As the world’s second-largest economy, China remains an important trade partner for Africa. Yet, China’s current trade offer to Africa falls below expectations. While there is increasing uptake by African LDC eligible for China’s duty and quota free market access, China does not offer a generalised system of preferences. A preferential programme like that offered by the US’s AGOA should also be a key priority, especially given the fierce competition from Asian countries which have better market access arrangements with China.
China should rethink its engagement model with Africa. The Forum on China–Africa Cooperation offers an opportunity for collective diplomacy, but it does not provide an institutional framework for transparent monitoring of its outcomes. The trade promotion target to boost non-oil exports from Africa to £241.77 billion by 2024 also needs to be accompanied by investments in the industrial capabilities of African firms to produce value-added goods and the reduction of tariff and non-tariff barriers that currently inhibit market access.
African countries need to coordinate to design a coherent trade policy with China to overcome the bottlenecks for exports. African policymakers need to align a fully formulated industrial policy to the emerging investments in the manufacturing landscape from China. Production in China’s Economic and Trade Cooperation Zones (ETCZs) in several African countries should be aimed not only at global exports but also at the continent-wide market that is being created under the African Continental Free Trade Area (AfCFTA), providing a major boost to exports and intra-African supply and value chains. Policymakers have more agency to set their relationship boundaries with China, and while “keeping it casual” through informal bilateral arrangements may have taken precedent up until now, it’s time for trade policy engagement to ramp up a notch and “make things official”.
This blog draws on research from How Africa Trades published by LSE Press.
Photo credit: GovernmentZA used with permission CC BY-ND 2.0
