Source: Chinese firms’ history of flouting Zim laws – NewsDay Zimbabwe March 28, 2018
English poet, William Blake, once said that it is easier to forgive an enemy than to forgive a friend.
By TATIRA ZWINOIRA
Blake’s expression has been brought to the fore after Zimbabwe, for the umpteenth time, was dribbled by an all-weather friend despite rolling out the red carpet.
The outing of Chinese firms on the looters list by authorities is another betrayal, since Harare looked East after breaking ranks with the West over human rights
violations and governance deficits.
Under cash or spurious transactions alone, 114 Chinese firms or individuals are listed as having externalised funds consuming 43,26% of the total $826 503 404 in total externalised funds.
Zimbabwe Congress of Trade Unions secretary general, Japhet Moyo, said a survey conducted on Chinese investments into the country found that they had a bad work ethic.
“We previously did a study on Chinese investment into southern Africa and Africa as a whole and found that the Chinese have a bad work ethic when doing business. These bad practices include not paying workers on time, underpaying workers or paying the workers way below minimum wage. We have even found that some of these Chinese businesses keep most of the money they earn and do not bank it,” Moyo said.
“We found that a lot of these businesses do not follow the law. We have tried reporting to the ministry of Labour, but they have not been helped as we have discovered most of the Chinese people or firms we were reporting had got political links. Government also seems to not want to deal with them, because as long as they build a bridge or power station, for them (government), they remain quiet.”
He said they had previously reported to the former ambassador of the Chinese embassy (Ambassador Lin Lin) about the issue, but he had brushed off the reports, stating that they needed more evidence, despite being provided with it.
Labour and Economic Development Research Institute of Zimbabwe director, Godfrey Kanyenze, said studies by his institution had shown Chinese were “ruthless” in doing business in Africa.
“It does not matter that they are listed, because they always behave like that. We did a study on the way the Chinese do business, you know they come and take…they are the most ruthless. My colleagues did a study on Chinese investment in Africa and they do not behave like the normal investors,” he said.
According to the looters list released last week, Chinese firms were accused of stashing away $357 585 448 in cash or spurious transactions.
Last year, our sister paper Standardbusiness uncovered some practices, where some of the Chinese businesses were dribbling tax authorities by issuing sales receipts written in their language (Mandarin) and without a value added tax number to avoid paying taxes.
A January snap survey showed a majority of Chinese businesses still do not accept plastic money. Further, Chinese retailers are believed to be not banking significant sums of their profits, channeling them rather to the parallel market or keeping them at home.
Chinese individuals or firms have already been fingered in blanket smuggling.
Last year, Zimbabwe Revenue Authority (Zimra) shut down a Chinese blanket manufacturing firm, Veleez, for circumventing duty and tax obligations through understating blankets at the border.
In an interview with NewsDay on Monday, Chinese embassy counsellor Zhao Baogang declined to answer questions around Chinese involvement in areas where they have previously been accused. These are blanket smuggling, failure to pay taxes, labour abuses and issuing non-Zimra compliant receipts to customers.
On the latest allegation of externalising, Baogang said they respected the law of the land.
“We have close relations with His Excellency Mnangagwa (President Emmerson Mnangagwa) and his government we understand his situation and the actions taken by the government. They want to get all the illicit financial flows, to stop it and get all the money illegally transferred to other countries and this will help improve or ease the liquidity crisis and development of the economy. We understand and respect the actions,” he said.
“When we come to the list, we see some Chinese people, I cannot say that they are the majority, but they are really a number of Chinese people and companies listed there. The first reaction is that we must do some investigations, so we convened a meeting with some Chinese nationals and firms here and we checked with them whether this was true or not, because as an embassy we wanted to make a judgement.”
He said they convened the meeting on Wednesday last week in order to get details and get to the truth.
“Many of them said that they were not consulted before this list was published. In some cases, they already submitted their documents to the commercial banks and the Reserve Bank which were still being processed, but suddenly they were listed there. They have done all those things through the local banks with the approval of the banks they did it, but suddenly they find that they were listed and they were a bit surprised,” Baogang said.
“We encouraged them to immediately to go to the banks, to clarify and that they could submit their documents because they felt they were innocent, to make clarifications to ensure that their names could be removed from the list to prove they are innocent.”
He said the Asian giant had previously supported the Zimbabwean economy such as power generation.
“We also have a Chinese firm that will be investing $1 billion into the revival of the Zisco steel industry the money could come to Zimbabwe. I can say that a lot of Chinese investors are coming,” Baogang said.
A 1998 agreement between Zimbabwe and China gives great leeway to the Asian country.
Article 4 of the agreement, stipulates that “neither contracting party shall expropriate, nationalise or take similar measures against investments of investors of the other contracting party in its territory, unless the following conditions are met; for public interest, under domestic legal procedure, without discrimination and against compensation”.
Article 8 of the agreement stipulates that “any dispute between the contracting parties concerning the interpretation or application of this agreement shall, as far as possible, be settled by consultation through diplomatic channels”.
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