China and Africa have maintained their strong economic ties in 2023, with bilateral trade reaching a record high of US$282.1 billion, according to the latest Chinese customs data. However, Africa’s trade deficit with China also widened, as the continent’s exports of oil, minerals, and metals suffered from a drop in global prices.
China’s exports to Africa increased by 7.5 percent over 2022, reaching US$173 billion, while its imports from the continent decreased by 6.7 percent to US$109 billion. This resulted in a trade gap of US$64 billion in favor of China, up from US$46.9 billion in 2022.
China has been Africa’s largest trading partner for 15 consecutive years and has pledged to boost its imports from the continent by opening “green lanes” for agricultural products and offering duty-free access for goods from the least developed countries. China has also promised to help African countries diversify their economies and industrialize their sectors, as part of its Belt and Road Initiative and the Forum on China-Africa Cooperation.
However, the impact of these measures has been limited by the volatility of commodity prices, which account for a large share of Africa’s exports to China. In 2023, the price of Brent crude oil averaged US$83 a barrel, down from US$101 per barrel in 2022, due to an oversupply in the market and geopolitical tensions. The price of cobalt, a key ingredient for electric vehicle batteries that China sources mainly from the Democratic Republic of Congo (DRC), also fell by more than 50 percent in 2023.
These price fluctuations have affected the trade balance of some of Africa’s major trading partners with China, such as South Africa, Angola, Nigeria, and the DRC, which are predominantly resource-rich nations. On the other hand, some of Africa’s oil importers and non-resource exporters, such as Kenya, Ethiopia, and Rwanda, have seen their trade with China grow or remain stable.
Analysts say that the modest growth of China-Africa trade in 2023 reflects the challenges and opportunities facing both sides, as they recover from the pandemic and adjust to the changing global environment. They also say that both sides need to work together to find a more balanced and sustainable trade relationship, that can benefit from the potential of the African Continental Free Trade Area (AfCFTA), which came into effect in 2021.
The AfCFTA aims to create a single market of 1.3 billion people, with a combined GDP of US$3.4 trillion, by removing tariffs and non-tariff barriers among African countries. It also seeks to boost intra-African trade, which currently accounts for only 17 percent of the continent’s total trade, compared to 59 percent in Asia and 68 percent in Europe.
China has expressed its support for the AfCFTA and has said it is willing to cooperate with Africa on infrastructure, digital economy, green development, and other areas that can enhance the continent’s integration and competitiveness. China has also said it is ready to align its Belt and Road Initiative with the AfCFTA and to explore new forms of cooperation, such as e-commerce, health care, and education.
Experts say that China and Africa have a lot to gain from deepening their trade and investment ties, as they share common interests and aspirations for development. They also say that China and Africa can learn from each other’s experiences and best practices, and can jointly contribute to the global recovery and stability.
Source: MSN
