Markus Weimer
(Former Chatham House Expert)

China is giving a US$ 8 billion lifeline to cash-strapped Zimbabwe in a move that will raise further questions about the way the Chinese government does business in Africa, and the kind of regimes the People's Republic props up.

The deal is likely to boost President Robert Mugabe who is being credited for securing the investment at a meeting with Chinese State Premier Wen Jiabao in Egypt. The US$8bn will be invested in mining operations and capacity as well as social and infrastructure developments.

The company chosen to spearhead the deal is the little-known China Sonangol International Holding, a company with links to the Angolan state oil company, Sonangol, as well as the China International Fund Limited which recently signed a $7 bn contract with the military junta in Guinea.

China Sonangol is part of an extensive and opaque network of enterprises and state and private interests. The network was instrumental in China's successes in Angola, as highlighted in Thirst for African Oil, a recent Chatham House report.

In addition to Guinea, Zimbabwe is the latest country to be caught in this web, which spans Tanzania, Mozambique, Congo-Brazzaville and Nigeria. Outside of Africa, other countries where the network has interests include Indonesia, Singapore, and North Korea.

Repeated claims by the Chinese government that it has no direct links with any of the private companies involved, will be further undermined by this billion dollar deal with Zimbabwe.

Further resources

Thirst for African Oil: Asian National Oil Companies in Nigeria and Angola
Chatham House Report
Alex Vines, Lillian Wong, Markus Weimer and Indira Campos, August 2009