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John Metzler Archive
Tuesday, April 5, 2011

China buying up
resource-rich Africa, Zimbabwe in particular

UNITED NATIONS — The People’s Republic of China has gone on a buying spree on the resource-rich but economically underdeveloped African continent. And central to the plan has been massive investments into raw materials as well as political influence in a number of key African states, notably Sudan, Angola, and Zimbabwe. The reasons are starkly mercantile but equally politically motivated.


Also In This Edition

China's Hu Jintao received Zimbabwe's Robert Mugabe in Beijing.  

Mainland’s China’s high growth economy needs raw materials and oil to fuel Beijing’s high octane business growth. While Beijing business and banks have shopped the world to find access to mineral resources and the petroleum to lubricate the economy, the plan in recent years has been to buy mines, petroleum rights, and agri-business. Oil rich Angola and Sudan are obvious choices. China needs the petroleum and Beijing is hardly concerned about the authoritarian political pedigree of such African regimes.

Recently the China Development Bank announced its intent to invest $10 billion in Zimbabwe, a resource-rich and once prosperous Southern African land which has literally been run into the ground during the thirty year misrule of Comrade Robert Mugabe.

Think of it this way. The Marxist Mandarins running China Inc. view the world as a giant Monopoly game board. Using their massive foreign exchange reserves ($3 trillion dollars) sloshing around, they buy nearly everything they land on. In the Third World this can translate into whole countries, economies, and often the allegiance of their political regimes, evoking latter day tribute states.

Zimbabwe’s current GDP is about $4 billion annually; thus this foreign investment would amount to nearly multiple times the country’s GDP! The investment would bring influence and clout. Zimbabwe’s current per capita income is a piddling $157 per year, a shadow of what it was at independence in 1980.

Now look at the cool and calculated commercial logic: Gold, and the second largest platinum reserves, as well as industrial diamond deposits. Both gold and platinum are selling at record high levels. Add investments in the country’s high quality cotton industry (for China’s textile mills), and tobacco, and you see inroads into agriculture too. Enhanced cotton production is planned after the Cotton Company of Zimbabwe and a Chinese firm, Sinotex signed a US$500 million deal to finance local production and purchases through a contract growing plan, according to the Zimbabwe Telegraph. The paper adds that the deal would allow Cottco, which currently contracts 200, 000 farmers to grow seed cotton, to support an additional 100,000 growers.

According to Beijing’s official statistical office, the two-way trade between China and Africa reached $115 billion last year, a 43 percent jump in trade.

In the 1960’s and 1970’s the PRC pursued a radical revolutionary agenda in its relations with many African states. Communist China, along with the Soviet Union, supported many “liberation movements” in Southern Africa. But today, political ties and revolutionary solidarity are trumped by Beijing’s business bottom line.

PRC Foreign Minister Yang Jechi recently visited Zimbabwe and met with Robert Mugabe, to discuss budding business and political ties. Last year Beijing invested $59 billion globally.

At the same time regional states, among them South Africa, are pressing Mugabe for political and economic reforms. The Southern African Development Community issued a strong statement calling for an end to “violence, arrests and intimidation.” Indeed Mugabe’s ruthless one-man rule has been characterized by political harassment, intimidation, and forced expropriations of businesses. The current government of national unity deal between the ruling ZANU-PF political party and the MDC opposition has proved fractious at best.

Now Mugabe has called for new elections in June which will hopefully not repeat 2008’s bloody contest. But given the civil war in Libya where his long time comrade Col. Gadhafi is under assault, Mugabe has become decidedly nervous about the future.

China recently signed a $700 million loan for Zimbabwe during the visit to Harare by Vice Premier Wang Qishan. Yet even Beijing’s buyers are concerned about Mugabe’s plans to nationalize all foreign business, especially mines, worth over $500,000. According to South Africa’s influential Business Day newspaper, Wang emphasized that “he hoped Chinese businesses would be protected from Zimbabwe’s plans to increase business ownership by black Zimbabweans.”

Mugabe’s rule has tragically turned Zimbabwe’s once bread basket and food exporting economy into a pathetic basket case with massive food shortages and until recently hyper inflation. In recent years, the country’s major export has been refugees, a few million who have fled to neighboring South Africa or to Britain, the former colonial power.

For Beijing, it’s a buyers market. Though the Mugabe regime remains widely ostracized in the West, its business partners in the PRC will provide political cover, at least for now.

John J. Metzler is a U.N. correspondent covering diplomatic and defense issues. He writes weekly for

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