Zim-China trade tops $1,1 billion

via Zim-China trade tops $1,1 billion – DailyNews Live by Roadwin Chirara and John Kachembere  24 FEBRUARY 2014

Trade between China and Zimbabwe grew to over $1,1 billion last year as the southern African country’s reliance on the emerging Asian giant grows.

Lin Lin, the Chinese ambassador to Zimbabwe, last week said business traffic between the two countries ballooned from $310 million in 2003 to $1,1 billion last year.

“According to statistics from the Chinese side, bilateral trade between China and Zimbabwe has reached $1,102 billion in 2013, up by 8,53 percent compared to the previous year, of which Zimbabwean export is worth $688 million and import is $414 million,” he said in an exclusive interview with the Daily News.

China has emerged as Zimbabwe’s closest international ally after Western countries imposed sanctions on President Robert Mugabe, a decade ago over alleged violations of democracy and human rights abuses.

Relations between the two countries deepened further after Zimbabwe adopted a “Look East Policy” in 2003, and since then, China has become a major source of imports as the southern African country’s economy recovered from a decade of contraction.

Trade volumes have largely been driven by China’s growing appetite for raw materials while Zimbabwe has mainly exported tobacco and precious minerals.

Although trade between the two countries has been increasing steadily over the years, it spiked around 2010 when the country started enjoying economic stability under the hybrid government of Zanu PF and the opposition Movement for Democratic Change.

Lin said the Chinese government has also provided support through donations to various initiatives in the country worth over $50 million since 2009.

In 2003, trade amounted to $197 million, $275 million in 2006, before quickening to $842 million in 2011 and $915 in 2012, breaching the billion-mark last year.

“Since 2009, bilateral trade between China and Zimbabwe has been on a fast track of development and trade volume has kept rising.

“I believe that in the next five years, with deepened cooperation between the two sides, the trade volume will continue to grow,” said Lin.

Despite the increase, Zimbabwe is ranked a distant 26 out of 58 of African traders with China.

Total Africa-China trade amounted to $198 billion with South Africa topping the list at $59 billion for 2012, more than half of the combined Sadc region figure of $107 billion.

“South Africa’s trade with China has been boosted by its membership in the BRICS group which comprises
Brazil, Russia, India, China and South Africa.

As a way of strengthening trade between the two countries, Zimbabwe in January announced the addition of the Chinese yuan, Indian rupee, Japanese yen, and Australian dollar to a cocktail of foreign currencies officially allowed to trade in the country.

The southern African country ditched its currency in 2009, after it had been rendered useless by hyperinflation which peaked at 231 million percent and began using a number of currencies including the United States dollar, the South African rand and the Botswana pula among others.

Zimbabwe faces a crippling liquidity crisis and allowing the new currencies to trade could be seen as a way of improving the country’s cash crisis.

Market experts, however, question the feasibility of the introduction of the Australian dollar and the Japanese yen.