A senior Zimbabwean official said on Wednesday that the southern African country, which is reforming its economy to reduce foreign control, was eager to strengthen ties with China to benefit from the Asian giant's better trade and investment terms.
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The Zimbabwean government was shifting focus in its relationship with China from politics to economic cooperation, having cemented the former firmly since independence from Britain in 1980, Industry and International Trade Minister Obert Mpofu told Xinhua in an exclusive interview.

"We have all-weather relations with China, both at the economic and political level, but it has become more imperative now for us to grow our economic ties for mutual benefit. This is particularly so given that we are reforming our economy, and China is doing the same," he said.

He said the two countries had in recent years signed a series of protocols to enhance economic cooperation, in areas of infrastructure development, tourism, trade and investment.

This had paved the way for the Chinese government and private companies to explore more economic opportunities in this Southern African country in various sectors, Mpofu said.

"We have opened up the whole economic spectrum between the two countries, and each is going into areas where it has strength. In the case of China, this is almost in every sector of the economy and this is mutually beneficial for the two countries," he said.

He highlighted huge Chinese investment in tobacco production and processing, and the agriculture industry as a whole where last week the central bank announced a US$200 million capital injection from China in farming, manufacturing and mining.

Tobacco is among Zimbabwe's top exports, and China has become the largest importer of the commodity from the country. But Mpofu said China had now moved beyond just importing Zimbabwean tobacco, and had gone into the crop's production and processing.

He said a huge Chinese investment, running into millions of US dollars, was on the cards in tobacco processing, but could not give further details as sensitive discussions on the project were still pending. In tobacco production, Mpofu said Chinese investors had moved into out-grower schemes with local farmers, providing critical financing to boost the crop's output, which has been falling in recent years.

"We have a project proposal that has been brought up by Chinese investors to process tobacco into cigarettes and export this as a finished product. This (value-addition) is what the government encourages very much and we are very supportive of such ventures," he said.

He also spoke of other Chinese investment projects on the cards in steel-making, tractor assembly and mining, saying these would bring in large amounts of foreign currency into the country.

A recent visit to China by Vice President Joyce Mujuru secured US$1.3 billion potential investment in power generation and mining.

Mpofu said in view of rising Chinese investment interest in Zimbabwe, the local government was working on measures to ease customs and immigration formalities to facilitate the flow of capital from the Asian country.

"We are working on measures to facilitate investment flows into Zimbabwe, especially from China and other developing countries. We are essentially doing away with a lot of the red tape that was in place to give investors convenience and confidence in us," he said.

In infrastructure development, he said Chinese companies were active in the construction of roads, hospitals and other projects, and the firms were generally price-competitive even compared to local ones in some instances.

Mpofu, who has recently been to China, highlighted existing Chinese investments, particularly the huge cement factory in Gweru which has gone a long way in meeting national demand for the commodity. The project is a joint venture between Chinese investors and a local company, and has ensured Zimbabwe no longer imports cement.

He said China offered better trade and investment terms, compared to other foreign nations, and this was the main attraction for Zimbabwe, in addition to Beijing's friendliness to Harare.

In most cases, Chinese investment was in the form of joint ventures, something Mpofu said the government preferred because it ensured mutual benefits. Investors from the developed countries often insisted on outright ownership.

(Xinhua News Agency September 29, 2006)