Infographic: Is China’s new 100% duty-free trade pledge for African LDCs a big deal?

The 9th Forum on China-Africa Cooperation (FOCAC), held in Beijing from September 4-6, 2024, resulted in many new plans to enhance China-Africa cooperation, especially on trade. At the Summit, the most attention-grabbing trade-related announcement was China’s pledge to remove 100% of tariffs on all exports from Africa’s Least Developed Countries (LDCs) that have diplomatic ties with China. By announcing this, China became Africa’s first development partner to offer such an extensive duty-free scheme.

That said, the pledge was not entirely new, excuse the pun. It built on an existing scheme announced in 2003.

Back in 2003, at the second-ever FOCAC meeting, China announced that 30 African LDCs would be eligible for zero-tariff treatment for 190 products. Over time, China gradually granted zero-tariff treatment to more products and reconsidered the beneficiary countries. From 2005, when the scheme was actually implemented, every single African LDC has, at some point, enjoyed some form of zero-tariff treatment from China.

Now, with the FOCAC9 pledge and the complete coverage of countries, an additional 140 products and 47 tariff lines will be included, such as rice, wheat, sugar, cotton, soybean oil, cigarettes, cigars, wood products, wool, and paper products.

This matters.

The impact so far for the LDCs since 2005 – when the partial-coverage scheme was initially implemented – has been reasonably positive when viewed collectively. Since 2005, the value of exports from the 27 African LDCs that enjoyed zero-tariff treatment for 97% of their products (the highest coverage prior to FOCAC9) has been US$578 billion – accounting for 99% of their exports.

That said, the 27 non-beneficiary African countries also saw similar growth in exports and exported US$771 billion during the same period, which indicates that it is not just zero-tariffs that boost the value of exports. Furthermore, when viewed individually, the impact is more mixed. Some countries have seen very high growth. For example, Angola’s zero-tariff exports to China increased from 2005-2022 at an annual average of US$21 billion, the DRC’s by US$4 billion, Zambia’s by US$2 billion, and Mauritania’s by almost US$1 billion.

However, all these countries export primarily minerals and oil to China, which means the zero-tariff scheme has contributed to the growth of largely low-value, unprocessed exports.

This, in a sense, is the key challenge going forward. Because although, in principle, the least developed African countries can now export more to China, additional measures are needed to actually boost and diversify their exports, especially since many of the LDCs have the lowest processing and manufacturing capacities on the continent.

The good news is that China has announced many supportive, complementary trade measures in previous FOCACs. For example, at FOCAC 8 in 2021, China launched “Green Lanes” to speed up customs procedures for African agricultural products and created online shopping festivals and promotion campaigns for high-quality African products. The recent FOCAC 9 built upon these supportive measures through the pledge to launch the “China-Africa Quality Enhancement” program and to deepen China-Africa e-commerce cooperation. In addition, the scheme contributes to a strengthened business case for continued Chinese investment in manufacturing and infrastructure connectivity, which can help African LDCs produce more value-added exports.

So, while China’s zero-tariff pledge for African LDCs might not be entirely new, it could become a big deal by serving as a stronger foundation for boosting and diversifying Africa’s exports. And if the scheme is eventually broadened to cover the African Continental Free Trade Area (AFCFTA) – i.e., all African countries, including middle-income countries – it will no doubt be an even bigger deal. Here’s hoping!

Take a look at our infographic report below and digest the data for yourself!

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Special thanks go to Katia Machavane, Rugare Mukanganga and Yixin Yu for their work on the graphics and for collecting/analysing the underlying data and this accompanying article. The data was collected from the World Trade Organisation (WTO) and General Administration of Chinese Customs (GACC).

If you spot any gaps or have any enquiries, please send your feedback to us at media@developmentreimagined.com, and we will aim to respond ASAP.

 

 

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Trevor Lwere

Research and Coordination Analyst

Trevor Lwere is a Research and Coordination analyst at Development Reimagined with a background in Economics and Global Affairs. His interests include geopolitics, geoeconomics and economic development. He holds a Masters’ degree in Global Affairs fro Tsinghua University and a BA Economics from the University of Notre Dame.

Yujie Shi

 Policy and Research Analyst

Yuejie Shi is a Research and Data Analyst at Development Reimagined with a special focus on Global Trade and China-Africa Trade.

Sena Voncujovi

Research Analyst

Sena Voncujovi is a research and policy analyst at Development Reimagined. Voncujovi specializes in global health issues, Japan-Africa relations, and China-Africa relations. He served as the Editor-in-chief of Peking University’s Africa Think Tank (PATT) during his master’s in International Relations & Politics as a Yenching Scholar. Voncujovi previously advised the Ghanaian government for the 2019 TICAD 7 Conference held in Yokohama. He is the co-founder of Jaspora, Tokyo’s largest community of African diasporan diplomats, changemakers, professionals, students, and business people.

Rugare Mukanganga

Economist

Rugare is an economist at Development Reimagined, providing economic and data analysis support across projects.

Yixin Yu

Research Analyst

Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion.

Ivory Kairo

Communications Support

Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team through liaising with African brands, creating graphic content and other external outputs at AR. Ivory speaks English, Swahili and French

Huiyi Chen

Partnership Development

Huiyi Chen is a Research and Coordination Analyst on China-Africa cooperation and leading the engagement with Chinese stakeholders at Development Reimagined.

Jinyu Chen

Research Analyst | Paris, France

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. 

 

Jade Scarfe

Communications Support
Jade is a research analyst and communication support at Africa Reimagined. She supports with liaising with African brands, creating content and gathering China market research.

Yike Fu

China-Africa Policy Analyst

Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.

Rosie Wigmore

Project Manager | Beijing, PRC

Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.

Leah Lynch

Deputy Director | Beijing, PRC

Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.

Hannah Ryder

Founder and CEO 

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE’s International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.

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