China has implemented a significant trade move this week by offering zero-tariff access to products from Africa’s least developed countries (LDCs), coinciding with US President Joe Biden’s visit to Angola. This new policy could reshape trade dynamics as China and the United States vie for influence across the continent.
China strengthens economic ties with Africa
The recent decision by China to extend zero tariffs on a wider range of goods from Africa’s LDCs is a major step in solidifying its economic ties with the continent. According to a senior Chinese diplomat, this new initiative took effect just as Biden embarked on his first visit to sub-Saharan Africa. This development comes amid ongoing competition between China and the US for Africa’s resources and markets, with each country seeking to expand its influence.
While China initially began offering zero tariffs in 2005, this expansion includes 140 additional products, including staples like rice, wheat, sugar, cotton, and paper. The move is seen as part of China’s broader pivot from large-scale lending to an emphasis on trade and investment, a strategy it introduced in 2021. This shift follows concerns over debt defaults by African nations, such as Zambia in 2020.
Biden’s visit vs. China’s strategic shift
The timing of China’s tariff reduction coincides with US President Biden’s visit, during which he reaffirmed America’s commitment to being ‘all in on Africa.’ His statements were part of a broader push to enhance US influence on the continent. However, China’s deep involvement in African trade, particularly its Belt and Road Initiative, continues to challenge the US’s efforts to gain a foothold.
China’s economic engagement in Africa has been extensive, involving billions of dollars in investment and infrastructure projects. But following some defaults on loans, Beijing has adapted its strategy, focusing more on trade and direct investments. This shift marks a more sustainable approach for China, which is now aiming to strengthen its relationships through tariff-free access and greater trade volume, rather than simply relying on loans.
China’s expanding role in African trade
The newly implemented zero-tariff access adds to China’s already dominant position as a key export destination for African nations. In 2022, China was the top export partner for Africa’s developing economies, with exports totalling $101 billion, far surpassing other major economies like Italy, India, and Spain. This growing trade flow reinforces China’s position as a central player in the continent’s economic future.
Critics, however, argue that China’s relationship with Africa remains extractive, with many African countries primarily exporting raw materials such as oil, copper, and cobalt, while importing finished goods from China. Despite these concerns, Beijing has worked to present itself as a more reliable and consistent partner than other foreign powers, emphasising its commitment to following through on promises made to African governments.
US, China, and the future of Africa
As the US continues to seek ways to bolster its influence in Africa, Beijing’s move to remove tariffs from African products could make it even more attractive to African nations looking for better trade terms. Development Reimagined’s Chief Executive, Hannah Ryder, commented on China’s new policy, stating that it could enhance China’s appeal in comparison to other development partners, particularly by demonstrating its follow-through on promises.
‘’Follow through of promises’ is something the Chinese government is keen to emphasise that it does when it comes to Africa, in some cases, in comparison to other development partners,’ Ryder told Reuters.
However, while China’s approach may appear to offer significant benefits, it still raises questions about the balance of power in trade. Many critics argue that the terms of China’s engagement with Africa continue to favour Beijing, reinforcing its control over critical resources while limiting the diversification of trade on the continent.
The introduction of zero-tariff access for Africa’s LDCs reflects China’s continued strategic shift in its dealings with the continent, just as President Biden’s visit highlights the growing rivalry between the US and China in Africa. As Africa’s trade landscape continues to evolve, both nations will need to demonstrate a long-term commitment to equitable and sustainable development in order to build lasting relationships with African countries.
Credit: Reuters
