In parts of Harare, as elsewhere, a deep fear of the rising Chinese

Jan 31, 2012

The intricacies of currency are of little interest to most people. Hyperinflation changed much of this for Zimbabweans. Fear of the very idea of a local currency runs deep, and for now, many people are comforted by the country’s use of various foreign currencies, including the US dollar and South African Rand. With the growing economic role of China in Zimbabwe and the world in general, a surprisingly contentious debate about adding the Yuan to the currencies used has arisen. The article ‘To Yuan or Not to Yuan, That Is the Question’ represents a particularly irrational take on the subject.

‘From downtown shops that stock cheap clothing and shoes that fall apart after one wear, to mining concessions in platinum, gold and diamonds - the Chinese finger is now in virtually every Zimbabwean pie,’ the Inter Press Service article begins.

The ‘Chinese finger’ is now in virtually every world pie, not just in Zimbabwe.

‘If some senior government bureaucrats have their way, the country could soon find itself adopting the Chinese Yuan as its official currency. For some influential monetary policy czars, the massive assailing of the Zimbabwean economy by the Chinese now only requires the Yuan to strengthen these economic reconstruction efforts. Late last year, Reserve Bank governor Gideon Gono, seen by many as a close ally of Mugabe, announced he was in favor of having the Chinese Yuan as the country's official currency.’

This is a breathtaking falsehood to appear on a reputable news/analysis outlet like IPS.

Gono did NOT advocate for the Yuan to become Zimbabwe’s ‘official currency.’ He proposed that it should be considered as the country’s reserve currency instead of the US dollar. That is quite different from being the ‘official currency’ in terms of day to day use. Even the reserve currency idea is controversial and was shot down by most people who chose to comment on the issue. But it is an argument that is going to be more frequently heard around the world as China continues its astonishing economic rise.

Others have made the milder suggestion that the Yuan be adopted as part of the mix of foreign currencies currently in use, with or without a new local currency as well. There are varying views on this as well, but the IPS article is particularly disturbing for its blatant misstatement of the public discussions on the Yuan.

One thing the author of the article does do very well is to present the deep anti-China prejudice in many people, in Zimbabwe as well as in many African countries and beyond. The size, force and suddenness of the Chinese presence have unsettled many people.

He writes that the Chinese were ‘invited by President Robert Mugabe as part of his infamous 2004 "Look East" policy to participate in driving the economy and employment
creation, after relations with former traditional investment partners the European Union and United States soured.
Was/is Mugabe’s ‘Look East’ policy ‘infamous?’ According to whom?

As for Mugabe having ‘invited’ the Chinese, the Chinese have a strong presence in many African countries without a specific pro-China policy. The Chinese can be said to be everywhere they are in Africa by being ‘invited’ by the governments, even though many ordinary people have very mixed feelings about it.

But more importantly, a rising China is simply an unavoidable global phenomenon that no country has the choice to ignore. The choice is not really whether to have dealings with China or not, but simply the nature of those dealings, and even then, economic imperatives speak louder than ‘choice.’

The author writes of the ‘the massive assailing of the Zimbabwean economy by the Chinese.’ He makes it abundantly clearly he considers the Chinese a sinister force, and he would have no trouble finding many people who shares that view. However, if the Chinese are ‘assailing the Zimbabwean economy,’ they can be said to be doing the same to the Zambian economy, the Gabonese economy and countless others where they have a strong presence. How fair and objective is to talk of their ‘assailing’ these economies? They are not forcing their way into these countries, nor are they forcing the consumers who express such antipathy towards them to buy the ‘cheap clothing and shoes that fall apart after one wear.’

In mentioning Mugabe’s poor relations with the West, the author explains that as the reason for the strong Chinese presence in Zimbabwe. But that is only partly true. The Chinese presence in neighboring Zambia, which has excellent relations with Western countries, is just as strong, and received with just as mixed feelings as in Zimbabwe.

The fact of the matter is that many of the sectors the Chinese have established themselves in are areas where Western countries have no interest. In Zambia, the Chinese ‘assailed’ and revived the country’s key copper industry after Western companies had pulled out, citing the sector as unviable. With the totally different investing orientation of the Chinese, they were able to make that industry viable. It is for reasons like this that the Chinese are dominant in so many sectors, whether the country has good relations with the West or not, and whether the country has an ‘infamous Look East’ policy or not.     

We are told about how the Chinese are ‘unpopular with Zimbabwe's industrial and
commercial players, and general members of the public who accuse the Chinese of poor labor practices and shoddy goods and services.’

There are probably relatively few places where the Chinese can be said to be ‘popular.’ Almost everywhere in the world, and in almost any sector they are involved in, the Chinese are able to out-compete all comers, for all kinds of reasons. That quality which makes them so powerful and dominant also understandably also contributes to their being seen as a huge threat. This is an issue that ‘industrial and commercial players’ in rich industrialized countries are struggling with as much those in poor, low productivity countries like Zambia and Zimbabwe.  

Indeed, ‘poor labor practices and shoddy goods and services.’ are frequently heard complaints about the Chinese everywhere, not just in Zimbabwe. Despite its staggering economic development, China is a repressive country where many of the ‘rights’ taken for granted in a differently repressive country like Zimbabwe do not exist, or are poorly respected. With the balance of investing power hugely in their favor, the Chinese bring their workplace culture to countries like Zimbabwe more than they adhere to domestic  laws.

Ironically, the mix of political repression and economic dynamism is precisely part of what gives the Chinese such a huge advantage everywhere they are. Worker rights and safety issues are downplayed, saving time and costs, allowing even more undercutting of the competition. All these things will improve in China, whether or not the improvement is also transferred to business practices in the country’s poor investment destinations, like Zimbabwe.

A country like Zimbabwe, on the other hand, has a relatively highly developed sense of work safety and worker rights, but a productivity that is a small fraction of that of China. This presents a built in workplace cultural clash. To the Zimbabweans the Chinese employers are unfeeling slave drivers; to the Chinese the Zimbabweans are demanding but lazy workers. The Chinese are involved in similar cultural workplace clashes in many other countries where their whole orientation to life, business and work is largely at odds with those of more laid back cultures. The Chinese are highly motivated, disciplined and in a hurry in a way very few other cultures presently are. All those are part of their formidable advantages, but also part of why they are so widely feared and resented.

The author of the awful IPS article does not bother to interrogate any of these issues, and is content to just spew the popular anti-Chinese fear and prejudice. He vents his emotions, but he does not particularly inform or educate.   

The opinions of two economists are sought out. Unfortunately, they are asked to comment on the false claim that there is a suggestion from anybody for Zimbabwe to ‘adopt the Chinese Yuan as its official currency.’ This renders what might have been their otherwise interesting perspectives on the irrelevant. Both point out why it is not presently practical for Zimbabwe to adopt the Yuan as the country’s official currency, which no one has done.

In Zimbabwe as in most of the world, the effect the rise of the Chinese will have on many aspects of life is a huge talking point. It is a subject that will not soon go away and deserves attention and serious discussion. It is shocking and regrettable that the IPS article serves this serious matter so poorly and prejudicially.


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