Africa poised to leverage China's vast consumer market potential

In a major effort aimed at deepening economic ties with Africa, China announced recently that it will grant duty-free access to 100 percent of products originating from 33 African countries.

The sweeping elimination of tariffs is expected to significantly lower the cost barriers for African goods entering the Chinese market and enhance their overall price competitiveness, thus allowing African exporters to more effectively leverage the vast opportunities of the Chinese consumer market, experts said.

This expansion of preferential trade policies builds on previous commitments made by China. In 2009, the nation said it would provide 95 percent tariff-free access for products from the least developed African countries that have formal diplomatic ties with China, in a well-paced manner. In 2010, China started to apply zero tariffs on 60 percent of all goods from these African nations.

"By opening up our markets and eliminating tariffs on all products from these least developed African countries, we aim to further catalyze industrialization and prosperity in Africa through enhanced trade," said Ye Hailin, dean of the China-Africa Institute at the Chinese Academy of Social Sciences.

In particular, the two sides have agreed to expand market access for African agricultural products, and deepen collaboration in e-commerce.

China's imports of agricultural items from Africa have seen a sustained increase, with the value of such imports rising for the seventh consecutive year, Customs data show.

In the first seven months of this year, China imported 25.35 billion yuan ($3.58 billion) worth of agricultural products from Africa, a 7.2 percent increase compared to the same period last year. This growth rate outpaced the overall increase in China's agricultural imports, according to the General Administration of Customs.

The rapid growth of cross-border e-commerce platforms is opening up new sales channels for African agricultural products seeking to enter the Chinese market, Ye said.

However, in contrast to the well-established e-commerce landscapes of Europe and North America, Africa's online retail market remains relatively underdeveloped, Ye added.

As Africa's urbanization process accelerates, growing domestic consumer demand, improved logistics infrastructure and increasing acceptance of e-commerce are converging to boost cross-border trade, Ye said.

Meanwhile, China is willing to work with African partners to sign a framework agreement on a comprehensive strategic cooperative partnership. This would provide long-term, stable, and predictable institutional guarantees for trade and investment between China and the continent.

Trade between China and Africa reached a historic high of $282 billion in 2023, representing a 1.5 percent increase from the previous year, said the Ministry of Commerce.

While the total volume of trade between China and Africa has continued to grow, the imbalance in the bilateral trade structure remains an obstacle for sustained growth, said Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

Many African nations still primarily export raw materials and unprocessed commodities, while relying on imported industrial finished goods from China, a dynamic that may result in trade deficits for these countries, Mei said.

China's imports of nuts, vegetables and flowers from Africa saw remarkable growth in 2023, with the respective categories increasing by 130 percent, 32 percent, and 14 percent year-over-year, according to Customs data.

At the same time, electromechanical products emerged as China's top exports to the African continent, while shipments of new energy vehicles, lithium-ion batteries and photovoltaic products witnessed growth of 291 percent, 109 percent and 57 percent, respectively, compared to the previous year.

The move to grant zero-tariff treatment to imports from the least developed countries in Africa is expected to foster a more balanced and mutually beneficial trading environment, said Wang Zhimin, a researcher at the Academy of China Open Economy Studies, which is part of the University of International Business and Economics.

The zero-tariff initiative is also seen as an important gesture of South-South cooperation and China's willingness to use its economic clout to support the development priorities of the Global South, Wang added.