Building capacity to help Africa trade better

China-Africa merchandise trade for the December 2008 year

Trade Reports

China-Africa merchandise trade for the December 2008 year

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The objective of this paper is to examine the merchandise trading profile between Africa and China. This trade has seen dramatic growth in recent years, with this growth rate almost always higher than the increasingly documented Chinese export penetration into global markets. Chinese imports from Africa are heavily dominated by resources, and in particular mineral fuels (84 % of the aggregated African total) and precious metals (another 3.2 %). Chinese exports to Africa are much more diverse and cover most of the general manufacturing sectors. Looking at the often mirror data of African imports from the global economy, the notable feature again is the dramatic rise of China in all of the markets that consistent data is available for.  In addition, an update on the direct China-Africa trade for the six months ending June 2009 is given in the Annex (where Chinese imports declined by 51% on the comparable period during 2008, with the average unit price of most of the main imports falling by a similar figure indicating that this decline was largely price-driven).

We suggest that given the nature of African exports into China and the consequentially low average tariff assessed on these imports, China may wish to consider extending its currently limited preferences for Africa into a much more ambitious scheme. This trade scheme could almost resemble a Chinese variant of the African Growth and Opportunities Act (AGOA) US-initiated trade liberalization program intended to promote African exports to the US market or the Economic Partnership Agreements (EPAs) that are being negotiated for African access into Europe. The direct costs to China of such a trade arrangement would be minimal and the political gains from giving Africa an opportunity to promote its resource and manufacturing base, a base that is increasingly being underpinned either directly or indirectly through infrastructural building from China itself, is very large.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.


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