Chinese imports from Africa: the impact of the recent commodity price declines
The objective for this paper is to examine Chinese imports from Africa during 2015 and assess the extent to which falling global commodity prices have contributed to changes over more recent import values, and in particular from the 2014 values. We make no attempt to correlate the undoubted relationships between the falling commodity prices and the slowdown in the Chinese GDP growth over the most recent period, but rather examine the trade data. Similarly we make no attempt to examine the falling global commodity prices on African exporters and their trade and economic profiles more widely, but restrict our analysis to Chinese imports from Africa. We use Chinese import data for consistency for the main analysis, and where we cross-check using the African export data we warn of the limitations of this African data in many (if not most) instances.
To set the scene we start by introducing some graphs and a discussion to illustrate the extent of the global commodity price declines over the most recent period and 2014 to 2015 in particular. The overall metal price index has been steadily declining since its peak in mid-2011. It reached a recent low at December 2015 that was still above the index prices for the early years of this century, and most recently it has shown a slight upturn. More precipitous was the dramatic decline in crude oil prices from late 2014 to prices of around 40 % of those consistently prevailing for the three years to mid-2014. The other two examples of iron ore and copper unit prices that we introduce also shows lows at December 2015, although these declines have been over a slightly longer period and not as precipitous in nature as the crude oil decline.
The profile of Chinese imports from Africa by value shows that they were very consistent over the three years from 2012 to 2014 inclusive at around $115 billion, but during 2015 they declined by 39% in aggregate to $70.5 billion. This decline was significantly greater than the 14% decline in Chinese global imports, and meant that the African share of the Chinese global imports declined from being consistently close to 6 % over the previous three years to 4.19% during 2015.
South Africa has been the main African supplier, with a share of around 40% of the African imports in recent years. Combined with imports from Angola of around 25% this means that around two-thirds of the total have consistently been from two sources. Next in order for 2015 were Sudan (both North and South combined), Democratic Republic of the Congo (DRC), Congo itself and Zambia. These countries are followed by a further ten with 2015 shares of between one and two percent of the total and the top 20 are rounded of by Ethiopia and Tanzania with 0.54% of the Chinese imports each.
Overall we can say that the Chinese imports from Africa during 2015 were dominated by the two source countries of South Africa and Angola with some 65% of the imports between them and the two commodities of crude oil and the mystical commodities nes (possibly gold) with an import share of 58.5%. Most of the other commodities were similarly prized from below the earth’s surface, while the three remaining (logs, oil seeds and tobacco) were grown on the earth’s surface. There are no manufacturing products in the conventional sense of note in the main imports. By value, the imports were down by 39%, and as this decline was greater than the decline in Chinese global imports Africa lost significant market share in China. Driving this change was a fall in average unit prices across all of the major imports.
This Working Paper was prepared during the tralac Geek Week of 11-15 April 2016. The authors are, respectively, tralac Associate; Research Analyst: Centre for Chinese Studies, Stellenbosch University; Policy Analyst: Namibia Trade Forum; and Project Manager: Maritime Research, Innovation and Industry Engagement, South African Maritime Authority.
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