10th August 2023
It has been widely acknowledged that since the late 2000s, China has become an increasingly prominent development partner for many African countries and since 2008 China has been Africa’s largest bilateral trading partner (still behind the EU as a region). However, what is also the case is there is an acute trade imbalance in China’s favour, as 40 out of 55 African countries have a trade deficit with China. Moreover, Africa’s trade with China is highly concentrated in primary products, with exports dominated by oil, ores, agricultural products and precious metals.
With a view to climbing value-chains, industrialising, distributing wealth amongst their citizens and creating sustainable economic growth, African leaders have been pushing trade up the agenda at the Forum of China-Africa Cooperation and in their general engagements with African partners. This push has resulted in the Chinese government pledging numerous financial packages and initiatives to boost and diversify Africa to China trade, including value-added trade.
These financial packages and initiatives – as well as economic growth on the African continent – have contributed to some noticeable diversification in Africa’s trade with China. Africa’s agricultural exports to China have increased from USD$ 1.39 billion in 2010 to USD$ 4.27 billion in 2020. Value addition exports, such as wine and coffee have grown in value and popularity in China, but also exports such as textiles and cosmetics (see Table 2 & 3) have also been steadily increasing since 2000 albeit with some dips during the Covid-19 pandemic. For example, African cosmetic and perfumery exports – from mainly Madagascar and South Africa – reached almost USD $10 million in 2020 up from almost nil in 2000.
Table 2 & 3: The Observatory of Economic Complexity (OEC)
Expos – like the CAETE – have the potential to accelerate and broaden such shifts. The CAETE is a biennial event co-organized by China’s Ministry of Commerce and Hunan’s provincial government. It is the only economic and trade cooperation platform under the mechanism of FOCAC and serves as an important platform to deepen China-Africa economic and trade ties.
Through our flagship program Africa Reimagined, we have exhibited at each CAETE since its inauguration in 2019, in 2021 – to create a space for some of Africa’s most innovative and famous brands to introduce their products to and succeed in the Chinese market.
The good news is that we have seen over the three CAETEs to date a progressive shift away from a focus on displaying agricultural, unbranded products, such as raw coffee beans, dashikis, and jembes – which were more prominent in 2019 – towards high-quality, well-branded wine, roasted coffee and skincare products. Our own 100sqm booth featured some of these as well.
We’ve also seen a general increase in exhibitors, attendees, professional visitors and value of signed projects from previous years, which suggests there is a greater demand for and knowledge of African products in the Chinese market amongst both Chinese consumers and businesses. We were reportedly amongst 1500 exhibitors – a 70% increase from the previous CAETE in 2021, and with the overall visitor count surpassing 100,000, we saw our booth regularly extremely packed! Furthermore, a total of 120 projects were signed, amounting to US $10.3 billion in value. 99 cooperation projects were unveiled, totaling US $8.7 billion.
However, more can still be done.
In particular, most of the professional visitors that attended the third CAETE were seeking food and beverage products and little to none were focused on fashion, jewellery and retail given this a newly emerging sector for the Chinese market. It was therefore significant that this year’s CAETE also included forums and displays for textiles and hosted a fashion show – which several of our brands participated in. This indicates that there is interest to diversify the types of African products entering the Chinese market. More could certainly be done by the Chinese or African governments to expand the types of African goods entering China.
Hopefully, the next CAETE in 2025 will be bigger and better than ever, but most importantly, focused on a greater array of value-added products. Now that will be really disruptive.
If you are interested in working with our clients or if you are brand interested in entering the Chinese market, then please contact us below or explore our website to learn more.