The Zimbabwe government has issued a strong and unprecedented warning to Chinese businesses operating in the country, ordering them to immediately cease illicit financial activities, environmental violations, and disregard for local laws—or face serious consequences. The rebuke, delivered by Tafadzwa Muguti, Secretary for Presidential Affairs in the Office of the President and Cabinet (OPC), marks a significant shift in tone from the government’s historically warm embrace of Chinese investment under the “Look East” policy.
Muguti’s remarks were made during the China-Zimbabwe Business Cooperation Roundtable held in Harare, where he expressed mounting frustration over rising cases of financial misconduct, labour abuses, environmental degradation, and cultural insensitivity involving some Chinese firms.
In a scathing address, Muguti accused certain Chinese investors of hoarding foreign currency, externalising undeclared earnings, avoiding the formal banking system, and engaging in extractive activities that offer little benefit to Zimbabwe’s economy.
“The majority of you business people are not banking your money. You don’t even have bank accounts. You’re keeping cash under your mattress, the floor, or the ceiling. But in China, you don’t do that,” Muguti said. “If all of you take US dollars and Zimbabwe Gold currency (ZiG) and hide them in your homes, our economy will collapse. There’ll be no liquidity. So starting now, we are directing you to bank your money.”
He stressed that all business revenues—whether earned in local currency or foreign currency—must be deposited into the country’s banking system and processed through the Reserve Bank of Zimbabwe (RBZ) for any outbound remittances.
Muguti also addressed growing concerns over some Chinese nationals entering Zimbabwe under the guise of tourism, only to engage in unlicensed business operations. He called for a firm crackdown on illegal business practices and stricter enforcement of immigration and investment regulations.
Zimbabwe Issues Stern Warning to Chinese Firms Over Illicit Operations
“Why are some Chinese nationals coming in as tourists, then opening shops or running unlicensed businesses? Getting a legal investment permit is not difficult. There’s no need to bribe anyone or operate in the shadows. Let’s follow the rules,” he said.
To ensure greater oversight, Muguti announced that all future visa and permit applications from Chinese nationals would require an endorsement letter from the Chinese Embassy, effectively increasing government control and accountability.
Environmental degradation was another key issue raised. Muguti condemned Chinese mining firms for desecrating sacred sites and graveyards during mineral extraction operations, calling such actions culturally offensive and morally unacceptable.
“There are reports of some Chinese companies digging up our ancestors’ graves to extract granite and gold. In some cases, bones are being moved aside to make way for mining. That’s the highest form of disrespect—not only in Zimbabwean culture but in yours too,” he said.
The government further reiterated its policy on mineral beneficiation, declaring that all mineral exports—particularly lithium—must undergo value addition within Zimbabwe. The aim, Muguti said, is to transition from being a raw material exporter to a manufacturing hub, especially for lithium batteries.
“Zimbabwe doesn’t want to just dig and ship. We want to manufacture lithium batteries locally. From here, we can supply the entire region—DRC, Zambia, South Africa, Botswana, Namibia. That’s the agreement we reached at the China-Africa Economic Forum,” he explained.
In response to the criticism, Steve Ke Zhao, CEO of the China-Zimbabwe Exchange Centre, acknowledged the government’s concerns but pointed to bureaucratic inefficiencies that hinder legitimate operations. Zhao said many Chinese companies invest millions of dollars only to encounter delays in acquiring work permits and installing machinery—forcing them to operate outside legal boundaries.
“Unfortunately, some of these companies have invested between US$5 million and US$10 million but can’t function. They have ZIDA certificates but can’t get work permits. Equipment is sitting idle. So they end up cutting corners—not because they want to, but because the system is too slow,” Zhao explained.
He emphasised that most Chinese investors are genuine and committed to contributing positively to Zimbabwe’s economy, but often lack awareness of local laws and cultural practices. The Exchange Centre, he said, is addressing this gap through training and workshops.
The developments signal rising tensions between Zimbabwe and its largest foreign investor group. While the government remains open to Chinese investment, it is increasingly determined to enforce regulatory compliance, protect cultural heritage, and ensure economic benefits are felt by the broader population.
As Zimbabwe continues its efforts to fight corruption and rebuild its economy, authorities appear poised to take a harder line against any investor—foreign or domestic—who undermines national interests through illicit practices.
Source- Bulawayo24
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