China buys up Africa .....

When Mugabe took power in Zimbabwe the Zim dollar was trading at about the value of the US dollar. By 2000, just before the farm invasions began, the Zim dollar was trading at Z$55.00 to US$1.00. It was then a net exporter of food - the "breadbasket of southern Africa". At independence Air Zimbabwe had 18 planes, they now have six. When the geriatric but nonethe less still sprightly Mugabe flew to China the Boeing 767 plane, which he normally uses on his international trips, should have been grounded because it is due for a service. Forex problems prevented them from buying parts to perform the service. As a result a plane was sought in Thailand – on top of this fuel shortages have played havoc with Air Zim flights since last week to London, China and Dubai.

A week ago the Zim dollar was trading at about Z$25,000 to US$1 on the parallel (black) market where many manufacturers source foreign currency to fund imports. On Thursday it had touched Z$45,000 to US$1. The rand was selling at Z$6,000 but buyers were paying Z$7,000. The official exchange rate was set last week at Z$17,000 to US$1, a 40% devaluation. Zimbabwe needs a minimum of about 30 million litres of fuel a month for basic needs. This week, the beginning of an 11 million litre consignment of fuel from Sasol bought by the government is due to start moving across the border, barely enough for the government's needs.

Meanwhile traipsing round China on a six day visit, hoping for help in repaying a $300m debt to the IMF, proved fruitless for Mugabe as Beijing granted him only $6m for grain imports.

Failure to pay the outstanding loan would could result in Zimbabwe facing expulsion from the IMF.

China has long had interests in Zimbabawe and have invested in many areas and is Harare’s biggest inward investor. It has helped to construct the Harare stadium, hospitals, dams, schools, wells, clothing factories, and in the reconstruction of the Iron and Steel Corporation. China’s International Water and Electric company is contracted to farm 250,000 acres of agricultural land and are paid in return for, it is rumoured, in tobacco. (The Chinese smoke more tobacco per head than any other country).

China has offered credit lines to Zimbabwe’s small and medium enterprises, usually cronies of Mugabe, they also finance and provide mining equipment to Zimbabwe’s Electricity Supply Authority and Hwange Colliery, in return for which China has coal and coke concessions. Militarily, China has provided Zimbabwe with six K8 jet aircraft, a radar system for Mugabe’s personal residence and other military hardware estimated to cost around US$240m.

Rumour in Harare says the concessions made by Mugabe on this trip to China for platinum reserves are not a sufficient incentive for China to grant funds on the scale requested by Mr Mugabe. Mr Jintao plays hard ball. China is currently the leading consumer of the “white gold”, using almost 20% of world production a critical component in exhaust catalysers and many chemical / industrial processes.

The Chinese have also shown interest in setting up a smelter in Zimbabwe to refine the mineral. The final processing of platinum is done in South Africa. Financial benefits are are long way off for the Chinese however.

The Chinese were quick last Wednesday however to offer help by trying to block UN Secretary-General Kofi Annan's envoy Anna Tibaijuka, who spent 2 weeks in Zimbabwe investigated the demolitions, ( Operation Murambatsvina (Drive Out Rubbish) resulting in some 700,000 homeless in Harare and surrounding areas), from appearing before the Security Council to discuss her report.

China, supported by Russia and , Algeria, Benin and Tanzania voted against, while Brazil abstained, lost the motion and Tibaijuka duly appeared to explain her report and take questions from the floor in a closed door session.

We are seeing, quietly, that without fanfare, without military conquest, China has been moving into Africa. Africa has relatively untapped reserves, of fossil fuels and minerals. Targets have been Sudan, Nigeria, and Angola to date . China needs oil, and has been getting it. Sudan supplies 5% of China’s oil imports. Nigeria not only has oil, it is also a mass market in a country where manufacturing is undeveloped and provides a mass market for cheap Chinese consumer goods.

In just three years, from 2001 to 2004, China's trade with Africa has more than doubled from $US10 billion to $US 20 billion.

Unexpected help has arrived from the Middle East. The Iranian Ambassador to Zimbabwe Hamid Moayyer was quoted as saying that "the Republic of Iran continues to work with the Zimbabwean government to avail more lines of credit which are crucial for business growth”, when agreeing a £25Mn trade backed loan."In 1999, trade figures stood at 13 million US dollars and this has since risen to 25 million US dollars presently and we envisage that this will soar to about 1.5 billion US dollars by 2010," the Iranian ambassador said, presumably with his tongue very firmly in his cheek.

The Zimbabwe Protest Vigil, outside the Zimbabwe Embassy, London, takes place every Saturday from 14.00 to 18.00 to protest against gross violations of human rights by the current regime in Zimbabwe. The Vigil will continue until internationally-monitored, free and fair elections are held in Zimbabwe.