ZCZC
BCN-37
BELT & ROAD-CHINA-AFRICA-TRADE-TRANSFORMATION
Belt & Road Initiative promotes transformation and upgrading of China-
Africa trade
BEIJING, Sept. 15, 2018 (BSS/Xinhua) – The Belt and Road Initiative is
promoting transformation and upgrading of the trade between China and Africa
and bringing more benefits to the people of both sides.
China has been Africa’s largest trading partner for nine years in a row. In
2017, China’s trade with Africa surged 14 percent year on year to 170 billion
U.S. dollars. The fast growth continued into the first half of 2018 when the
trade volume jumped 16 percent to nearly 100 billion U.S. dollars.
— Booming China-Africa trade amid structural adjustment
After the establishment of the China-Africa Cooperation Forum in 2000,
China-Africa economic and trade cooperation has entered a period of rapid
development.
Trade volume has grown rapidly from 10 billion U.S. dollars in 2000 to 170
billion U.S. dollars in 2017. With China becoming the largest trading partner
of Africa for the first time in 2009, China-Africa trade has also entered a
stage of structural adjustment.
It is worth noting that with the implementation of the Belt and Road
Initiative, the building materials and electromechanical products with high
added value have gradually become the main goods exported by China to Africa.
Earlier, China mainly exported light industry, food, chemical products, and
livestock products to Africa.
At the same time, with a series of measures such as tariff reduction and
exemption adopted by China, in recent years, Africa’s exports to China have
grown rapidly. The main African export commodities include agricultural and
forestry raw materials, oil and related products, and mineral raw materials.
Due to the differences in industrial structure and natural resources
between China and Africa, the economic and trade cooperation between the two
sides is highly complementary. The focus of trade cooperation is mainly on
infrastructure and capacity cooperation, according to Yang Baorong, deputy
director of the Institute of West-Asian and African Studies (IWAAS) of
Chinese Academy of Social Sciences (CASS).
Thanks to the Belt and Road Initiative and the international capacity
cooperation, many infrastructure projects in Africa have been launched,
leading to the rising demands for the building materials.
China and Africa have mutual needs, mutual advantages and opportunities
with each other. China-Africa cooperation has achieved transformation and
upgrading. From the original government-based assistance to the current
enterprise and market-based mutual benefit cooperation, the bilateral
cooperation relationship has been upgraded to a new starting point, said Lin
Songtian, Chinese ambassador to South Africa.
— More potential to be tapped amid rising investment
Since 2000, China’s top ten trading partners in Africa have accounted for
about 70 percent of China-Africa trade volume. The two largest trading
partners, South Africa and Angola, have accounted for 40 percent.
From the perspective of China’s exports to Africa in 2017, the top ten
export destination countries were South Africa, Nigeria, Egypt, Algeria,
etc., accounting for 67.9 percent of China’s total exports to Africa.
From the perspective of China’s imports from Africa last year, the top ten
sources accounted for 84.4 percent of China’s imports from African countries,
with South Africa and Angola taking the lion’s share and accounting for 59.4
percent.
China is making efforts to improve its trade structure with the African
countries and helping them to enhance industrialization. Huge potential
needed to be tapped between China and Africa amid rising Chinese investments,
said analysts.
In recent years, many Chinese steel, cement, and chemical companies have
built manufacturing bases in Africa for localized production.
In the past three years, annual Chinese direct investment into Africa was
about 3 billion U.S. dollars on average. By the end of 2017, China’s
investments of all kinds into Africa totaled 100 billion U.S. dollars,
covering almost every country on the continent.
— Joining hands to consolidate industry foundation for trade
In the long run, China should work with African countries to continuously
improve the software and hardware environment of local businesses, improve
the level of industrial development, and enable African countries to produce
more competitive products in the Chinese market and even in the international
market.
More Chinese enterprises should be supported to invest in Africa. They can
make full use of the abundant natural resources and labor resources, promote
the transformation and upgrading of African industries, and enhance the
export capacity of African commodities. International capacity cooperation
should be a solution. The Chinese enterprises can transfer textile, clothing,
home appliances and other industries to Africa to achieve localized
production and sales in Africa, according to Zhang Chenxu, an official of the
Export-Import Bank of China.
In addition, China should increase financial support and further expand the
scale of trade through more convenient and efficient financial services, said
analysts.
For example, China-Africa Development Fund (CADFund) has enlarged its
investment portfolio across Africa in recent years under the Belt and Road
Initiative in areas such as agriculture, manufacturing, infrastructure
development and industrial parks.
According to the CADFund, it has accumulatively invested more than 4.6
billion U.S. dollars in around 90 projects in 36 African countries, which has
driven the Chinese enterprises’ investment in Africa to more than 23 billion
U.S. dollars.
BSS/XINHUA/HR/1225