China-Africa Trade: from China and Africa’s Global Trade Perspectives

Ming LIANG *

For the past few years, economic and trade relationship between China and Africa has achieved great development under their joint efforts. The continuous rapid growth indicates that both sides are willing to actively promote their mutually beneficial trade cooperation. Since the founding of the People’s Republic of China, there were only 3 countries-Egypt, Morocco and Tunisia signed intergovernmental trade agreement with Chinain 1950s, but the country number had increased to 13 in 1960s, continuously 46 in 1987 and 50 in 1999. In 2006, representatives from 53 African countries all attend the third China-Africa Economic Cooperation Forum, and in late of this year, China had overtook France thus become as Africa’s second largest trading partner after United States. By the end of 1999, China had signed trade agreement with 45 African countries, investment protection agreement with 31 countries, voidance of double taxation agreement with 10 countries, and also the economic and trade joint commission had been established by China and 44 African countries.[①]

As a responsible developing country, China plays as a leading role among the trade ties between emerging countries and African countries. However, it also triggered a hot discussion on China-Africa economic cooperation, in the international community, debates and various comments focused on China-Africa trade growth are increasing. A viewpoint has been that China is now repeating an old road once taken by traditional colonists, with the aim to exploit African natural resources. Also a view goes that cooperation between Africa and China is based on their comparative advantages, since China has provided appropriated technology and much-needed capital for Africa to improve its development. It is notable that there is few criticism on the cooperation between China and Latin America, Russiaor other areas else, but only when it comes to China-Africa economic relationship, wildly criticisms come up, this is an incomprehensive question.

In order to draw a relatively objective conclusion, it’s not proper to just adopt one-sided macroanalysis toward China-Africa trade. We should make a comparative analysis that combining China and Africa’s different foreign trade situation with entire global trade background, thus to get a rather objective cognition.

I. China and Africa’s global trade

Since the early stage of 1980s, both China and Africa’s foreign trade have shown a rather obviously rising trend. From 1984 to 2008, China’s total trade, export and import volume respectively rose from $51.06 billion, $24.87 billion, and $26.19 billion in 1984 to $2563.26 billion, $1430.70 billion and $1132.57 billion in 2008, and the average annual growth rate respectively came at 17.72%, 18.39% and 17.00%. In 2009, due to the influence of global financial crisis, China’s total trade, export and import volume respectively dropped to $2207.20 billion, $1201.65 billion and $1005.56 billion. Meanwhile, Africa’s total trade, export and import volume respectively rose from $106.71 billion, $52.05 billion, and $54.67 billion in 1984 to $759.94 billion, $368.32 billion and $391.62 billion in 2008, reflecting an average annual growth rate of 8.52%, 8.49% and 8.55%. In 2009, Africa’s foreign trade also obviously decreased, and its total trade, export and import volume respectively dropped to $489.62 billion, $225.65 billion, and $263.97 billion. From general global trade perspective, it can be seen that although both Africa’s absolute scale and its growth rate are less than China, the two countries show a same trend with a highly rising rate.

It is worth while pointing out Chinaand Africa’s trade balance situations are different in the global trading system. China recorded trade deficit of $1.31billion in 1984 while trade surplus of $298.1billion in 2008, and its surplus narrowed to $196.09 billion in 2009. For Africa, its trade deficit widened from $2.62 billion in 1984 to $38.32 billion in 2009, with the average annual growth rate of 11.34%. To some extent, Africa’s continuous trade deficit has impacted on its development. How to narrow its widening trade deficit and keep trade balance becomes an unavoidable problem for Africa in the further time.

Figure 1 China and Africa’s trade in the world, 1984-2009

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II. China-Africa total trade

