Bilateral Trade: Africa Makes Major Inroads Into Chinese Market
The continent invested over 15 billion US dollars in China in various sectors by 2014.
China-Africa cooperation has witnessed investment on both sides. Africa invested over 15 billion US dollars in China by 2014, most of which were in machinery, pharmaceuticals, and high-tech ventures like electronics, according to a report by ChinaDaily last week. Before now, Africa mainly exported natural resources to China, although they still play an important role in China’s imports from the continent.
“Resources and minerals imported from Africa remain our mainstay,” Jiang Wei, Director General of Western Asian and African Affairs in China’s Ministry of Commerce, recently told the press in Beijing. By end of 2015, crude oil, iron ore, diamonds, and agricultural products, accounted for 56.5 per cent of Chinese imports from Africa. Copper is another African export to China.
Since the Forum on China-Africa Cooperation, FOCAC was set up in 2000 to serve as a high-level economic diplomacy platform between China and Africa, trade exchanges have been dramatic, the report noted. “For every 100-dollar worth of products Africa exported at the start of FOCAC in 2000, around 3 dollars of them were sold to China. Fifteen years after the establishment of FOCAC, that figure had risen to 24 dollars in 2015,” Jiang said.
Furthermore, China-Africa trade volume was 1 billion US dollars in 1980, but rose to 10 billion US dollars at the beginning of FOCAC in 2000. A decade later, China surpassed the United States as Africa’s top trade partner with a total volume of 114 billion US dollars. By end of 2014, China-Africa trade had surpassed 200 billion US dollars. On the other hand, China’s total investment stock in Africa is currently about 120 billion US dollars, with over 3,100 Africa-based enterprises.
“We need to develop agriculture and industry. When they go together, we can achieve sustainable development. We encourage Chinese companies to process raw materials in their host countries in order to add value,” Jiang Wei pointed out.
He said some African countries have made advances like reducing dues on imports of daily products. “I am confident that Africa in future will export more to China and other countries,” he said.
In its opening up policy, China is keen on shifting its labour-intensive industries to Africa. This is to be followed by export of China’s excess capacity to support African infrastructure projects and capacity-building through technical assistance, vocational training, and fellowship programmes.