Thirty-three of Africa’s “least-developed countries” (LDCs) are now able to export goods duty free into Chinese markets, but the policy is unlikely to have a significant impact since large commodities such as oil and minerals are already exported to China, according to a new analysis.
The zero-tariff policy took effect this month, fulfilling a pledge made by Chinese President Xi Jinping at the Forum on China–Africa Cooperation (FOCAC) summit in September.
The export policy is based on a 2003 scheme that originally allowed 190 tariff-free products from dozens of mostly resource-rich African countries such as Angola, the Democratic Republic of Congo (DRC), Zambia, Mauritania and Guinea – countries that have primarily exported unprocessed commodities such as crude oil and minerals, including critical minerals like cobalt, copper and lithium which are essential for products like electric vehicle batteries.
But Beijing has sought to increase imports of agricultural goods. At the 2021 FOCAC summit, China unveiled “green lanes” to fast-track customs procedures for African agricultural products to help diversify China-Africa trade. At a Brics summit in Johannesburg in August last year, China agreed to expand its list of African imports to include coffee, avocados, soybeans, pineapples, chillies, cashews, sesame seeds, spices and seafood.
About 140 products, including rice, wheat, sugar, cotton, tobacco and wood products, are now being imported by China from Africa, according to Beijing-based consultancy Development Reimagined. “It’s a big leap forward for trade coverage,” the consultancy said in a study released last week.
But the study has also revealed imbalances. From 2005, zero-tariff exports to China from 27 African LDCs totalled US$578 billion, accounting for 99 per cent of total LDC exports. But in the same period, non-beneficiary African countries exported US$771 billion worth of products – showing that tariffs were not the only factors driving export growth to China, according to Development Reimagined.
The study also showed that China’s tariff-free arrangements have grown the amount of low-value, unprocessed exports from resource-rich countries. For instance, Angola’s zero-tariff exports to China increased at an annual average of US$21 billion between 2005 and 2022 while the DRC’s rose by US$4 billion. Zambia’s average annual exports to China grew by US$2 billion and Mauritania’s by almost US$1 billion.
“To truly benefit, African LDCs need more manufacturing and processing capacity to export value-added goods. Zero tariffs alone will not solve this,” Development Reimagined said in its study, adding that in 2023, just five countries – Angola, the DRC, Zambia, Mauritania and Guinea – accounted for 70 per cent of Africa’s exports to China, most of it minerals and oil.
Several more African countries are now eligible for zero-tariff exports to China, however the types of products they can ship are relatively low in value.
“While China’s zero-tariff pledge isn’t entirely new, it sets the stage for Africa to diversify and strengthen its trade with China. If expanded to all African countries under AfCFTA (African Continental Free Trade Area) the impact could be transformative,” Development Reimagined said.
Development Reimagined said China’s zero-tariff policy has opened doors for African countries to export more to China, but it will be Beijing’s investment and supportive trade measures that meaningfully shift Africa’s exports from primarily unprocessed to processed exports.
On Friday, Chinese foreign ministry spokesman Lin Jian said Beijing’s zero-tariff arrangements would give African products “more convenient and faster access to China’s big market”, and boost Africa’s industrial development and employment while helping to reduce poverty.
Aside from the zero-tariffs, China has also expanded the “green lanes” for African agricultural products and was helping African companies to participate in major expos, such as the China International Import Expo and the China International Supply Chain Expo.
“There is always vast space for African brothers in China’s effort to expand high-standard opening up, and China will never be absent from Africa’s pursuit of development and revitalisation,” Lin said.
Mandira Bagwandeen, a lecturer in the political science department at Stellenbosch University in South Africa, said China’s zero-tariff policy presents an opportunity for African LDCs to tap into the massive Chinese market. “The removal of tariffs will help African products gain more traction in the Chinese market and increase their competitiveness, which is likely to increase export opportunities for African LDCs,” Bagwandeen said.
The policy encourages export diversification, reducing reliance on only a few commodities, and will play a key role in addressing China-Africa trade imbalances, she said.
“Given that African LDCs have low industrial agriculture levels, they may face challenges in meeting the quality and quantity requirements of the Chinese markets,” Bagwandeen said.
However, Lauren Johnston, a China-Africa specialist and associate professor at the University of Sydney’s China Studies Centre, said China’s zero-tariff policy for African LDCs was likely to have marginal impact overall.
“I doubt that the tariff was the biggest trade impediment for many LDCs in exporting to China,” Johnston said, citing Australia, which also offers duty-free access to LDCs but has not turned those countries into export powerhouses.
“China may be a different market, and provide different opportunities, however,” Johnston said.