China cuts tariffs on African goods but is it enough to close the trade gap?
Analysts urge Beijing to invest in Africa’s industrial capacity to reduce its substantial trade deficit and create a more balanced relationship
African eels, frozen meat and rare earths now have one thing in common – at least in China.
The commodities are among a wide variety of products that can enter the country tariff-free as part of a policy to help redress the continent’s massive trade imbalance with China.
The schedule will remain in effect for two years, covering products as disparate as seafood and critical raw materials and minerals, including iron ore, manganese and rare earth metals.
Under the programme, cocoa from Ivory Coast and Ghana will no longer be subjected to tariffs up to 22 per cent, while Kenyan coffee will lose its 30 per cent duties and South African wine its 20 per cent tariff.
“After May 1, these products, provided they meet the relevant requirements for origin and inspection and quarantine, will enjoy zero tariffs,” China’s Ministry of Commerce said.
After two years, the arrangements are expected to transition into formal, long-term economic partnership agreements.
But observers say that eliminating tariffs alone will not help Africa’s unbalanced trade and its role as a raw-material exporter. China also needs to invest in the continent’s industrial capacity and ability to meet strict non-tariff barriers, they say.
For the moment, Africa exports mostly raw materials to China and imports Chinese processed goods and machinery.
Last year, trade between the two rose by 17.7 per cent to reach a historic US$348 billion but that volume was US$102 billion in China’s favour.
A surge in Chinese exports widened the trade deficit, highlighting a structural imbalance that African leaders hope to address through better regional integration.
That imbalance was highlighted last week when African ambassadors met with Chinese officials in Beijing to plan the May 1 launch of a trade preference initiative.
At a gathering organised by the African Union Permanent Mission to China, the envoys stressed that market access was an industrial policy issue and called for investment in trade-readiness programmes to help exporters meet Chinese standards.
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Mandira Bagwandeen, a lecturer at Stellenbosch University, said China’s zero-tariff policy expanded trade diplomacy but was unlikely to rebalance Africa’s trade deficit.
“Eliminating tariffs alone may not suffice to narrow the substantial trade gap,” she said, adding that Africa still exported raw materials and imported Chinese hi-tech goods.
“The enormous scale of Chinese industrial output suggests the trade deficit could continue or even widen unless there is a significant increase in the variety and volume of African goods that the Chinese middle class wants.”
The removal of duties, which were previously up to 25 per cent for countries such as South Africa, Nigeria and Kenya, provided a “clear financial incentive for African countries to process their minerals and agricultural products locally before export”, but challenges remained.
“African exporters must still overcome significant non-tariff barriers, including strict Chinese sanitary and phytosanitary standards and high logistics costs” to truly achieve an industrial transition.
Carlos Lopes, a professor at the University of Cape Town’s Nelson Mandela School of Public Governance, said that although zero-tariff access was politically significant, the structural trade imbalance remained the main challenge.
Barriers were already low but Africa continued to export raw materials and import manufactured goods, he said. “Removing tariffs does not in itself solve this structural problem,” Lopes argued, stressing that success depended on industrial capacity and infrastructure rather than just market access.
“Without that transformation, zero tariffs may simply facilitate larger volumes of the same commodities flowing out of the continent. In fact, there is a real risk that such measures reinforce the existing pattern of raw material exports rather than change it,” he added.
Lopes said Africa needed meaningful industrial support.
“Tariff preferences alone will not deliver that transformation,” he said, urging China to help build African industries that enabled value addition before exports, key to a more balanced trade relationship.