Abstract

To assess the win-win of both China and Zimbabwe if Zimbabwe diversifies its agricultural exports into the Chinese market, this study employs a Computable General Equilibrium (CGE) model that is becoming popular in analyzing economic issues. With Zimbabwe having been in a constant financial and economic crisis and the major sector not contributing much to the economic growth, a bilateral Free Trade Agreement on Agriculture and Agri-based commodities between China and Zimbabwe was proposed based on the Forum for China-Africa Cooperation Action Plan (2019-2021). To evaluate the policy change, the study used a CGE and Dynamic Global Trade Analysis Project (GTAP) model 2011 and employed two policy scenarios of baseline and that of zero tariffs. By comparing the baseline and policy simulation results for the periods (2020-2030), the research found that the policy would be a win-win to both countries but with more negative impacts on Zimbabwe. The study therefore proposed some recommendations aimed at sustaining the policy change should the two countries engage in it. The recommendations included the need for agricultural research and development to boost agricultural production and exports in Zimbabwe.

Key words: Computable general equilibrium dynamic model, global trade analysis project, bilateral free trade agreement, Zimbabwe, China.