Africa: China removes customs duties from 9 African countries
China has removed tariffs on 98% of products imported from 9 of Africa’s poorest countries. Experts believe that the measure will have a little Economic impact. However, China’s image could improve.
The new tariff policy, which came into effect on September 1, applies to mining and agricultural imports from Chad, the Central African Republic (CAR), Eritrea, Djibouti, Mozambique, Guinea, from Rwanda, Togo and Sudan.
A few Asian countries have joined the program.
- China has removed tariffs on 98% of goods imported from 9 of Africa’s poorest countries
- Xi said at the time that the goal was to increase mainland imports to 300 billion US dollars (302 billion euros) over the next three years, eventually reaching 300 billion US dollars a year from here 2035.
- Agriculture and food purchases to China from African countries reached $161 billion in 2020, accounting for 2.6% of China’s total imports
This follows Chinese President Xi Jinping’s statement at the China-Africa Summit held in 2021 that steps would be taken to increase agricultural imports from Africa.
Xi said at the time that the goal was to increase mainland imports to $300 billion (302 billion euros) over the next three years, eventually reaching $300 billion a year by 2035. .
Africa, which continues to export raw materials to China, accounts for only a small part of Chinese imports.
China’s agricultural and food purchases from African countries managed to reach US$161 billion in 2020, accounting for 2.6% of China’s total imports.
African countries continue to run up debt
According to Mozambican economist Joao Mosca of the NGO Observatory of the Rural Environment (OMR), the new tariff regime will have “essentially no effect on Mozambique’s economy”.
He adds that his country still depends on imported food products and will do so for a long time because it does not have the capacity to export significantly.
Mozambique’s largest individual creditor and third largest trading partner is China. However, trade is largely one-way, hurting Mozambique’s combined balance of payments. According to Mosca, removing tariff barriers will not help Maputo’s deficits or debt.
However, Beijing is increasingly interested in raw materials from Mozambique. China recently partnered with South Korea on a joint natural gas exploration project in Cabo Delgado province’s Rovuma Basin, which is now expected to begin production in 2024.
Observers see the August deal as an indication that China may want to fully join the global race for Mozambican gas.
China’s demand for African commodities
“China has become very dependent on African energy and minerals, such as cobalt and coal, which are needed for cutting-edge technologies,” said Chenshen Yen, an Africa policy expert at National Chengchi University in Taiwan. .
“I believe such a measure will also help China acquire so many raw materials and simplify the process of bringing African mineral resources to China,” he added.
According to Harry Verhoeven, senior fellow at Columbia University’s Center on Global Energy Policy, eliminating tariffs on Africa’s mineral exports to China will not significantly increase the already massive flows of continent to East Asia.
“In most cases, they’ll just lower the cost for Chinese importers to do just that,” he said.
However, Verhoeven sees a potential advantage for poor African countries in terms of manufactured goods.
“There is some evidence to suggest that China’s tariff reduction has encouraged a diversification of African exports,” he said.
Economic potential of agriculture in Africa
Agriculture bets could benefit both parties in future trade relations. After all, China is the world’s largest food importer and the agricultural sector is the main employer and engine of economic growth on the continent. Africa has 60% of the world’s uncultivated agricultural land.
“From Mozambique to the Horn of Africa, China is focusing on reserving territories for agricultural production in the entire African Indian Ocean zone,” the Mosca researcher said.
China has a legitimate interest in Africa’s development due to its need to feed a growing population, focus on high-tech industries and its desire to expand its market.
China is another possibility
However, according to a report by Mosca, a former Chinese leader allegedly told the Prime Minister of Mozambique that Beijing “is committed to industrializing Africa over the next 100 years”. The expert warned that it was about exporting highly polluting industries, for which China is currently under constant scrutiny.
However, it is important to consider the short-term geopolitical positioning when evaluating the measures announced by Beijing.
This is true, especially in light of the conflicting loyalties that many African states are currently experiencing due to the conflict in Ukraine. According to Mosca, China is trying to take advantage of this.
China is telling the world that there is a solution to its long-standing dependence on the United States and other European nations, the man said.