Although Chinaand Africa are separated by geographic location, their exchange can go back to the ancient times. After the founding of People’s Republic of China, the independence of African countries has brought even closer bilateral ties. As China had a weak economic foundation at its starting stage, economic cooperation between China and Africa remained much stagnant than their political exchange, and unilateral aid from Chinato Africa became as the main cooperation mode. After 1990s, especially in the new era of 21 ^st century, as Chinaexperienced rapidly economic growth, China-Africa relationship has achieved sharp advanced development, and cooperation between the two sides increasingly came to economic area.  In 2000, the first Forum on China-Africa Cooperation (FOCAC) was successfully held, which means an all-round cooperation between Chinaand Africa began to advance. Gradually, China-Africa relationship undergoes steady development along with a deepening and widening cooperation. According to statistics, China-Africa trade reached at $12.14 million in 1950 and $166.45 million in 1990. It developed fast after 1990s, the total trade volume increased to $6.48 billion in 1999, which is 533 times than 50 years ago. Since the 21^st century, China-Africa economic relationship is even much closer under the cooperation forum frame. The total trade came at $10.60 billion in 2000, and was up to $55.46 billion in 2006 and $73.31billion in 2007. In 2008, it surged to $106.84 billion and even got a historic high at $126.91 billion in 2010. From 2000 to 2010, its average annual growth rate came up to 28.18%.

1. China-Africa trade: from Africa’s perspective

From Africa’s foreign trade perspective, we found that China is playing a greater role of Africa’s trading partner, which stands in sharp contrast to other economies in the world.  

As we can see in Figure 2 and 3, although EU has been Africa’s largest partner, its share of Africa’s trade is gradually decreasing. In 1990, Africa’s export to EU reached at $32.06 billion, accounting for 68.10% of Africa’s total export. In 2009, although Africa’s export to EU increased to $82.11 billion, its share reduced 31.71% and came at 36.39%. As Africa’s second largest export partner, U.S.took a rather steady share of Africa’s export. In 1990, Africa’s export to U.S.was $5.06 billion, accounting for 10.74%, and then its uptrend became weak. In 2006, Africa’s export to U.S.was $12.23 billion, with share of 20.44%. From 2007, Africa’s export to U.S. began to decline. Its share dropped to 13.81% in 2009, increasing by 3.07% in total over 19 years. As an important trading partner of Africa, France’s share of Africa’s foreign trade was also gradually declined. Although Africa’s export to France increased from $7.58 billion in 1990 to $17.94 billion in 2009, its share narrowed from 16.10% to 7.95%.

On the contrary, Chinais playing a bigger role as an Africa trading partner. Africa’s export to Chinawas up from merely $13 million in 1990 to $14.95 billion in 2009, and its share added 6.35% in total, surging from 0.27% to 6.62%.

Figure 2 Distribution of Africa's exports among the major blocs, 1990-2009

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While looking from Africa’s import perspective, it shows a same trend. In 1990, Africa’s import from EU reached at $27.83 billion, accounting for 57.2% of Africa’s total import. In 2009, although Africa’s import from EU increased to $92.87 billion, its share reduced 22.06% and came at 35.18%. Africa’s import from U.S.increased from $3.94 billion in 1990 to $15.03 billion in 2009, but its share was down from 8.09% to 5.69%, decreasing by 2.40%. Africa’s import from Franceincreased from $8.79 billion in 1990 to $23.06 billion in 2009, while its share reduced 9.33%, decreasing from 18.07% to 8.74%.

In an obvious contrast to it, China’s trade with Africais rather fast. In 1990, Africa’s import from China was up from $533 million in 1990 to $30.47 billion in 2009, and its share added 1.45% in total, surging from 1.10% to 11.54%.

Figure 3 Distribution of Africa's imports among the major blocs, 1990-2009

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2. China-Africa trade: from China’s perspective

Looking from China’s perspective, Africa takes rather small share in China’s total trade, but there is a tendency to increase year by year.

From perspective of import, China’s import from the rest of world was $53.35 billion in 1990, and Africa took share of 0.69% merely totaling $368 million. In 2009, China’s total import was $1005.56 billion, and Africa’s share increased by 3.62%, which was up to 4.31% totaling at $43.44 billion. From perspective of export, China’s total export was up from $62.09 billion in 1990 to $1201.65 billion in 2009, export to Africa increased from $692 million to $47.64 billion, with its share from 1.11% to 3.96%, adding 2.85% in total over 19 years. Although Africa takes small share of China’s total trade, its uptrend is obvious.

Figure 4 Africa’s share in total Chinese exports and imports (%)

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Source: UN COMETRADE and author calculations.

III. China-Africa trade by country group

China’s trading partners of Africa are comparatively concentrated. In 2009, among the total volume that China exported to Africa, the top 10 African countries accounted for 71.76%, and from import aspect, the share even reached at 88.33%. It shows the trading partners’ concentration is rather obvious.

