China has removed all tariffs on 98% of the goods imported from nine of Africa’s least-developed countries. Experts do not expect the measure to have an impact on African economies. But it could benefit China’s image.
According to the online version of the Hong Kong-based South China Morning Post the policy, which came into force on September 1, applies to agricultural and mineral imports from the Central African Republic (CAR), Chad, Djibouti, Eritrea, Guinea, Mozambique, Rwanda, Sudan and Togo, as well as several Asian countries.
It follows Chinese President Xi Jinping’s announcement at the China-Africa summit in November that steps would be taken to increase the import of agricultural products from Africa. Xi said at the time that the aim was to boost these imports from the continent to $300 (€302 billion) over the next three years, eventually reaching $300 billion a year by 2035.
Africa still primarily exports raw materials to China. In contrast, food and agriculture sales to China — which reached $161 billion in 2020 — represented only 2.6% of the latter’s import in the sector.
African nations keep accumulating debt
“China’s measures will have practically no effect on the Mozambican economy,” Mozambican economist Joao Mosca from the NGO Rural Environment Observatory (OMR) told DW. He went on to explain that his country still relies on on imported foodstuffs and will continue to do so for a very long time, with no capacity to export in a meaningful way.
China is Mozambique’s principal individual creditor and its third-most important trading partner. But trade is largely a one-way street, to the detriment of Mozambique’s overall balance of payments. The elimination of trade tariffs will not help reduce Maputo’s deficits or ease its debt, explained Mosca.
But Beijing has shown a growing interest in Mozambique’s commodities. Recently, China partnered with South Korea for a joint natural gas exploration in the Rovuma Basin in Cabo Delgado province, which is now set to start production in 2024. Observers saw the agreement signed in August as a sign that China may want to enter the international race for Mozambican gas at full tilt.
China needs Africa’s commodities
“China has become very dependent on African energy and minerals, including cobalt and coal, which are needed for high technology,” said Chenshen Yen, an expert in African politics at National Chengchi University in Taiwan.
“I believe that this measure will also help China acquire more raw materials and make it easier for African minerals to enter China,” he added.
Harry Verhoeven, a senior researcher at the Center on Global Energy Policy at Columbia University, told DW that scrapping tariffs on mineral exports from Africa to China will do little to further encourage already massive flows from the continent to East Asia.
“They will, in most cases, just make it cheaper for Chinese importers to do so,” he said.
Verhoeven does see a potential gain for the poorest African countries when it comes to manufactured goods, “as some evidence suggests that China’s lowering of tariffs has encouraged a diversification of exports from African states.”
Africa’s agriculture has economic potential
A bet on agriculture could benefit both sides in future trade relations. China is, after all, the world’s biggest food importer and the agricultural sector is the biggest employer and driver of economic activity on the African continent. 60% of the world’s uncultivated arable land is in Africa.
“In a very long-term perspective, China is interested in reserving land for food production in the entire African Indian Ocean area, from Mozambique to the Horn of Africa,” researcher Mosca explained.
With a growing population to feed and a plan to focus on high-tech industries — as well as finding new markets for its products — China has a genuine interest in Africa’s development.
China as an alternative choice
Mosca relayed a story, however, in which a former Chinese president told a Mozambican prime minister that Beijing “is set on industrializing Africa in the next 100 years.” That includes exporting highly polluting industries — for which China is now under permanent scrutiny, the expert warned.
In the short term, though, the measures announced by Beijing must be seen in the context of geopolitical positioning. This is especially true in light of the war in Ukraine, which has placed many African states in a dilemma of conflicting loyalties. Something which Beijing is seeking to capitalize on, explained Mosca.
“China is saying: ‘Look, there is an alternative to your age-old, traditional dependency on European countries and the US’.”
William Young contributed to this article
Edited by Ineke Mules