Editor's Comment

Chinese investment resentment can hinder FDI inflows

LUBINDA Habazoka.

RESENTMENT of Chinese investment will affect the country’s foreign direct investment (FDI), the Economics Association of Zambia (EAZ) has warned.
EAZ president Lubinda Haabazoka is concerned that the inflow of FDI may reduce because investors from other countries may fear that one day they will also fall victim.
The warning by EAZ is not only valid but is also timely and all progressive Zambians must take heed.
We have observed with absolute disappointment that some people with hidden interests have risen against Chinese investors claiming that they are taking over businesses in Zambia.
These unpatriotic individuals are planting seeds of resentment and xenophobia in the minds of Zambians by spreading falsehoods.
On Monday, some Kitwe residents took to the streets to riot after being fed with lies that the Zambia Forestry and Forest Industries had been sold to the Chinese.
A few months ago, Zambia made headlines in international media after some unpatriotic Zambians fabricated other lies that three State-owned enterprises – Zesco, Zambia National Broadcasting Corporation (ZNBC) and Zambia Airports Corporation had been taken over by the Chinese.
This is against the fact that State-owned enterprises like ZNBC are established by Acts of Parliament and no ownership decision can be made without the involvement of the August House, which comprises representation from both ruling and opposition political parties.
While it is acknowledged that there may be a few deviant Chinese investors – which is normal in every society – the truth is that there are many more credible ones who mean well for the country.
As a country it would be unwise to reject Chinese investment on account of a few bad eggs.
It is not only naïve but unfair to place a blanket negative perception on all Chinese investments.
It is indisputable that there are so many Chinese investments across all sectors adding value to the country.
If China today withdrew all its investments from the country, it is Zambia that stands to lose out.
As a developing country that is working towards attaining the middle-income status, there is need to embrace all cooperating partners with potential to help accelerate the country’s development.
And China is certainly one partner we cannot afford to ignore.
It is common knowledge that China is one of the main drivers of the global economy and it would be folly for some covetous Zambians to demonise Chinese investment when all countries in the world have embraced it.
It is an established fact that China is the world’s emerging economic giant.
According to the United Nations Conference on Trade and Development (UNCTAD) 2017 report, China is now the second largest source of foreign direct investment (FDI) after the United States (US).
The report further indicates that the US is the largest recipient of FDIs, attracting US$391 billion inflows, followed by Britain with US$254 billion.
If economic giants like the US and Britain still welcome FDIs, how about a country like Zambia, with a long way to go in its development journey?
It is indisputable that in Zambia, domestic investment plays a limited role in financing the diversification and development agenda.
FDI is, therefore, essential to financing infrastructure and large-scale modernisation required for a successful diversification and development strategy.
During the 3rd edition of the Forum on China-Africa Cooperation (FOCAC) summit about two months ago, China pledged US$60 billion support to Africa over the next three years.
The money is expected to support projects under 80 initiatives which include industrialisation, infrastructure development, trade facilitation and health care.
Instead of wasting time witch-hunting Chinese investors, Zambians will do well to strategise on how to get a lion’s share from the US$60 billion earmarked for Africa.
Zambia should ride on its position as the third largest recipient of Chinese investment at 13.2 percent to benefit more.
Currently, Algeria is the largest recipient at 20 percent followed by South Africa at 18.4 percent.
Zambia’s third ranking among African recipients of Chinese FDIs is an indicator that it is a good investment destination.
We should, therefore, not allow a few disgruntled individuals with selfish interests to tarnish the country’s image as a good investment destination.
As rightly noted by Dr Haabazoka, any resentment towards Chinese investors has potential to scare away investors of other origins as well.
Given the limitation in resources and expertise like many other developing countries, Zambians cannot afford to scare away investors.
Acts of resentment against Chinese investors should not therefore be entertained even in the slightest way because they have potential to plunge the country into economic chaos.
Those perpetrating such acts are enemies of progress and deserve to be alienated from the rest of society.
The law enforcers should be vigilant and bring anyone found wanting to book.

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