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Investigating the Possibilities of Zimbabwe Using Chinese Currency

Abstract


China’s extensive relations with African countries continue to attract interest and concern, especially as the category of those expressing disquiet about the possibility of this being another kind of colonialism now seems to be growing beyond the usual Western critics to include critical opinion leaders in key African countries [11]. Of all the China-Africa relationships the one that merits the most attention is Beijing’s ties with Zimbabwe. This is largely due to controversies associated with the contents and multi-dimensional extent of this relationship. These controversies, emanating largely from Zimbabwe’s domestic politics and the International reaction to them, have placed China in situations where its diplomacy in Africa has had to be explained and sometimes readjusted to ensure that it doesn’t lose the friendship of other Africa countries that view events in Zimbabwe differently. Occasionally, Zimbabwe also has had to modify its domestic politics in order to ensure that China can maintain a measure of moral high ground that would earn it (Beijing) some respectability among human rights communities. This examines Sino-Zimbabwean relations between 2003 and 2013; a decade in which the relationship between the two countries has become complicated as much as for what it excludes [17]. The closeness of China and Zimbabwe between 2003 and 2013 was due largely to the confluence of a number of events which includes: the antipathy between Zimbabwe and the West, which resulted in the imposition of various sanctions. China’s desires to benefit from Zimbabwe’s resources, especially those that are strategic to Chinese interest [20]. Chinese and Zimbabweans governments seem to have benefitted from this relationship, even if the extent to which the average Zimbabwean has benefitted is doubtful. There are serious grounds to question the degree to which these connections with China are in Zimbabwe’s long-term interest. Zimbabwe has added the Chinese Yuan to the multi-currency basket as the country turns to the East to ease the liquidity constraints biting the economy. Trade investments ties between Zimbabwe, China have grown appreciably. It is against this back ground of growth in trade and investment ties that in the2016 National Budget, Minister of Finance and Economic Development underscored the importance of including other currencies in the basket of already circulating currencies [23]. ‘In this regard, we wish to advise exporters and the general transacting public that in addition to the opening of accounts denominated in Botswana Pula, South African Rand, individuals and corporates can also open accounts denominated in Chinese Yuan (CYN). The use of multi-currency regime was credited with stemming hyperinflation which had made the local currency worthless.   


Keywords

Sino-Zimbabwe relations, currency exchange rates, currency crisis, resources, domestic politics, economic development, currency adoption

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