HARARE – China yesterday unveiled nearly $700 million lending to Zimbabwe, in the biggest package of loans from communist Beijing to this land locked but mineral rich southern African state, but demanded that Harare stay away from taking local Chinese businesses under its controversial indigenisation drive.

The loans were a huge boost to financially stricken Zimbabwe, which has struggled to attract foreign aid, with Western financial institutions holding out for political and economic reforms before resuming lending to Harare, whose foreign debt stands at $7 billion.

China’s Vice Premier Wang Qishan arrived in Zimbabwe at the weekend and yesterday led a high level Chinese delegation, including the President of the Export and Import Bank of China, which signed a package of loans.

The loans included $342 million for agriculture equipment and machinery, $99.5 million for health equipment and supplies and $144 million for the Harare city council to revamp its water and sewer system.

China also provided a concessionary $102 million to the Zimbabwe government and two grants worth $14 million. The loans were availed by China's Export-Import Bank.

“We are beginning to see the coming in of the China Development Bank in areas of energy, mining agriculture, manufacturing and tourism. This will help us in the growth of our economy,” Vice President Joice Mujuru said during a meeting with Qishan. “Our friendship is not a one-off friendship but an all weather friendship.”

The loans signaled China’s serious push for mineral resources in Zimbabwe, which include gold, diamonds, chrome, coal and the world's second biggest reserves of platinum, used in the auto industry.

China's investments have been growing steadily in Zimbabwe and include Anjin Zimbabwe diamond mine, several chrome mines, platinum concessions which Zimbabwe Platinum Holdings ceded to the government, Sino-Zimbabwe cement company, a joint venture uranium prospecting firm and cotton and tobacco companies.

Qishan, who also met President Robert Mugabe and Prime Minister Morgan Tsvangirai, said Zimbabwe’s political parties should be left to settle their disputes and when they want to hold fresh elections.

Foreign investors in Zimbabwe are concerned at plans supported by Mugabe and ZANU-PF to hand black Zimbabweans a majority stake in all foreign companies, including mines and banks.

Qishan said China was looking to invest in mining, tourism, infrastructure development and agriculture and said the Chinese were conducting a feasibility study on whether to fund the expansion of the airport in Zimbabwe’s premier Victoria Falls holiday resort.

The Chinese Vice Premier emphasized during the visit that he hoped Chinese businesses would be protected from Zimbabwe's plans to increase ownership by black Zimbabweans.

Mugabe, who is one of Africa’s oldest leaders at 87, has been in power for over three decades and is increasingly seeking economic and political support from China after western countries imposed sanctions on ZANU-PF, accusing him of human rights abuses and stealing elections.

"China understands the need for indigenisation but we hope Zimbabwe will protect the legitimate right of Chinese businesses in your country," Qishan said through an interpreter.  “China will continue to support your economy to recover. We will continue to provide bilateral financial cooperation.”