Western conglomerates used to dominate industry and investment flows.

The shift came about through the adoption of the Look East Policy that the Government of Zimbabwe adopted at the turn of the millenium when the country was placed under Western sanctions, which among and along other things saw disinvestment by Western entities.

The disinvestment by Western companies was a dual response to the politics of the time.

The entities felt the need to “follow the flag” of their mother countries, as well as diffuse the risks associated with continuing investment in Zimbabwe, which could also draw punishment from Western countries of origin.

Chinese Investments have found a home in Zimbabwe

Politics influences economics. In some ways, Western companies thought that their disinvestment from Zimbabwe could help achieve political goals, chiefly the removal of the Government of the day.

This has not happened.

What has happened, ironically, is that companies and countries in the West have wasted glorious opportunities abounding in Zimbabwe.

They have been hoisted by their own petard, like the saying goes.

On the other hand, Chinese companies have happily taken the place.

They are not forced.

They have seen the wonderful prospects of Zimbabwe adopting a new, post-post-Independence economy, which drastically changed the nature and construct of local economics.

Together with local people, Chinese industrialists have inherited the graveyards of former businesses, and have resurrected a new local economy.

A visit to the erstwhile industrial areas reveals a much changed complexion and a new political economy.

Critics of the new regime will argue that this is not exactly the “industry” of yore.

Indeed not!

There is a rebirth and reconfiguration.

Many small and medium businesses belong to the new black owners and new foreign investor.

Chinese companies took lots of risks to come to invest in Zimbabwe – a Zimbabwe under sanctions – with a lot of domestic problems.

The companies’ growth in Zimbabwe is something to be lauded.

Taken from a policy perspective, these companies have answered President Mnangagwa’s call that “Zimbabwe is Open for Business”

There are also subsidiary policies such as “US$12 billion Mining Economy by 2023”.

Now, Chinese companies are all but carrying the hopes of the nation.

With giants such as Tsingshan that is investing into the Mvuma steel plant, Chinese companies in various mining cohorts can easily bring the envisaged revenues.

There is a recognition that the US$12 billion target is actually too small both from the potential of investors, current and prospective, as well as the national potential as a resource endowed country.

We could easily double that in the next 10 or so years.

Praise should be reserved for Chinese companies and government for investing in ZImbabwe when everyone else across the globe was looking the other way.
It is a kind of irony that sometimes Chinese companies are criticised and ostracised for doing what any investor should do: come here and make money!

It is understandable that sometimes laws are broken and standards not met.

However it is the duty of Government to enact laws and regulations as well as enforce them so that operations of companies are above board.

This is not just about chinese companies only. It is about the whole business environment.

The government of China has indicated enjoins  its companies to follow the rules, and supports punishment of offenders.

China has been forthright.

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