What is FOCAC8 and what does it mean for Africa-China trade and African-based businesses?

On November 29th, the Africa Reimagined  team (some in Dakar and some in China) were eagerly awaiting President Xi Jinping’s speech at the opening ceremony of the eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC8) in Dakar, Senegal. Why? President Xi’s speech laid out the key agendas that would shape the Africa-China relationship for the next three years, and in turn, the fortunes of our clients at Africa Reimagined.

Africa Reimagined is a China market entry service platform and consultancy. We provide services – ranging from Chinese IP protection, market research to business matching – for specifically premium and sustainable African brands that keep their entire supply chain within Africa. Africa Reimagined is the flagship programme of Development Reimagined, a pioneering, international development consultancy headquartered in Beijing. Together with Development Reimagined, our mission revolves around cultivating sustainable, impactful development through helping high-end African brands enter the vast and growing Chinese market to boost Africa’s value-added exports and create more jobs across the continent,

Did China announce new opportunities to boost Africa-China trade at this year’s FOCAC? The simple answer is, yes, and more of them and more explicitly than ever before. FOCAC8 produced four key documents that laid out nine programmes to strengthen Africa-China cooperation and showed that the Africa-China relationship is becoming considerably more inclusive and receptive to the demands of African people and business. These four documents made more pledges to support African development initiatives and programmes than we had ever seen before.

  1. The trade promotion programme: “China will aim to reach $300bn in total imports from Africa in the next three years. Measures will include opening “green lanes” for African agricultural exports to China and further increasing the scope of products enjoying zero-tariff treatment for the Least Developed Countries (LDCs) that have diplomatic relations with China. China will provide $10bn of trade financing to support African exports.”
  1. The digital innovation programme: Online shopping festivals promoting African products and a campaign to market 100 African stores and 1,000 African products on e-commerce platforms are promised.

What is refreshing is that all these trade programmes include practical measures that are already bringing new opportunities to African businesses.

Opportunities for African businesses through Chinese e-commerce platforms:

In recent weeks, China’s pledge to create online shopping festivals promoting African products has resulted in Ethiopian and Rwandan coffee flying off the virtual shelves after Rwanda’s and Ethiopia’s ambassadors to China each participated in a promotional campaign to sell their country’s coffee. These campaigns are gradually increasing an awareness of and demand for value-added African products amongst Chinese consumers. Africa remains among China’s smallest regional trading partners, making up just 4% of China’s global trade of which most exports is still natural resources, 

such as petroleum. Consequently, most Chinese consumers are unaware of what consumer products Africa has to offer. This is certainly not a missed opportunity and there will certainly be more promotional campaigns on China’s biggest e-commerce platforms and new specifically Africa-China e-commerce channels that your brand can access in 2022.

Increasing value and awareness of African, branded products through geographical indications:

China has become Africa’s first partner to commit to developing a process to recognise Africa’s geographical indications. This will help increase the value of African products by indicating where the product originated and the qualities it possesses that is unique to its geographical origin. Promoting branded

Ethiopian and Rwandan coffee through online shopping campaigns is ensuring African products get the recognition and profits they deserve and reduces the likelihood of unroasted African coffee being exported to China and blended with Chinese coffee brands, which then receive most of the profits. The next step will be to move away from promoting only branded African agricultural products and include products such as South African gin with South African botanicals or Ethiopian fashion and jewellery brands that have a distinctly Ethiopian design – African brands from ALL sectors should watch this space!

Easing African agricultural exports to China through “green lanes”:

African agricultural producers, including some of our clients, were no doubt very pleased to learn about these “green lanes because exporting agricultural products to China can be slow and expensive.

When our clients first approach us, they frequently complain that despite China already having trade facilitation mechanisms in place for most African counties to make the export process easier and cheaper – in particular, the Duty-Free Quota Free Scheme (DFQS) for Least Developed Countries (LDCs) and the Most Favoured Nation (MFN) duty – they can be difficult, if not impossible, for many African agricultural producers to utilise.

One reason is that many important African agricultural exports, such as corn, raw cotton, rice, sugar, wheat, wool and wool fibre are still not covered by the DFQS and the ones that are covered may not be eligible because of the scheme’s restrictive Rules.

Some African agricultural producers don’t even attempt to utilise these schemes because they can’t meet China’s strict import requirements, such as its Sanitary and Phytosanitary (SPS) measures. One example is the SPS requirement that Kenya must export only frozen avocados to China to kill pests.

African producers that do manage to export agricultural products to China can still find that they cannot benefit from the DFQS or MFN duty, or cannot clear customs because each Chinese port has different rules and information regarding SPS requirements and the DFQS or MFN duty. It is no surprise then that only 50% of African agricultural products enter China under the DFQS.

How can Africa Reimagined help you to take advantage of these new opportunities?

Our clients and partners include African governments, Chinese government departments, African ambassadors in China, African and Chinese businesses and UN bodies. Through our extensive networks, we are tracking the implementation of all the trade policies announced at FOCAC8 so that we can advise your business on how to make use of them.

We also strive to work with Chinese partners, including importers and distributors that recognise China’s trade policies regarding the DFQS, the MFN duty, SPS measures and the incoming “green lanes.”

All of this information can be found in our Bespoke China Market Research & Analysis Guide” or utilised through our “Matchmaking with Chinese Business Partners” and “Logistical Support from Africa to China” services.

Later this year, we will also be taking part in the digital innovation programme by launching the “Africa Reimagined” e-commerce store on JD-Worldwide, the cross-border e-commerce platform of China’s largest retailer, JD.com. It will be the first ever e-commerce store in China for exclusively premium African brands. In partnership with JD-Worldwide, we will support you throughout the whole process from registration, international and China-mainland logistics, storage and payment transfers so your business can access JD’s 387 million active users without having a physical presence in China.

Keep checking our website for updates or book your free consultation with us today!

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

Research Analyst | Oxford, UK
Jade supports Africa Reimagined’s market research and brand communications to support brands during the early stages of their entry and enhance understanding of the opportunities of Chinese market.

Yike Fu

Africa Finance and Data Consultant | Hangzhou, PRC
 
Yike Fu is a skilled analyst with two years of qualitative and quantitative research experience in international development. Yike specializes in African Development and China – Africa relations with proven ability to provide diverse support to international organizations, non-profit, and non-governmental actors.

Rosie Wigmore

Project Manager | Beijing, PRC

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 Lynch

Deputy Director | Beijing, PRC
Leah is the Deputy Director of Africa Reimagined and Development Reimagined. She is also the co-chair of the sustainability forum for the British Chamber of Commerce, working with both British and Chinese businesses. She has in-depth knowledge of the landscape that brands face when entering the Chinese market. 


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.

Hannah Ryder

Founder and CEO | Beijing, PRC

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