African countries suffer from the trade deficit with China, which has continued to swell. In 2023, the exports from China were in surplus by USD 63 billion, while the trade deficit in 2022 was USD 49 billion. In 2021, the trade deficit was USD 39 billion. These figures showed the gap between the exports between China and Africa has increased at a high rate.
Since China implemented the Belt Road Initiative, its trade with African countries has increased but it did not benefit the latter. In 2023, the overall trade grew by 1.5 percent year-on-year. However, African exports to China showed a decrease of 6.7 percent to USD 109 billion. On the other hand, Chinese exports to the continent grew by 7.5 percent USD 173 billion.
China has taken full advantage of the African Continental Free Trade Area (AfCFTA) platform and has imported only raw materials from African countries, said Linda Calabrese, senior research fellow at London-based ODI Global. “China has been Africa’s main trade partner for over a decade. Since 2012, most African imports come from China, and most of Africa’s exports go to China. But China has maintained a trade surplus since at least 2015,” she said.
This has caused distress among African nations. Uganda’s President Yoweri Museveni demanded China import finished products and not just cheaper raw materials. “China should open its market to African products, which will benefit Africa and result in a win-win situation for both parties, given that Africa already imports a lot from China. I would like to encourage China to open their market more for processed coffee and other products, not only raw materials.”
Africa’s import trade from China is higher than its export value to China, which has seen a growing trade deficit since 2012, said Oyintarelado Moses, data analyst for the Global China Initiative at the Boston University Global Development Policy Centre. “Africa-China trade engagement is significant but has largely moved from relatively balanced trade to trade deficits for African countries. In 2022, a high import value of goods from China and relatively lower value of exports to China continued a trade deficit that landed at 2.6 percent of GDP in 2022,” Moses wrote in a report.
Even as Sino-African relations have grown over the years, a large trade deficit and fleeting inflow of capital are the drawbacks, Alicia García Herrero, a senior fellow at Brussel-based Bruegel. “Notwithstanding China’s quest for commodities — such as fossil fuels, metals, critical raw materials and food — Africa is stuck with a large trade deficit with China,” said Herrero, who also is Chief Economist for Asia Pacific at French investment bank Natixis. “China’s growing industrial expansion recently encapsulated in the idea of the ‘New Production Forces’ does not bode well for this trade deficit, which is bound to grow.”
China emerged as Africa’s largest trading partner but ended up hurting the trade of terms for the continent, said Malancha Chakrabarty, senior fellow at Observer Research Foundation (ORF). “While African imports from China have recovered substantially recording a compound annual growth of 12 percent between 2017 and 2022, African exports to China have decelerated, widening its trade deficit with China,” she said.
Facing criticism over the growing trade deficit, China unveiled ‘green lanes’ to fast-track administrative clearances for agricultural imports from Africa. However, the economic recession in China and weak supply chain are set to affect bilateral trade, resulting in a widening trade deficit, said Zainab Usman, director of the Africa Program at the Carnegie Endowment for International Peace. “China’s slowing growth will increasingly impact its economic relations with Africa. Growing China-Africa trade volumes will continue to be characterised by trade deficits,” she said.
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At the eighth Forum on China-Africa Cooperation (FOCAC) in 2021, China also pledged to import products worth USD 300 billion from Africa in three years. However, the ground reality is different and exact opposite. “China’s USD 300 billion pledge at FOCAC8 was certainly innovative. But to close the Africa-China trade gap for good, more than just a target will be necessary,” said Rosie Wigmore, Policy Analyst at Beijing-based Development Reimagined.
