Helping African Brands Enter the Chinese Market
Trade between Africa and China rose to a record high in 2022, rising by 35% from 2020 to $254 billion in 2022. However, this was mainly due to an increase in Chinese exports to the continent, which shows that China-Africa trade still has a deficit problem. This pattern also continues across G20 countries with on average just 3% of all products imported by the G20 coming from Africa in 2020.
These stark trade imbalances severely impact the capacity of African countries to create jobs, earn foreign exchange, and develop sustainably to cut poverty. As China and the Euorpean Union (EU) are Africa’s largest trade partners, this calls for a more sustainable Africa-China or Africa-EU relationship in order to help alleviate the acute trade imbalance.
But, in real terms how can African countries increase trade and subsequently support poverty reduction and sustainable development on the continent?
There are two strategies for increasing imports from Africa: increase the volume of African exports or increase the value of African exports.
Geographical Indications tackle the latter – value. Being Africa’s largest trade partners, both the Chinese government and the EU could take a leading role in supporting African countries with this.
What are Geographical Indications and why are they important? Geographical Indications grant distinct rights to “the qualities, characteristics or reputation of the product essentially due to the place of origin,” according to the World Intellectual Property Organization (WIPO). In other words, GI protection allows producers to raise retail prices.
So far there are a total of 186 African Geographical Indications documented in the Origin database. Broadly, they fall into two categories: food and non-food products. African food products with GIs are very diverse. They include Guinean and Ethiopian coffees, Cameroonian honey and pepper, Mozambican goat meat, and Kenyan tea. For non-food products, wines account for majority of African GIs. Over 100 African wine brands have GIs, most of which are protected in third countries. However, all food product GIs, except for one, are only protected at the national level (the exception s South African lamb, which is protected in the EU) and no African food product GIs are protected in China.
This lack of GI protection in China and elsewhere is increasingly important because while African products are not yet GI protected in China, a few GI products are rapidly growing there such as South African wines, South African rooibos tea, and Kenyan teas. This is why China’s pledge to become Africa’s first partner to commit to developing a process to recognise Africa’s geographical indications at the 2021 Forum on China-Africa Cooperation (FOCAC) was so crucial and could have a huge impact on increasing the value of Africa’s exports to China.
Furthermore, the African Union has a strategy for promoting the adoption of GIs, particularly in the agricultural sector and the EU is also working with African regional blocs such as the East African Community to increase mutual recognition of GIs.
To support this progress, Africa Reimagined, alongside its parent company, Development Reimagined, have the following 4 recommendations for African leaders, the Chinese Government and the EU, that has the opportunity to make a substantial difference by thinking innovatively about trade:
First, we should ensure protection of African goods in China and the EU so that brands reap the benefits of their innovation. The African Union and African governments should push for GI protection in conjunction with their signing of MOUs and removing other non-tariff barriers. Specifically, the Chinese government should also promote further agreements that guarantee mutual recognition of IP and GIs in China. South African wines, Rwandan coffees, and Egyptian cottons are already for sale on Chinese e-commerce platforms Alibaba, JD, and TMall. However, most are not protected. There must be increased cooperation and legal support for these producers and products when implementing the rapidly growing China-Africa trade facilitation mechanisms through Chinese e-commerce channels.
Second, we should encourage more partnerships between Chinese investors and African brands. Through Development Reimagined and Africa Reimagined’s partnership with the Made in Africa Initiative, we encourage Chinese companies not to just distribute their products in Africa, but to actually invest and build factories there. Some are starting to build factories to serve domestic markets and the EU, where GIs and IP are well protected. More factories should also be built to directly serve the Chinese market. This is a ripe area for investment and would help countries diversify out of agriculture and commodity-based production, following China’s example.
Third, Africa Reimagined alongside its Chinese partners need to continue making the Chinese market easier to navigate for African brands. The vast majority of these brands are fairly small-scale, which is why Africa Reimagined offers a cheap and hassle-free service to help African SMEs to register their IP, trademark and copyright materials. The same services and access to information on how to register African GI’s now needs to be rapidly developed to support China’s 2021 FOCAC pledge to commit to developing a process to recognise Africa’s GIs.
And fourth, we should encourage Chinese tourism in African countries that is specifically designed to increase exposure to GI products and brands. The experience of Longjing tea attracting tourists to Hangzhou and vice versa is a perfect example of this match. Products such as South African rooibos tea have developed appeal for an increasing number of Chinese consumers through their travel to South Africa. A great deal more can be done with variation on this theme – and with growing Chinese outward tourism every year, there is every reason to harness this spending power in Africa.
Geographical Indications represent an opportunity for African countries to be proactive in protecting their already rich and unique intellectual, cultural, and territorial heritage. Protecting GIs does come with more capital investments up front in legal fees as well as education to institutionalize processes; and it does rest on a country’s capacity for international cooperation and governance. Therefore, it is important governments and forums, and market entry platforms create initiatives that enable this.
In the long term, adding value with GIs diversifies risk away from commodity prices, and instead builds a platform for sustainable growth that will lead Africa into the future.
Jinyu is a dual-degree Master’s student at Sciences Po & Peking University. At Africa Reimagined, Jinyu produces research to foster better mutual understanding between African clients and Chinese consumers.
Rosie is the Project Manager of the Africa Reimagined program. Rosie seeks new opportunities to ensure African businesses thrive in the Chinese market through market and trade research, partnership building and her diverse networks across China and Africa. Rosie operates all of Africa Reimagined’s services and supports Africa Reimagined’s clients with their entry and expansion in the Chinese market. She has over three years of experience working in the Africa-China relations space both in China and in Sierra Leone. She has in-depth knowledge of both the Chinese market and African markets, as well as the Africa-China trade relationship, which she uses to facilitate African value-added exports to China.
Leah has vast experience working with African businesses and managed the Beijing leg of our pilot market entry programme. Previously, Leah worked at UNDP China on South-South cooperation, and the Belt and Road Initiative. She also lived and worked in Kenya developing sustainable water policies for the government.
Africa Reimagined is led by our founder and CEO Hannah Muthoni Ryder, a former diplomat and economist by training. She is the CEO of Development Reimagined.
Her goal for Africa Reimagined as Development Reimagined’s first flagship project is to empower African brands through entering the growing Chinese market. In doing so, value-added products can be created and manufactured in the African continent. This will contribute towards breaking the poverty cycle through providing jobs, reliable incomes, and overall, fostering sustainable development