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Mugabe Meets Xi Seeking China Aid After Shun by Obama

Zimbabwean President Robert Mugabe
Leader of Zimbabwe for 34 years, Robert Mugabe’s seizure of land owned by white farmers and a series of elections marred by violence and irregularities have made him a pariah to governments in the Western world. Photographer: Alexander Joe/AFP via Getty Images

Aug. 25 (Bloomberg) -- Zimbabwe President Robert Mugabe met his counterpart Xi Jinping in China today, weeks after he was snubbed by U.S. President Barack Obama at a summit of African leaders he hosted in Washington.

Mugabe, 90, was welcomed with an honor guard outside the Great Hall of the People, receiving a 21-gun salute. He was then serenaded by three women playing traditional Chinese instruments before heading into closed-door meetings with Xi.

Leader of Zimbabwe for 34 years, Mugabe’s seizure of land owned by white farmers and a series of elections marred by violence and irregularities have made him a pariah to governments in the Western world. His country’s ability to borrow from global institutions has also been undercut. Yet China has long maintained close economic and diplomatic links, with Vice Premier Wang Yang making a two-day official visit to the country in May 2013.

“Mugabe’s trip to China is to seek a last financial lifeline for his regime,” said Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets. With China reforming its state-owned sector, Mugabe’s party would be “naive to assume that Chinese capital is as easy to get as it has been in previous years.”

Mugabe is seeking a $4 billion rescue package to stabilize his country’s faltering economy, the Zimbabwe Independent reported on Aug. 1, citing sources it didn’t identify. Finance Minister Patrick Chinamasa visited China in January and was told to come up with a plan, it said.

The two nations signed a framework agreement on China making government interest-subsidized concessional loans to Zimbabwe, according to a pool report citing the official announcement at the signing. The amount wasn’t disclosed.

Recession Risk

Zimbabwe’s economy is threatened with recession as factories shut, consumer spending slumps and deflation takes hold. Economic growth, which averaged 10 percent between 2009 and 2012, is forecast at 3.1 percent this year, according to the International Monetary Fund.

Mugabe, who is subject to U.S. sanctions, was one of four African leaders not invited by Obama to the Africa summit earlier this month. The others were Sudanese President Umar al-Bashir, who is wanted by the International Criminal Court for war crimes, and leaders from Eritrea and Central African Republic. In April, Zimbabwe boycotted a European Union-Africa summit after Mugabe’s wife, Grace, was denied a visa to enter Brussels.

Still, Mugabe won an endorsement from his fellow Southern African leaders this month when he was named head of the 15-nation SADC, the main political bloc in the region. Mugabe will “discuss infrastructural projects” with China that “add value” to regional products, Mugabe said last week at the end of the group’s annual summit in Zimbabwe’s resort town of Victoria Falls. He is also in line to lead the 54-nation African Union from 2015.

Mugabe’s Influence

“Since countries in the region and the regional organizations endorse Mugabe and his legitimacy, China certainly does not stand alone or feel vulnerable,” Yun Sun, a fellow with the East Asia Program at the Washington-based Stimson Center, said in an e-mail. China has long viewed Mugabe as an African liberation leader for his role in Zimbabwe’s independence and supporting Western-style democracy in Africa is not a goal for China, she said.

Mugabe’s chairmanship of SADC means he has great influence over the agendas of regional organizations, which China would like to participate in as much as possible, she said.

“Mugabe is a good friend of China,” said He Wenping, director of the African Research Section at the Chinese Academy of Social Sciences, who visited Zimbabwe in May. “In Zimbabwe they are talking about a ‘Looking East’ policy. They’re not only looking for money, they’re also looking for development experiences and for friends.”

Platinum Reserves

Zimbabwe has the world’s biggest reserves of platinum after neighboring South Africa. China Power Investment Corp. may buy a Rio Tinto Plc coal mine in Zimbabwe and build a thermal generator that would double the power-starved country’s capacity, Chinamasa said in March.

Trade between the two nations has more than doubled to $1.1 billion between 2010 and 2013, China’s ambassador to Zimbabwe, Lin Lin, said in an editorial published on Aug. 22 in Zimbabwe’s state-owned Herald newspaper. China’s investment in 2013 was $602 million, he said.

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Joshua Fellman

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