1. Trade between Chinaand African countries

From China’s export perspective, its export to Africa mainly concentrates on South Africa, Nigeria, Egypt, Algeria, Angola, Moroccoand so on, indicating an evident central tendency. The 10 top African countries that China exporting to took share of China’s total export to Africa from 71.08% in 2000 to 71.76 % in 2009, adding 0.68% over 9 years.

Looking from regional distribution, among total volume that Chinaexporting to Africa, China’s biggest export destination-South Africa took share of 20.24% in 2000 and was down to 15.46% in 2009, reducing 4.78% in total. China’s second biggest exporting destination-Nigeria was up from 10.96% in 2000 to 11.49% in 2009, adding 0.53% in total. The third biggest exporting destination-Egypt was down from 16.08% in 2000 to 10.72% in 2009, reducing 5.36% in total. The forth biggest exporting destination-Algeria was up from 3.45% in 2000 to 8.78% in 2009, adding 5.32% in total. The fifth exporting destination-Angola was up from 0.67% in 2000 to 5.01% in 2009, adding 4.33% in total.

Figure 5 China’s exports to its top 10 African partners, as share of total (%)

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Source: UN COMETRADE and author calculations.

From China’s import perspective, its import from Africa mainly concentrates on Angola, South Africa, Sudan, Libya, Congo-Brazzaville and so on. The 10 top African countries that China importing from took share of China’s total import from Africafrom 84.32% in 2000 to 88.33 % in 2009, adding 4.01% over 9 years and there is still an uptrend.

Looking from regional distribution, among total volume that Chinaimported from Africa, China’s biggest import destination-Angola took share of 33.17% in 2000 and up to 33.87% in 2009, adding 0.70% in total, indicating a weak uptrend. China’s second biggest importing destination-South Africa was up from 18.67% in 2000 to 20.06% in 2009, adding 1.39% in total. The third biggest importing destination-Sudan was down from 13.17% in 2000 to 10.81% in 2009, reducing2.36% in total. The forth biggest importing destination-Libya was up from 0.45% in 2000 to 7.32% in 2009, adding 6.87% in total, showing a rather bigger increasing scope. The fifth importing destination-Congo-Brazzaville was down from 5.83% in 2000 to 4.01% in 2009, reducing 1.81% in total.

Figure 6 China’s imports from its top 10 African partners, as share of total (%)

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Source: UN COMETRADE and author calculations.

2. Trade balance between Chinaand African countries

The trading imbalance between China and African countries is rather serious. The ten top African countries that having trade surplus with China are Angola ($12.29 billion), Sudan ($2.98 billion), Congo-Brazzaville ($1.37 billion), South Africa ($1.33 billion), Libya ($1.17 billion), Zambia ($1.12 billion), Congo, Rep ($815 million), Equatorial Guinea ($697 million), Mauritania ($612 million) and Gabon ($559 million).

The ten top African countries that having trade deficit with China are Nigeria($4.58 billion), Egypt($4.36 billion), Algeria($3.23 billion), Liberia($1.88 billion), Benin($1.86 billion), Morocco($1.76 billion), Ghana($1.45 billion), Kenya($1.25 billion), Togo($1.09 billion) and Ethiopia($1.04 billion).

It is worthy to point out that, among the 10 top trade surplus countries with China, Angola, Sudan, Congo-Brazzaville, Libya, Equatorial Guinea and Gabon are all important oil producing countries. Nevertheless, among trade deficit countries with China, except Nigeria, Algeria and Egypt, all countries are not oil exporting countries. Petroleum-based energy commodities still show a comparative advantage and take significant role in Africa’s foreign trade. Whether a country is of an energy-rich one decides its trade balance situation.

Figure 7 Africa-China balance of trade, 2009 (10 leading surpluses and 10 leading deficits)

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Source: UN COMETRADE and author calculations.

IV. China-Africa trade by commodity group

Commodity trade between China and African countries is a reflection of their comparative advantages. Africa’s exporting mode of resources-oriented is not only for China, but suitable for all countries in the world. Likewise, Chinaalso has its global import-export pattern, without special trading strategy towards Africa.

