China-Africa trade rises in first quarter

Trade between China and Africa rose by 23 per cent to US$64.8 billion in the first quarter compared to the same period last year, boosted by increased imports of minerals and metals from the continent.

Chinese imports from Africa went up by 29.3 per cent to US$29.7 billion, while exports to Africa rose by 18.2 per cent to US$35.16 billion in the first three months of 2022, according to China’s General Administration of Customs data.

But pandemic-related supply chain disruptions from lockdowns in Shanghai and a closure of Chinese ports may lessen trade numbers for subsequent quarters, analysts said.

Similarly, the recent shutdown of the flood-hit Port of Durban in South Africa, where nearly a fifth of Africa-China trade passes through – especially minerals from the Democratic Republic of Congo (DRC) and Zambia – could hurt cargo flow as well.

The China Mission to the African Union has boasted that “even under the backdrop of the Covid-19 pandemic, China-Africa trade has been resilient … which has surpassed the total value of US-Africa trade for 2021”.

In the quarter, South Africa was the continent’s biggest trading partner with China, exchanging goods worth US$12.3 billion, which was a 13.5 per cent growth year on year. China’s imports, worth US$7 billion, consisted mainly of minerals and metals. Other top trading partners include oil-rich Angola (US$6.5 billion) and the DRC (US$5.59 billion), where China sources most of its cobalt, a component of batteries for electric vehicles, smartphones, and laptops. Two-way trade with Nigeria stood at US$5.45 billion and Egypt at US$4.9 billion.

Gracelin Baskaran, a development economist at the University of Cambridge, said China’s first-quarter GDP grew by 4.8 per cent year on year, the highest growth rate among major economies and imports and exports of goods grew by 7.5 per cent and 13.4 per cent, respectively.

“China’s production of solar cells and new energy vehicles increased by 24.3 per cent and 140.8 per cent respectively, year on year,” Baskaran said, adding that Africa’s exports to China of key commodities such as cobalt, copper and lithium had helped.

For example, Baskaran said, Zambia was the world’s biggest exporter of raw copper, and China the biggest importer. The DRC is the biggest exporter of cobalt, China the biggest importer. As for lithium, three Chinese mining firms have bought controlling shareholdings in Zimbabwean lithium mines this year.

Teresa Nogueira Pinto, an African affairs expert, said t China had been Africa’s top business partner for more than a decade. However, she said the recent surge in trade reflects an important shift in Beijing’s approach to the continent.

“The focus is now less on infrastructure and lending and more on trade,” Pinto said. “More than an increase in volume, we are witnessing the progressive diversification of African exports to China, as well as the expansion of e-commerce between China and some African countries.”

For 2021, total trade between China and Africa reached US$254.3 billion, up by 35.3 per cent year on year, among which, Africa exported US$105.9 billion of goods to China, up by 43.7 per cent year on year, surpassing prepandemic numbers. China has been Africa’s largest trading partner for 13 consecutive years.

Covid-19 lockdowns in China are likely to affect trade numbers for the rest of the year, but on the other hand, the Durban port has reopened. Baskaran said, though, that while the port was close to fully operational, “the road damage resulting from the floods will also need to be fully repaired”.

Pinto said that since the US administration of Barack Obama,

Africa had lost standing in America’s foreign policy strategy. She said Washington approached the continent mostly through a security perspective – in particular, the war on terrorism. Businesses – especially medium sized companies – find it difficult to navigate the risks associated with this environment.

But she said US-Africa trade, while seeing some fluctuation, remained relatively stable over the last decade. Still, she noted, in comparison, “China-Africa trade has experienced high growth. [It] has outpaced the growth of US-Africa trade”.

Most Chinese exports to Africa are finished products – from textiles to electronics – while African sales to China are dominated by raw materials and unprocessed products, resulting in a trade surplus in China’s favour.

To help balance trade, President Xi Jinping promised in November to increase imports from Africa to US$300 billion in the next three years. He told the Forum on China-Africa Cooperation that Beijing would open “green lanes” for African agricultural exports to China, and offer US$10 billion in trade finance to support such exports.

Legislators in the southern province of Hunan have already moved to enact Xi’s “green lanes” pledge, approving regulations to boost trade with Africa. Additionally, a free-trade zone will be established to help develop Hunan’s trading activity with African countries.