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Sunday, July 02, 2006

Riding China's Economic Wave

This writer from Zimbabwe is pretty upset at economists, the Reserve Bank, and at being ignored by Chinese leaders:

Who Needs an Economist Or Investment Analyst, by Admire Mavolwane, Commentary, Zimbabwe Independent (Harare): John Maynard Keynes who, together with Milton Friedman, is probably the most influential economist of the 20th is said to have hoped that being an economist ... would one day be deemed as respectable and useful as being a dentist. If no primary school kid aspires to be an economist, where do ... economists come from? Most probably they discover by accident their passion for analysis and economics while at university, which sort of explains why the profession does not command much respect.

In Zimbabwe, the situation is even worse, because policies change so much that whatever the prognosis economists and analysts give quickly loses relevance. The best answer economists and analysts can probably give to any question at the moment is "who knows".

For instance, a week ago the Reserve Bank reduced the amount of statutory reserves from 60% to 50% for commercial and merchant banks and from 45% to 40% for discount houses. This came after the requirements had been increased a few months earlier.

On ... Monday ... inflows were expected, [but] the central bank rather than pump money into the market, issued ... bonds ... Then on Wednesday, two days later, it bought back the same paper. This was just the latest in a series of twist and turns from the monetary authorities. ...

China, the fastest growing economy in the world, ... is counted as one of Zimbabwe's remaining few friends. The strength of the relationship is, we are told, evidenced by the increasing number of Chinese nationals and businesses in Zimbabwe. The just ended golf tournament held in Harare and the recent trip by the vice president to China a few weeks ago were touted as further evidence for all to see that China is our friend both in deed and spirit.

Whilst the Chinese minnows were teeing off on the golf course, the Chinese Prime Minister, Wen Jiabao, was preparing for a tour to Africa which will take him to Egypt, Ghana, DRC, Angola, South Africa and Tanzania. In April this year, Chinese President Hu Jintao visited Nigeria, Morroco and Kenya among other African states. Zimbabwe, the good old friend, was not part of the itinerary in April and neither is it this time.

With most African economies reliant on commodity exports, mainly oil, copper, platinum, cotton and nickel, and China being the largest consumer of the these products, the forays into the continent by the two most influential citizens of China is seen as a strategic move aimed at establishing and deepening bilateral relations. The ultimate aim is to secure supplies of these all important commodities. ...

Zimbabwe, it seems, does not appear on the strategic map of that country in as far as supplies are concerned. The other side of the coin is that whilst we bought their buses, planes, throwaway gadgets and apparel, in the bigger scheme of things we are not an important market for their booming export markets. So economically, we are not on the radar screen. It is, however, rather difficult to conclude where we stand politically . What we can be sure of, with a measure of confidence, is that friends who never visit, but send their children to play, send wrong signals. ...

    Posted by on Sunday, July 2, 2006 at 02:22 AM in China, Economics, International Trade | Permalink  TrackBack (0)  Comments (7)


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