A Chinese company has announced plans to invest $6bn in a 200 square kilometre business park in Zimbabwe. The project will take advantage of the introduction of "special economic zones", passed by the country’s parliament last week and according to local paper The Herald, will "change Zimbabwe’s economy forever".
The company behind the plan is Qingdao Hengshun Zhongsheng, a listed company that until recently specialised in transmission and control equipment for electrical grids.
The location of the park has not been announced, but Zimbabwean officials told The Herald that they expected it to be sited somewhere along the Bulawayo-Kwekwe railway corridor in the southwest of the country.
The industrial park will include a non-ferrous metallurgy processing plant for the manufacture of mining and agricultural processing equipment, a power station and an upgraded rail system. Qingdao Hengshun Zhongsheng is partnering with China Railway and the Qingdao City Construction Investment Group on the scheme.
As a gift to the host country, the Chinese concern will also build a primary school.
Jia Xiaoyu, the president of Qingdao Hengshun Zhongsheng, called Zimbabwe an "important target".
"Zimbabwe is our next important target for implementing an industrial park," he said. "We are now planning to advance the park this year and we hope we can launch it next year based on our political and economic exchanges."
The decision to invest follows a visit from public officials from the central port city of Qingdao to Harare in June of this year.
During a visit a memorandum of understanding was signed, which Lazarus Dokora, Zimbabwe’s minister for planning and investment, said would "culminate in meaningful investment flow into Zimbabwe from the world’s second largest economy".
It also followed a visit by President Xi Jinping in December last year, in which Beijing was declared to be an "all-weather friend" of Zimbabwe.
Mr Jia said he hoped for "an environment of peace".
"We think the political or development environment is very important to us in Zimbabwe," he said. "We hope for an environment of peace and also we want to preserve the available professionals and talents in the country."
The construction of an industrial manufacturing facility has been welcomed by the Zimbabwean government as a vital step towards industrialising its economy, and capturing more segments of the value chain by refining ores and agricultural products within its own borders.
In return the Chinese will have first access to one of three special economic zones, which offer low taxes and light-touch regulation. For example, there will be no restriction on the number of Chinese workers that can be employed, and tough rules on local ownership will be waived.
The zones are an attempt to attract foreign direct investment (FDI). Official data shows that the country received $1.8bn in FDI between 1980 and 2013, compared with $8bn for Zambia and $16bn for Mozambique.
Qingdao Hengshun Zhongsheng Group was founded in 1998 as a specialised electrical engineer, after which it recorded consistent annual growth rates of 20%. It listed on the Shenzhen stock exchange in 2011. The following year, a glut of transmission equipment in the domestic market forced it to move into the construction of overseas industrial parks and power stations. The company has followed an aggressively expansionist strategy ever since.
The company is also building the Hengshun Sulawesi Industrial Park in Indonesia, which has metal smelting furnaces, logistics, warehousing and residential areas.
Image: Zimbabwe is desperate to more from agriculture to industry (Shack Dwellers International/Creative Commons)