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Minister Chinamasa

Golden Sibanda Senior Business Reporter
ZIMBABWE cannot afford to ignore the need to deepen economic and trade relations with China, the world’s biggest economy and consumer of most of its primary exports, Finance Minister Patrick Chinamasa has said.

Minister Chinamasa made the remarks during a post budget breakfast meeting last week, pointing out that the entire world is looking East, so, “little Zimbabwe” cannot afford to overlook China’s economic importance.

The minister said the global frenzy regarding trade with China was in recognition of the country’s position in the global economy following its impressive growth over 30 years when it grew consecutively by over 10 percent. The Asian economic giant, with gross domestic product of over $10 trillion, is now the world’s second biggest economy after the US at $17,3 trillion.

Minister Chinamasa said China is the biggest consumer of most primary commodities that Zimbabwe produces, hence the need to build strong ties, but pointed out that value adding the primary exports was critical to cushion the country from price instability.

The decline in global commodity prices as a result of falling demand due to a slowdown in the Chinese economy, the minister said, is a blessing in disguise in that it compels Zimbabwe to add value to its primary exports.

Already, trade between Zimbabwe and China has surpassed the $1,2 billion mark, according to statistics from the Chinese Embassy in Harare while the Asian economic giant is ratcheting up investment in Zimbabwe, including mega investments to ramp up capacity in power generation .

“The importance of China in the global economy cannot be underestimated. In fact, if you do so you are not in the business. Everybody is looking East and East is China. This involves not just little Zimbabwe, but also the Western world; they are doing a bee line visit to China. That has implied consumption, primarily of commodities, so China is a key consumer of commodities; I am talking here about our minerals nickel, platinum, diamonds, everything you name it. But the point which I highlighted in my budget is that because of the declining commodity prices globally, we are now vulnerable to that decline,” the minister said.

“Zimbabwe is a major exporter of raw minerals. So the lesson we must get from that is we must expedite the process of value addition and beneficiation so that we break rank with those countries, which are primary producers and exporters of primary goods, that is key,” he added.

Minister Chinamasa said to that end, Government would put more effort towards ensuring that the country realises optimum returns from its abundant key primary products including gold, diamonds, platinum and tobacco.

In terms of diamonds, Reserve Bank of Zimbabwe unit, Aurex, is already cutting and polishing diamonds following Government directive that all gems be cleaned before export to enhance its shininess and ultimately price.

With respect to platinum, the minister said a road map has been agreed on the basis of which the producers will progress from exporting concentrates to base metals and ultimately export of refined platinum group metals.

“Concentrates, which most of them have been doing gives them 25 percent purity. The next level is that they can do 50 and then 75 percent. I told them that I am keen for them to get to 75 percent,” the minister said.

“So on platinum, we are okay, on diamonds we are on course and on gold, especially in terms of our policy since the time I became substantive minister we have insisted on refining gold at Fidelity Printers and that is now already being done. We are going to go the extra mile to get to jewellery; that is the extra mile,” Finance Minister added.