China urges “strong” investment regulation

Albert Chavhunduka

China has urged Zimbabwe to implement stronger policies to regulate investments and help the country to attract more foreign investors and boost economic development.

Zimbabwe is poised to benefit from increased Chinese foreign direct investments, but there are worries that the country’s lax systems could deter investors.

China has increasingly become wary about a number of loopholes in Zimbabwe and poor due diligence and monitoring, that have seen Chinese investors take the fall after public outcries despite meeting basic requirements set out by Government including attaining environmental certification and being allowed to move to investment sites.

A recent case was that of Freestone Mines in Mutare, which was forced out of a quarry project that it had entered into a partnership with the local authority, following a huge outcry by residents and civil society organisations.

Although China intervened and ordered its company out to diffuse the incendiary political situation, there is a strong view that there was culpability on the part of local authorities – as well as central Government – in allowing a controversial project to go ahead in the first place.

The quarry project was feared to cause damage to the city’s water system and environment, while blasting could endanger residents.

This, according to impeccable sources, showed one of the glaring examples of poor due diligence on the part of Zimbabwean authorities.

In an interview with the State media at the weekend, Chinese Ambassador to Zimbabwe Guo Shaochun called on Government to have stronger regulation.

“A good investment environment is only possible when the strong regulation of the host country, objective and unbiased media and strong public support combine,” said Ambassador Guo.

China is also worried about some civil society players who are increasingly targeting Chinese owned businesses.

Ambassador Guo admitted some errant Chinese companies had been found on the wrong side.

 “It is critical to bear in mind that isolated incidents that isolated incidents involving one or two investors cannot be ground for attacks on the overwhelming majority of Chinese companies who observe the law, protect labour rights and the environment, respect local traditions and communities and give back to communities,” he said.

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