1. Africa’s commodity trade with China

Looking from Africa’s commodities to China, it shows that Africa’s commodity pattern for Chinais basic similar with its general situation towards the world. Africa’s resources-oriented export is out of its resources advantage, not a kind of inclination to China.

From Africa’s commodity exporting perspective, what Africa mainly export to China are fossil fuel, lube oil and related materials, and manufactured goods classified by raw material group. In 2009, among Africa’s total commodities exporting to China, fossil fuel, lube oil and related raw material (SITC3) accounted for 50.20%, and the corresponding commodities which Africaexport to other countries in the world accounted for 48.34%, the proportions were almost near. From the second to tenth commodities that Africa exporting to China are respectively as follows: non-edible materials(SITC2) 31.73%, manufactured goods classified by raw material(SITC6) 13.40%, chemicals not other specified and related products(SITC5) 2.44%, machinery and transportation equipment(SITC7) 0.83%, beverage and tobacco(SITC1) 0.61%, food and live animals(SITC0) 0.49%, miscellaneous manufactured articles(SITC8) 0.18%, vegetable oils, animal fats and waxes(SITC4) 0.11%, and other commodities not otherwise specified(SITC9) 0.03%. Therefore, Africa’s commodity exporting situation towards China is nearly the same with other exporting destinations, which indicates no special case for China. The case with a bit special situation comes to non-edible materials, for China takes share of 31.73% while other exporting destinations of 5.66%, being over 26.07 percentage points.

Figure 8 Africa's exports by commodity group, as share of total, 2009 (%)

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Source: UN COMETRADE and author calculations.

From Africa’s commodity importing perspective, Africa’s import concentrates on machinery and transportation equipment and manufactured goods classified by raw material group. In 2009, above two commodities that Africa importing from China reached at $15.45 billion, share of 50.73% among Africa’s total import from China. Likewise, such two kinds of commodities from other areas of the world correspondingly accounted for 34.20%, totaling at $79.85 billion. Thus, there is no significant disparity of the share between China and other destinations. From the second to tenth commodities that Africa importing from China are respectively as follows: manufactured goods classified by raw material(SITC6) 22.17%, miscellaneous manufactured articles(SITC8) 15.45%, chemicals not other specified and related products(SITC5) 7.26%, food and live animals(SITC0) 0.65%, non-edible materials (SITC2) 0.58%, non-edible materials (SITC9) 0.32%, fossil fuel, lube oil and related materials(SITC1) 0.15%, vegetable oils, animal fats and waxes(SITC4) 0.04%. Therefore, Africa’s commodity importing pattern towards Chinais nearly the same with other importing destinations. A case with a bit special situation comes to machinery and transportation equipment, for China takes share of 50.73% while other importing destinations of 34.20%, being over 16.53 percentage points. 

Figure 9 Africa's imports by commodity group, as share of total, 2009 (%)

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Source: UN COMETRADE and author calculations.

2. China’s commodity trade with Africa

Looking from China’s commodity to Africa, it shows that China’s commodity pattern for Africa is basic similar with its general situation towards the world. Chinahasn’t made any special export policies towards Africa, nor doubts of intentionally dumping cheap manufactured goods into Africa.

From China’s commodity exporting perspective, it concentrates on machinery and transportation equipment (SITC7), miscellaneous manufactured articles (SITC8) and manufactured goods classified by raw material (SITC6). In 2009, among China’s total export to Africa, machinery and transportation equipment takes share of 41.68%, miscellaneous manufactured articles (SITC8) of 18.26% and manufactured goods classified by raw material (SITC6) of 30.56%. Among China’s total export to other areas of world, the shares are correspondingly 49.63% (7.95 percentage points higher than Africa), 24.99%, and 14.92%. Therefore, we can see China’s exporting pattern towards Africa is basically the same while towards to other areas of world.

Figure 10 China's exports by commodity group, as share of total, 2009 (%)

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Source: UN COMETRADE and author calculations.

From China’s commodity importing perspective, China’s import from Africa concentrates on fossil fuel, lube oil and related raw material (SITC3), non edible material (SITC2) and manufactured goods classified by raw material group (SITC6), they are respectively accounting  for 64.37%, 18.80% and11.32% of China’s total import from Africa, which corresponds to Africa’s commodity exporting pattern (Figure 8). It’s not hard to realize that, since Africa’s industrial system is defective, its comparative advantages focuses on resources, energy and raw materials. However, whether look from its absolute amount or share, Chinahas got much smaller energy and resources from Africa than developed countries of Europe and America, (see Chapter Five-The situation of Africa’s resources export).

