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Global Insight: Great potential in China-Africa economic and trade cooperation

Released on:2020-05-12 Views:

Kenya’s Lamu Port project undertaken by a Chinese enterprise continues its construction while doing a good job in epidemic prevention and control. The port is an important link in the Kenya-South Sudan-Ethiopia economic corridor. Berth 1 of the Lamu Port project.

 

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Key Content

With major strategic achievements made in China’s fight against COVID-19, the economic and social order gradually recovered and China-Africa economic and trade cooperation revived. According to analysis, China-Africa economic and trade cooperation is resilient enough and will further drive the growth of Africa’s economy affected by the epidemic.

According to the latest data released by the General Administration of Customs of the People’s Republic of China, imports and exports of goods between China and Africa totaled RMB 385.36 billion from January to April. While the joint against the epidemic goes on, China-Africa economic and trade cooperation maintained stable as a whole.

 

“Thanks to the Chinese e-commerce platform, our farmers see hope now and can continue to engage in global trade”,

 

“Rwandan chill with attractive scent”, “grew economically under banana trees” and “for the surprise of your tongue” are the slogans of chili sauce produced in Rwanda on Chinese online shopping platforms. Within the cooperation framework of Electronic World Trade Platform (eWTP) jointly built by Alibaba and Rwanda, this kind of chili sauce called “Volcanic Hunter” sold well and became popular among Chinese consumers as soon as it hit the market in mid-January this year. In the first four months of 2020, Alibaba has imported more than 60 tons of chili from Rwanda, far exceeding the expectation.

 

Over the months, the Rwandan chili sauce went out of stock several times, and the Chinese e-commerce platform had to make additional orders three times, far exceeding the expectation of local suppliers. Recently, Rwandan chili sauce-flavored Australian lobster dishes and rice dumplings have been developed, which made the exports of Rwandan chili multiple.

 

James Kimonyo, Ambassador of Rwanda to China, participated in the live stream promoting Rwandan coffee organized by Alibaba recently. “Thanks to the Chinese e-commerce platform, our farmers see hope now and can continue to engage in global trade”, said Kimonyo. According to information, coffee beans are an important export crop of Rwanda. Through live streams and other forms, the number of online orders can be increased to decrease the cost of transportation. Song Juntao, Secretary-General of Alibaba Globalization Office, said: “The number of orders for African products did not decrease but increased, which can help local farmers resist the impact of the epidemic on the economy.”

 

At an online sharing session entitled “leveraging digital technologies in the fight against COVID-19”, Vera Songwe, United Nations Under-Secretary-General and Executive Secretary of the United Nations Economic Commission for Africa (UNECA), said: “The fight against COVID-19 is a global challenge and we should cooperate to cope with it. In China, digital technologies play a significant role in their fight against COVID-19, which also boost Africa’s cross-border e-commerce. She said that she would like to join Chinese e-commerce merchants' live streams to promote African products.

 

To control the spread of COVID-19, many African countries have adopted strict prevention and control measures and the “online economy” is increasingly popular. Kilimall is an African e-commerce platform set up by Chinese entrepreneurs, and its orders almost doubled in the first quarter of this year. It covers more than 10 million users in Kenya, Uganda, Nigeria and other African countries. “Most of Kilimall’s products are from China. People can buy products from China simply by using a mobile application at home,” said Liao Zhengrong, Brand Director of Kilimall. To meet the needs of African people to fight against COVID-19, the platform set up a special sector and other convenient purchasing channels for urgently needed products such as epidemic prevention supplies, achieving rapid and efficient demand matching.

 

“It is good news for many African countries that China took the lead in recovering its economy”

 

China is pacing up work and production resumption, which greatly stimulates economic growth in African countries. Reuters reported that with the boost of China’s export growth, South African Rand has rallied recently. According to statistics, South Africa exported 12.726 million tons of iron ores to China in the first quarter of this year, up 22.2% year-on-year. In March, China imported 54,741 tons of copper ores and concentrates from DR Congo, increasing more than 24 times than that in the same period last year. In the first two months of this year, bauxite imported from Guinea accounted for 48.5% of China’s total bauxite imports.

