Zimbabwe could adapt Chinese currency

The massive assailing of the Zimbabwean economy by the Chinese requires the Yuan to strengthen these economic reconstruction efforts. Invited by President Robert Mugabe as part of his 2004 "Look East" policy to help drive the economy and create jobs, such steps were taken after relations with former traditional investment partners such as the European Union and United States soured.

China has since been able to create its own little sphere of influence and establish a ubiquitous presence in Zimbabwe. China remains highly unpopular with Zimbabwe's industrial and commercial players, along with the general members of the public who accuse the Chinese of poor labor practices and shoddy goods and services.

Reserve Bank governor Gideon Gono, chiefly seen as a close ally of Mugabe, said he was in favor of having the Chinese Yuan as the country's official currency. After the Zimbabwean dollar was suspended in 2008, the country adopted a multi-currency regime, which includes the use of the U.S. dollar, the South African rand and the Botswana pula.

Gono says that the Chinese Yuan would be introduced alongside the Zimbabwean dollar. Mugabe's political supporters have been calling for currency reforms to bring back the Zimbabwean dollar.

"With the continuous firming of the Chinese Yuan, the US dollar is fast ceasing to be the world's reserve currency and the eurozone debt crisis has made things even worse," Gono told state media.

"As a country, we still have the opportunity to avoid being caught napping, by adopting the Chinese Yuan as part of consolidating the country's 'Look East' policy.

"It's only recently when we had the startling revelations, with Angola offering to bail out her former colonial master Portugal from her debt crisis. This can also happen with Zimbabwe if we choose the right path," Gono added.

"If we continue with our 'Look East' policy, it will not be long [until] we will also be volunteering to bail out Britain from her debt crisis, and I will not wait for my creator's day before this happens. There is no doubt that the Yuan, with its ascendancy, will be the 21st century's world reserve currency."

There are concerns that such a policy could mean "handing over" the country to the Chinese, who already have been offered huge mining rights by Mugabe - despite protests from his coalition government partners.

Economist Eric Bloch maintains that "it is not practical" for Zimbabwe to adopt the Chinese Yuan.

"Zimbabwe won't have any interaction with international markets, as the US dollar remains the standard currency in international trade," Bloch explained.