Figure 11 China's imports by commodity group, as share of total, 2009 (%)

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Source: UN COMETRADE and author calculations.

Looking from Figure 11, China imported obviously much fossil fuel, lube oil and related raw material from Africa than from other areas of the world. Among products of SITC3 that China importing from Africa, crude oils accounts for the most. We had made a research on the situation of the major crude oil importers’ getting oil from Africa, as seen in Figure 12, among total crude oil importing situation of each country, Brazil and France’s oil importing from Africa were respectively up from 3.52% and 27.88% in 1992 to 71.41% and 32.88% in 2009, adding respectively 67.89 and 5.00 percentage points. China’s crude oil importing from Africa took less share, up from 4.49% in 1992 to 30.39, adding 25.90%. China’s share is far less than Braziland France, followed closed by Canada (28.12%), U.S. (23.49%) and EU (23.02), without a big discrepancy.

Figure 12 Main blocs’ crude oil imports from Africa, as share of total (%)

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Source: UN COMETRADE and author calculations.

V. Africa’s mineral resources export

In order to further analyze Africa’s commodities exporting pattern, we comes to the situation of regional distribution of exporting oil[②] , nonmetallic mineral[③] , metal ore and metal particle[④] .

Looking from Africa’s rude oil exporting, U.S. and EU take as Africa’s first export destinations, while China takes very small share by contrast. In 2007, U.S. had a highest record of 44.08% share of Africa’s crude oil export while EU had a highest record of 42.5% in 2004. On the contrary, China took a rather small share with 0.61%-1.19% from the year of 2000 to 2006. Although China gradually took a higher share since 2007, its biggest record only came at 10.07% in 2009.

The share of Africa’s crude oil exporting to China is nearly the same with the developed countries such as Canada and France, and the emerging countries such as Braziland India. Africa’s resources-oriented exporting mode has a global feature, and its export of crude oil is also a reflection of the comparative advantage on natural resources. Thus, there isn’t a special inclination towards China.

Figure 13 Africa’s crude oil exports to its main partners, as share of total (%)

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Source: UN COMETRADE and author calculations.

Looking from Africa’s nonmetallic mineral exporting, there are not big differences between China and other countries. In 2009, the share of Africa’s nonmetallic mineral exporting to Italy, UK, Belgium, U.S., Holland and China were respectively 9.86%, 7.51%, 5.78%, 5.67%, 4.88%, 3.88%, and 2.55%. China’s share was from 3.40% in 2000 to 3.88% in 2009, with a low growth adding merely 0.44% over 9 years.

Figure 14 Africa’s nonmetallic mineral exports to its main partners, as share of total (%)

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Source: UN COMETRADE and author calculations.

Looking from Africa’s metal ore and metal particle exporting perspective, since Africa reduced its export to EU, its export to Chinagoes into an uprising tendency year by year. From 2000 to 2009, Africa’s metal ore and metal particle export to EU was down from 53.06% to 16.26%, decreasing by 36.26 percentage points. For China, the share was up from 5.49% to 42.75%, increasing by 37.26 percentage points. For the other countries, there were not much big fluctuations of the share, but with a tendency of decline year by year.

Figure 15 Africa’s metal ore and metal particle exports to its main partners, as share of total (%)

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Source: UN COMETRADE and author calculations.

VI. China’s mineral resources import from Africa

China indeed takes a big share of mineral resources importing from Africa. According to the data through the way of SITC27+SITC28+SITC3, among China’s total import from Africa, the share of mineral resources import accounted for 84.21% in 2008, and the share decreased to 79.05% in 2009.

1. China’s mineral resources importing from Africa

Looking from table 1, among total import from Africa, Chinatakes a rather big share on mineral resources. In 2009, China’s total import from Africawas $43.33 billion, the share of energy and mineral resources together accounted for 79.05% totaling at $34.25 billion, among it, energy, metallic mineral and non metallic mineral were respectively of 63.36%, 14.31% and 0.37%.

Table 1 China’s oil and mineral imports from Africa (USD billion, %)