On November 29, the eighth Ministerial Assembly of the Discussion board on China-Africa Cooperation (FOCAC) commenced within the Senegalese capital of Dakar. In current remarks, Wu Peng, the director common of the Division of African Affairs of China’s Ministry for Overseas Affairs, signaled that agricultural cooperation, together with elevated agricultural funding in Africa and elevated agricultural commerce, will likely be a central matter of negotiation in Dakar’s convention rooms. That is to be anticipated – the sector is the spine for 60 % of African financial actions.
Nonetheless, it’s not a brand new emphasis. Over the last two FOCAC conferences in 2015 and 2018, improved commerce of agricultural items was additionally a key space of debate, that includes not solely within the final result paperwork but in addition in speeches by a number of African heads of state. On the time, African governments had been aware that whereas China had launched a Obligation Free Quota Free market entry scheme (DFQF) in 2010 for Least Developed Nations (LDCs), this was not adequate. African LDCs should date seen greater than a tripling of agricultural exports to China since 2010 – reaching $2.4 billion in 2020 – however whole African merchandise from all sectors nonetheless account for beneath 4 % of China’s commerce. And the view from China was that diversification of merchandise from completely different international locations and areas may effectively be in China’s meals and nationwide safety pursuits.
So how have China’s agricultural imports from Africa modified since 2018? Have the commitments made by China in 2018 to open up its markets – corresponding to for brand new expos and commerce gala’s – been profitable, or at the very least indicated cause for optimism from the African perspective?
First, the context. In mixture, annual figures for Africa-China commerce dropped over the interval 2018-2020, however then rose to a file breaking $139.1 billion within the first seven months of 2021. Commerce for this yr is predicted to rapidly surpass 2020’s determine of $186 billion. As Wu identified, this has included a each an absolute and relative improve in commerce in agricultural merchandise. China’s import of agricultural merchandise from Africa rose from 3 % to nearly 6 % of general Chinese language imports from the continent from 2018 to 2020.
Nonetheless, there are three caveats to this general progress.
First, the sorts of agricultural merchandise exported stay fairly restricted. The highest 5 classes of agricultural merchandise African international locations exported to China over 2018-2020 had been seeds and fruits, tobacco, edible fruits and nuts, cotton, and wool. Collectively these merchandise accounted for on common 83 % of whole Chinese language agricultural imports from Africa. Notably, these items will not be imported in large portions. Subsequently, whereas Wu accurately asserted that the import of agricultural merchandise corresponding to cotton and low doubled within the first seven months of 2021 in comparison with the identical interval in 2020, Chinese language imports of cotton accounted for simply 0.27 % of whole China imports from Africa, and low even much less.
Second, whereas general Africa’s LDCs provided 60 % of China’s whole agricultural imports from the continent in 2020 (an increase since 2010, when the proportion was 48 %), the important thing exporting international locations stay pretty restricted too. Simply three international locations – South Africa, Zimbabwe, and Sudan – accounted for nearly half of China’s whole agricultural imports from the continent between 2018-2020.
The third, and maybe essentially the most stunning, caveat is that China’s agricultural exports to Africa will not be far behind Africa’s agricultural exports to China. In 2020, Africa exported $4 billion value of agricultural items to China, whereas China despatched $3 billion value in the other way, together with cotton, espresso, tea, spices, and cereals. Whereas this stability has switched over the past 10 years (in 2009 China exported $1.5 billion value of agricultural items to Africa, and Africa despatched $1.15 billion value to China) there may be clearly a possibility for additional rebalancing.
So what does this imply for the forthcoming FOCAC? Some commentators have dismissed the 2015 and 2018 FOCAC classes, and more moderen makes an attempt by African leaders corresponding to Uganda’s Museveni to push for higher market entry to China. The view of those commentators is that African governments ought to both give attention to intra-Africa commerce, particularly given the newly operational African Continental Free Commerce Space (AfCFTA), or give attention to growing yields and home productive capability, or bettering requirements to make sure extra readiness for commerce. Their view is that any additional “demand-side” adjustments to Chinese language market entry – as an example a continent-wide preferential commerce space, the advice from two of my colleagues in a current SAIIA paper – will make little distinction.
Whereas these views are essential, the information above clearly present that it’s fallacious to dismiss market entry efforts. Market entry efforts have made a distinction, even simply over the past three years, and regardless of COVID-19 commerce disruptions. However maybe extra importantly, there is no such thing as a cause why market opening and native capability constructing can’t be carried out in tandem. The truth is, many African farmers argue that with out market entry, they’ve little incentive to put money into bettering capability.
Market entry is a crucial however not adequate situation for elevated exports from Africa to China, however the reverse shouldn’t be true. A number of African ambassadors in China, as an example, have made the case for extra and diversified agricultural exports from Africa to China, for items from espresso to avocados to sesame seeds, as a result of they’re always involved with bona fide African producers working arduous to promote their items into China.
So what does this imply for FOCAC 2021? Little question, African agricultural exports to China ought to stay a key agenda merchandise, with equal emphasis on each unlocking Chinese language demand and African provide. If that’s the case, many African farmers can anticipate vital new progress by 2024.
Commerce knowledge sourced from U.N. Comtrade and ITC Commerce Map.