Editor's Comment

Will China prove to be friend indeed?

ZAMBIA enjoys bilateral relations with so many countries, but for some countries the ties are of much more vital importance and have been so for decades.
One such country is China, whose strategic bilateral relation with Zambia dates back to when Zambia attained its political independence in 1964.
Zambia’s relations with China has built on win-win cooperation but the Asian tiger has developed exponentially and has become a role model for many countries that aspire to get out of their respective economic quagmires.
Today, China is a global economic powerhouse, having the muscle to influence world trade more than any other country, probably even the world’s leading economy, the United States.
As economist Chibamba Kanyama says, even the US is fully aware of the resurgence of the Chinese economy.
“Let’s admit it, China is a developed country that launched itself economically in the 1970s. Remember that as at 1971, China had no millionaire entrepreneurs; today, it has more than six million entrepreneurs and this is not a number of inconsequential impact,” Mr Kanyama says.
Today, private enterprise in China accounts for well over half of the industrial output and controls over 70 percent of gross domestic product.
Since China embarked on economic reforms supporting private enterprise, the economy has grown on average eight percent per annum leading to a positive growth in GDP.
“The impact has been that the emerging middle class in the mid ’90s has grown to nearly 900 million to date, and if this group alone had to consume our products such as leather, honey, textiles, wood products, fabricated metals, handcrafts and even our own farm produce, it would have tremendous impact on our foreign exchange earnings and GDP,” Mr Kanyama says.
China has thus emerged as the leading investor into Africa, particularly in the resource sector. Today, China has gone into all forms of manufacturing and infrastructure investments.
This is evident in Zambia, too, through companies like the Aviation Industry Corporation of China (AVIC), Sino Hydro Corporation, China Jiangxi International, China Henan Cooperation and China Sichuan.
The relationship should therefore be seen or is not one that is only about China getting raw materials out of Zambia, but also one that is getting Zambia to build its own industrial base.
As China increases its presence in Zambia through various projects, it is expected that there should be transfer of technology and skills from the Chinese to Zambians to ensure sustainability in the various sectors of the economy.
Why, for instance, should Zambians be able to run their own cement factory given the many decades of production of the material?
Key to this success of technology and skills transfer is ownership. Joint ventures provide a better model for this transfer and also enhances the reinvestment of returns within the Zambian economy.
With ZCCM-IH, for instance, getting shares in some of the foreign companies, Zambia is improving its hold on the resources and skills to eventually take more control and management of more major entities.
The private sector players, too, should develop strong business partnerships with Chinese entities. As things stand today, the Chinese investors are not sufficiently assimilated with the Zambian entrepreneurs.
They have their own local chamber of commerce and this is not healthy for skills transfer and national goodwill.
Chinese investments should go beyond the partnerships with Government or the public private partnerships to indigenous private businesses.
Zambian businesses going to China should effectively market their knowhow and negotiate for much more beneficial partnerships to enhance or improve the win-win partnership.
Zambian business entities should, however, constantly note that to succeed in having better deals with their Chinese counterparts, they need to prove that what they offer is worthwhile.
The Chinese have not grown their economy through appeasement. They have done so through shrewd business and sustainable deals underscored by hard work.
Where others have been seeing challenges, they have been seeing opportunities, which they have gladly taken around the world. This is a strength that Zambians should collectively acquire instead of constantly being in self-pity.
For instance, while Zambians are wallowing in self-pity about tomatoes and seasonal fruits rotting for lack of a market, the Chinese have probably already seen an opportunity to make money through value-addition using the cheap major raw material.
Zambia should also be doing more to diversify its economy from it being mineral-driven to other sectors like tourism and agriculture.
Admittedly, China is a huge country with numerous tourism sites which attract millions of its local tourists, but Zambia’s tourism sites are unique and deserving of more visitors, including those from China.
Given that China has a huge emerging middleclass, it is a realistic thought to expect a higher number of tourists from China. With Zambia set to launch its own airline, in conjunction with Ethiopian Airways, which has flights into Beijing, getting the Chinese to the Mosi-oa-Tunya Falls and other attractions is attainable.
And so it is expected that next week’s visit to China by President Lungu, accompanied by public and private sector players, will yield deals that will prove yet again that China is a friend indeed.

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