Foreign Direct lnvestment has become a backbone for mostAfrican countries because it has a considerable number of advantages thatinclude exponential economic development through technology and resource transfers,not only that, it also creates employment, increases productivity, promoteseasy international trade and capital among other reasons. With the realizationthat Foreign Direct investment brings a lot of economic developments, mostAfrican countries are working towards attracting more of CFDI in theircountries. Africa can benefit a lot from China’s FDI and this is confirmed byAsiedu (2004), who states that Sub-Saharan Africa (SSA) will reap more benefitsfrom FDI in terms of employment generation if human capital and infrastructureare upgraded. The author also argues that Africa should diversify itsinvestment opportunities so that more FDI is aimed at non-primary industries. Although CFDI has brought economic development to somecountries, various concerns have been raised by many scholars ever since theemergence of Chinese internationalization . China has been carefully scrutinizednot only by academics and business leaders but also by press professionals(Wang, 2010).
Their main concern is why and on what basis China wants to investin Africa. The few studies (Wu and Cheng, 2010;Yinand Vaschetto), 2011 haveraised a considerable number of benefits of CFDI in Africa. However , thenegative assertions made by various papers don’t carry much weight becauseaccording to Wang (2010), many of them come from research papers of a lowstandard and press articles from journalists.China has contributed a lot to the Zimbabwean economy throughinfrastructural development, road construction, building of the sports stadiumas well as the military schools, solar panel companies and investments inagriculture, not only has China’s Foreign Direct Investment brought capital forall these projects, it has also brought, employment and technology transferamong other factors as l have mentioned above.
But why are people skeptical aboutAfrica-China relations? One General reading literature advice shows that theinitial criticism often comes from North America and Europe; African writersseem to have quite different views on this topic. Kragelund (2008) writes that industrializedcountries (‘Western “) are concerned that they will lose their influencein Africa, and that China’s existence will postpone the development in Africa.Literature also shows that, Chinese enterprises in Africa are not only theresult of intentional or unintentional Chinese economic law The policy ofobtaining resources and markets is also the consequence of free AfricaInvestment laws and policies, some of which are strongly urged by Westerndonors In the past few decades, the so-called “Western retreat” (ibid.: 164-165) has also been promoted ” Chinese advance” (Isaac, 2010:165-169). The article by Kragelund (2008) and Isaak (2009) plus Brautigam(2009) is an eye opener, especially in their specific case seeking furtherunderstanding of how Chinese companies gain strength Fight in Africancountries. So, Brookes and Shinn wrote:”America and its allies … are finding that their vision of aprosperous Africa governed by democracies that respect human rights and therule of law and that embrace free markets is being challenged by the escalatingChinese influence in Africa. … China rewards its African friends withdiplomatic attention and financial and military assistance, exacerbatingexisting forced dislocations of populations and abetting massive human rightsabuses in troubled countries such as Sudan and Zimbabwe.
As a consequence,Chinese support for political and economic repression in Africa counters theliberalizing influences of Africa’s traditional European and American partners(Brookes & Shinn, 2006).”Foreign investors seek resources, markets, efficiency andstrategic assets in most developing countries like Zimbabwe. Companies seek investmentopportunities to solve problems such as raw materials and labor and physicalinfrastructure issues or to have good political relationships with othercountries as well as other reasons. According to Aisido (2002; Secuello, 2015) lowincome Southern African countries may not attract FDI, however this has been adifferent case for Zimbabwe when it comes to Chinese investments.As far as Zimbabwe is concerned, there is a lot of literatureabout mining companies Comply with local labor legislation, health and safetyregulations and competition laws (Chakanya & Muchichwa, 2009; The EvenTimes, 2012; Smith, 2012). There is also violation reported on environmentallaws. For example, in April 2012 or so A source reported that a Chinese companydid not follow the correct procedure The EIA and its proposed project have beenrejected (Financial Gazette, 2012).