 

According to a recent analysis published in Tanzania's The Citizen, it is good news for many African countries that China took the lead in recovering its economy because China’s economic recovery will lead to massive infrastructure construction, which will require a huge demand for resources. This is significant to African countries that rely on mineral exports. Taking Zambia, the Republic of the Congo and DR Congo (collectively known as the Copperbelt) as an example, the region produces 70% of the world’s rare minerals such as cobalt and lithium. China is the major producer of mobile phones, batteries, and other electronic components, and the largest importer of these minerals. The heavy investment of some Chinese mining enterprises in African countries also drives local economic growth.

 

The joint development of projects under the Belt and Road Initiative brings huge social-economic benefits to African countries. Recently, the first loaded joint debugging of the 23-kilometer belt conveyor system of Chinalco’s Boffa Bauxite Project in Guinea was successfully completed. The project is designed to produce 12 million tons of high-quality bauxite every year. It marks the full operation of the largest Chinese-invested bauxite project in Guneia. Kenya’s Lamu Port project undertaken by a Chinese enterprise continues its construction while doing a good job in epidemic prevention and control. The port is an important link in the Kenya-South Sudan-Ethiopia economic corridor and 80% of the project has been completed. The freight line of the Addis Ababa-Djibouti Railway built and operated according to the Chinese standard continues to be in operation, supporting the material supply of Ethiopia and Djibouti during the epidemic. Since the beginning of 2020, Addis Ababa-Djibouti Railway has been operating more than 370 freight trains, transporting more than 10,000 standard containers and tens of thousands of tons of important supplies such as fertilizers and food to Ethiopia from the Port of Djibouti.

“China-Africa partnership is growing deeper and China-Africa economic and trade cooperation will help Africa increase investment and create jobs”

 

Recently, ZAR 1 billion (about USD 54 million) of medical supplies purchased by Naspers from China arrived in South Africa. They will be distributed to different areas of South Africa through the logistics warehouse of takealot, the country’s largest e-commerce platform. With the assistance of the Chinese government and enterprises, the purchase, customs clearance and shipment of the supplies took just about 20 days or so. China gave full play to its capacity advantage and actively exported medical supplies to South Africa and other African countries, strongly supporting African people in improving their ability to fight against the epidemic.

 

“The solidarity and cooperation between China and Africa in the fight against the epidemic will help further promote China-Africa economic and trade cooperation,” said Liu Haifang, Director of the Center for African Studies of Peking University. South African economist Moya Manani said in her recent article: “This year marks the 20th anniversary of the establishment of the Forum on China-Africa Cooperation (FOCAC). China-Africa partnership is growing closer and China-Africa economic and trade cooperation will help Africa increase investment and create jobs.” She believes that many African countries benefit from the joint construction of the Belt and Road and China-Africa cooperation will help Africa achieve Agenda 2063 and the Agreement Establishing the African Continental Free Trade Agreement (AfCFTA).

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Affected by COVID-19, the Agreement Establishing the African Continental Free Trade Agreement (AfCFTA) scheduled to launch this July is expected to be postponed to next year. This agreement signed by 54 African Union (AU) members is expected to form a large market that covers 1.2 billion people with GDP totaling USD 2.5 trillion. According to Stephen Karingi, Director of the Regional Integration and Trade Division at UNECA, to maximize Africa’s benefit from the AfCFTA, new investments in infrastructure, personnel capacity and manufacturing will be required, and “China-Africa cooperation can help Africa fully implement the AfCFTA”.

 

Liu Haifang believes that with the increasing participation of African countries in the joint construction of the Belt and Road, many medium- and small-sized Chinese enterprises will carry out educational training, digital economy and other diversified industrial cooperation in Africa, bringing plenty of opportunities to Africa’s huge market after the epidemic. He said that China-Africa trade is resilient and complementary because China has a huge demand for Africa’s energy and resources while Africa is in urgent need of infrastructure construction such as connectivity in a period of rapid growth. Meanwhile, China-Africa cooperation can create plenty of jobs for the rich labor force in this “young continent” and promote the long-term growth of Africa’s economy. China-Africa economic and trade cooperation has great potential.

 

Source: People’s Daily