CIIE to balance Sino-African trade

By Benard Ayieko
0 Comment(s)Print E-mail ChinAfrica, November 14, 2022
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China hosted the fifth edition of the China International Import Expo (CIIE) on Nov. 5-10, under the theme "Stimulating Global Opening-up for Shared Opportunities of Cooperation and Development." The inaugural expo was held in 2018, and over the years it has become an annual event with massive positive impact on global trade. CIIE is a vital channel for countries and regions to carry out business activities, strengthen cooperation and promote common prosperity of the global economy. 

Held at the National Exhibition and Convention Centre (Shanghai), the CIIE is a clear demonstration that China, under the leadership of President Xi Jinping, is committed to shared market opportunities with other countries. The hosting of this year's event came at a time when the world is fighting the COVID-19 pandemic and its adverse economic impact on the global supply chains.  

Strategic pillar in Sino-African trade 

CIIE is a huge boost for African countries to rejig their exports and balance of payments, and spur economic growth and development. Many African countries are net importers with huge trade deficits; CIIE is a fertile ground for expanding their markets and partnership in value additions in order to access goods and services that are not available in the domestic market. The availability of these goods and services at competitive rates gives consumers greater choice, taste and preference for differentiated products. CIIE is not only a marketplace for goods and services at the international level, but also acts as a catalyst for competitive prices of goods and services in the domestic markets of many African countries. As a result, consumers are able to enjoy lower prices on goods and services.  

Five years since the launch of its first edition, CIIE has remained a strategic pillar in Sino-African trade relations. According to trade data from the General Administration of Customs of China, the trade between China and Africa grew from $186.97 billion in 2020 to $254.3 billion in 2021. This is a growth of 35.3% barely two years after the launch of the inaugural expo in 2018. In the first half of this year, the trade flows between China and Africa increased by 16.6% to reach $137.38 billion. During the same period, China's newly added investment to Africa hit $2.17 billion. An analysis of the trade items reveals that China is increasingly importing more agricultural products and manufactured goods from Africa since the advent of CIIE. Conversely, Africa imports from China manufactured goods such as clothing, electronics and electrical appliances and technology, among others. China's trade with Africa has grown 20-fold in the last two decades, while the trade deficit remains largely skewed in favour of China. 

In light of this trade imbalance, CIIE offers African countries an opportunity to increase its exports to China and other global markets. Angola, South Africa and the Democratic Republic of the Congo are some of the largest African exporters to China, while Egypt and Nigeria are big importers of Chinese products in Africa. With China's population of 1.4 billion people, CIIE offers African countries a huge market for their products. Naturally, by exhibiting their products, the awareness and demand for African products will swell in the Chinese market. 

Platform for made-in-Africa products 

CIIE offers Africa an opportunity to re-invent the wheel to reduce its trade deficit, not only with China, but also with other countries and regions in the world. This can be done by China importing goods directly from African countries as part of the $300-billion pledge by China at the Eighth Ministerial Conference of the Forum on China-Africa Cooperation held in November last year. 

For African countries, CIIE provides a platform for companies in Africa to display made-in-Africa products aimed at promoting their brands and finding more business partners, not just within Chinese companies, but also with exhibitors across the world. This is an opportunity to find niche markets in China for the non-traditional African exports. Botswana and Zambia are some of the African countries that have been at the forefront of pushing for this kind of economic cooperation with China. 

On the technological front, China is a key partner for Africa, particularly in manufacturing. Chinese technology is an asset for producing goods that are competitive in the international markets. China has advanced technology in the fields of science, engineering and information and communication technology that remains a crucial component in producing finished goods for exports. This technology will greatly stimulate the exploitation of idle raw materials and natural resources that play a key role in growing the gross domestic product of most African economies.  

Even though the language of business is universal, the interaction with Chinese companies (and by extension global exhibitors) at CIIE helps in reducing the linguistic tension and barrier that may act as an impediment to trade for African exporters. In this regard, the setting up of Confucius Institutes for teaching Africans how to speak and write in Mandarin has become a great enabler of trade - and interactions between Chinese and African businesspeople are expected to boost trade relations. 

The success of the previous editions of CIIE cannot be denied. Thus far, CIIE has opened up South Africa to the Chinese market as the first African country to export beef to China. Additionally, South Africa's exports of minerals, fruits, wine and marine products are on an upward trajectory. Ethiopia has expanded its coffee business into China through e-commerce. Kenya and Mozambique are making headway with agro-processed exports.  

CIIE guarantees market for African countries to introduce and re-launch new and existing brands in Chinese markets, in order to create and promote brand visibility, meet traders and sign commercial contracts aimed at expanding their business influence and networks on the international stage. CIIE has provided fast-growing economies like Kenya, Senegal, Cote d'Ivoire, Ethiopia, Rwanda and Ghana an opportunity to explore export opportunities in the Chinese market. By opening its markets to African countries, there is hope that the future editions of CIIE will rejuvenate and boost Africa's trade, not just with China, but with other countries and regions of the world.  

The writer is an economist, consultant and a regional commentator on trade and investment based in Nairobi, Kenya.

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