There are also official reports explaining the cooperationbetween the Chinese Companies and military forces non-compliance with Legal Law(Dubosse, 2010, Isenman, 2005). But economically, there is economic developmentin Zimbabwe. In addition, Some Chinese investors respond to some reports sayingthat there is no negative impact on the economy (VOA 2012).Despite the uncertainties in Zimbabwe, China has nohesitation in developing economic and political relations with Zimbabwe. Infact, despite Zimbabwe’s refusal to allow European observers to participate inthe 2002 protesters’ election and cruel handling of people under EU and U.S.sanctions, China has invested in about 128 projects in the country from 2000 to2012. Zimbabwe has attracted more than $ 600 million in foreign directinvestment in 2013.
In addition, China is Zimbabwe’s largest trading partner in2015 and has purchased about 27.8% of its exports. Chinese companies alsoactively participate in contractor services in the telecom, construction,irrigation and energy sectorsChina’s relationship with Zimbabwe dates back from the war ofliberation.
ZANU-PF leader, ZANU, has won China’s financial and militarysupport against Soviet republics supported by the Soviet Union. Afterindependence, China continued to support the Zimbabwean government to createnational hospitals and power stations and to provide 35 percent Zimbabweanswith the much needed resources in various sectors of the economy from 1980 to1999. In 2012, China donated $ 150 million towards food for the Zimbabweanpopulation. China also promised to give 46million U.S. dollars to establish anew Zimbabwean parliament. In December 2015, Zimbabwean Foreign Minister Xi Jincalled Zimbabwe’s all “climate” friends and promised billions ofdollars to energy projects and bases, including $ 1 billion in the largestsponsorship of Zimbabwe’s farming.
It is noteworthy that China has alwaysenjoyed the political and economic relations of Zimbabwe. enormous politicalrisk. For example, the sudden enforcement of the indigenization law in March2016 endangered the interests of all foreign investors, China in particular.Passed in 2008, the indigenization law stipulates that all “foreign andwhite-owned companies with assets of more than $500,000 should cede or sell a51-percent stake to black nationals or the country’s National EconomicEmpowerment Board.
” Due to complaints from foreign investors and the Zimbabweanneed to attract foreign investments, the law was never seriously enforced. Butin March 2016, the Ministry of Youth, Indigenization, and Economic Empowermentannounced that the government had decided to implement the law and requiredforeign companies to submit their stake transfer plans by April 1 or face therisk of closure. A month ago, the Zimbabwean government already closed diamondmining companies owned by Chinese (Anjin and Jinan), Russians, South Africans,and Emiratis, as an effort to enforce the indigenization law. Some argue that the economic downturn, the result ofdecreasing commodity prices in the last few years, led Zimbabwe to strengthenthe indigenization law. As the eighth largest diamond-producing country,Zimbabwe enjoyed a tax income from diamond exports as high as $84 million in2014. However, that number nosedived to $23 million in 2015, which may havetriggered the government to take over foreign mining businesses.
Others havesuggested that the mounting factional war within Zanu-PF may be the culprit ofthe sudden indigenization move. Patrick Zhuwao, the indigenization minister andnephew of Mugabe, is part of Grace Mugabe’s Generation 40 or G40 faction, whichmay be interested in channeling the localized businesses and profits tobuttress the faction and Mugabe himself. In contrast, the finance minister,Patrick Chinamasa, who is associated with Vice President Mnangagwa’s faction,tried to assure the foreign-owned financial institutions in Zimbabwe that theywere compliant and would not face censure.On the other hand, we can also take note of China’s need toexplore africa’s resources because of the need for raw materials in Asianmarkets. However, according to Carmody and Owusu the Chinese model ofdevelopment that is currently on offer is based on sophisticated technologywhich is appropriate to African countries. This model allows African countriesto access the new technology at an affordable price and may result in thedomestic market improving greatly to a level where they can competeinternationally. This model is a way of increasing economic growth.