China must be cool-minded over trading partners

By Mei Xinyu Source:Global Times Published: 2017/11/16 16:38:39

Illustration: Peter C. Espina/GT

Overnight, the news about a "military coup" in Zimbabwe spread across the Internet and media. The BBC reported that President Robert Mugabe had been detained in a bloodless transition, citing Zimbabwe's ruling party twitter account. Although Zimbabwe's Ambassador to South Africa Isaac Moyo denied there had been a coup and dismissed the claims as social media rumors, the military released a statement via television, claiming that criminals around the president had damaged the public interests and economy of Zimbabwe.

It comes amid uncertainty over the past three years, during the transition of power from 93-year-old Mugabe. Widely favored presidential successor, former vice president Emmerson Mnangagwa, was dismissed on November 6 by Mugabe, who reportedly wanted his wife Grace to take over instead.

It also follows deterioration of the country's national economy. Land reform has affected its agricultural sector and shaken the foundations of the economy.

At one time, Zimbabwe's economic development level ranked second in southern Africa, behind only South Africa. However, starting in March 2000, the Zimbabwean government implemented "Fast Track Land Reform," expropriating land from white people and giving it to landless peasants. This exacerbated social conflicts and triggered an economic downturn. A large number of white farmers fled and withdrew their capital from the country, and the normal order of agricultural production was interrupted. This then dragged down almost all other economic sectors in Zimbabwe.

Coupled with the resulting international sanctions, hyperinflation set in. At the end of January 2013, only $217 was left in the Zimbabwean government public account.

Another reason for the current situation is that in African countries that were colonized by the West, such as Zimbabwe and South Africa, a large proportion of their agricultural output has always been sold in international markets, putting these countries at the mercy of global systems and prices.

Also, in Zimbabwe, white farm owners operated independently for many consecutive generations, thereby gaining sufficient technological knowhow and management skills, as well as control of both domestic and global sales networks. The black farmers were essentially employees who followed the white farm owners' directions regarding what to plant and how to sell it. The vast majority of them did not acquire comprehensive knowledge or the skills required for running the farms or establishing sales networks. In this context, the rash attempt to implement radical land reform policies tore apart efficient farms and resulted in massive damage to agricultural production.

In Asia, particularly in East Asian countries and regions like China, small farming households have long been the mainstay of agricultural production. Most of the time, landlords rented their plots to tenants who needed to provide all other means of production. So all the relevant knowledge and skills were in the hands of the tenants rather than the landlords. Furthermore, the proportion of agricultural output for domestic markets in these countries was much higher than in African former colonies, which meant the farmers were not at the mercy of global markets. Therefore, land reforms in Asia for the most part haven't caused confusion, but have instead served as a stimulus for development.

The lessons from Zimbabwe's current situation in its populist land reforms were not learned by the country, or by an array of other African countries. Radical populist economic policies are not a rarity among China's trading partners. While China continues down the path of not intervening in these countries' internal affairs, it needs to stay objective and cool-minded amid its efforts to examine and evaluate the macroeconomic situation, social stability and market potential in these countries.

The author is a research fellow with the Chinese Academy of International Trade and Economic Cooperation.

Posted in: INSIDER'S EYE

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