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Business / Economy

Chinese firms plan SEZ in Zimbabwe

By Li Lianxing and Xie Chuanjiao (China Daily) Updated: 2015-07-11 09:56

Chinese firms plan SEZ in Zimbabwe

Zimbabwe vice-president Emmerson Mnangagwa visits Qingdao Hengshun Zhongsheng Group Co Ltd in Qingdao, Shandong province on July 9. Hengshun Zhongsheng is to work with other two companies to build a special economic zone and an industrial park in Zimbabwe. Jiang Yongliang / For China Daily

Chinese companies will join hands with the Zimbabwe government to build a special economic zone and an industrial park in Zimbabwe to further stimulate the country's economic development and transformation, according to Emmerson Mnangagwa, vice-president of Zimbabwe.

He said investors can enjoy several preferential policies in the special economic zone and can also put up industrial parks and factory shells to rent out to other companies.

Mnangagwa made the remarks at a signing ceremony for the project during a two-day visit to Qingdao, Shandong province, on Thursday and Friday. Qingdao is also the home of many giant industrial and home appliance manufacturers such as Haier Group and Hisense Group.

"The government and the people of Zimbabwe are ready to render all the necessary support to protect Chinese as well as all other foreign investments in the country," he said.

There are three major investors in this project, including Qingdao Hengshun Zhongsheng Group Co Ltd, China Railway Eryuan Engineering Group Co Ltd and Qingdao City Construction Investment Group.

It will be supported by the Qingdao government, the Ministry of Industry and Commerce of Zimbabwe and the China Development Corporation Ltd.

As the first party to the special economic zone project, Hengshun, a firm focusing on electric projects and equipment, said private companies can also play a crucial role in the "going global" strategy and the Belt and Road Initiative, by using its industrial advantages and overseas operation experience, said Jia Quanchen, chairman of Hengshun.

"We started investing in the overseas market in 2011 and now we have established a ferronickel industrial park in Indonesia. We have developed and accumulated our experience in industrial park investment, development, attracting business, and operation," he said.

"The signing of the agreement is a recognition of our industrial park mode. We also highly value Zimbabwe's advantages in resources, investment environment and development potential and we intend to copy our Indonesia model in a more sophisticated way in Africa," he said.

The industrial park will use power generation as core competence to build up all the infrastructure and then focus on processing industries such as mining and other manufacturing to increase the added value of local raw materials. This will establish a full industry chain and benefit both upstream and downstream business, said Jia.

This project is a key trial of the Belt and Road Initiative, under which both State-owned and private firms are investing in the foreign market. The industrial park will further accelerate the transfer of China's excess capacity, capital, technology and management, with a focus on railway construction, as well as power generation, metallurgic and agricultural equipment export, according to Jia.

Zimbabwe is located in southern Africa, endowed with abundant natural resources like diamond, platinum, gold, chrome and iron ore. In 2014, trade between the two nations reached $1.24 billion.

Mnangagwa said as an all-weather friend of China, Zimbabwe has been learning from China throughout history and this exchange will provide an essential window for Chinese businesses to enrich their understanding of the country.

The mining sector requires $5-6 billion in the next five years for capital to increase capacity to an average of 80 percent, thus the investment in this field are welcomed, he said, adding that joint ventures are critical avenues to supplement the nation's limited fiscal space and the government encourages joint ventures in various forms.

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