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On Streets of Harare, Few Takers for China's Yuan

FILE - China's yuan will become Zimbabwe's reserve currency.
FILE - China's yuan will become Zimbabwe's reserve currency.

Zimbabwe abandoned its worthless dollar in 2009, and the southern African nation started using almost all major currencies such as the U.S. dollar, South African rand and British pound. But now, following the recent visit of Chinese leader Shee Jeen-peeng Xi Jinping, China's yuan will become Zimbabwe's reserve currency.

Former high school teacher Edward Chara now drives a taxi in Zimbabwe and imports goods for sale in the country. He says no to the yuan.

Zimbabwe imports most of its goods from other countries, he says. He predicts problems for people who want to go to other countries and will have to exchange U.S. dollars with yuan.

Spiwe Sibanda shares his opinion. She imports computers and parts from South Africa to sell in Harare.

"I do not see what difference it will make in my life because I have never traded in it,” she said. “I have never been to China. So I do not think it is going to make much difference.”

Vendors in Zimbabwe see South Africa's rand, pictured, as more useful than the yuan.
Vendors in Zimbabwe see South Africa's rand, pictured, as more useful than the yuan.

Sibanda prefers the U.S. dollar and the South African rand.

“The rand because of the proximity [to South Africa] and the U.S. dollar because of its international nature," she said.

That is the same for Douglas, who sells vegetables and fruits in the streets of Harare — some of them imported from South Africa.

He says the yuan would only be recognized in China and Zimbabwe. But with the dollar, he says, if you take it to countries like Mozambique, it works; in the States, it works; in Zimbabwe, it works.

“I have been working as a vendor for three years,” he said. “Since the adoption of the U.S. dollar, it has helped us prosper.”

Growing relationship

But trade between Zimbabwe and China has been growing over the years, so calls to keep the dollar as the flagship of Zimbabwe's multiple currency regime might fall on deaf ears.

China is Zimbabwe's largest foreign investor, with interests ranging from construction and energy to telecommunications. China has also become the largest exporter of Zimbabwean products — mainly tobacco and minerals such as gold and diamonds. Western countries have restricted their commerce with the country, accusing the government of human rights violations.

Zimbabwe adopted a "Look East Policy," focusing in particular on China and Russia after the United States and the European Union imposed sanctions on President Robert Mugabe and his senior officials in 2002 amid reports of vote rigging.