The first joint Sino-African trade expo aimed at promoting investments is to take place in Changsha, the capital of central China’s Hunan province, between June 18 and June 20, 2019. The fair, with an estimated display space of 50,000 square meters, is to be used as a showcase for the economic and trade opportunities in China and Africa, with bilateral agreements and investment deals expected to be signed during the expo.
China’s President Xi Jinping spoke about the expo in the September 2018 Forum on China–Africa Cooperation (FOCAC) summit that took place in Beijing. Xi proposed eight initiatives, one of which is the launch of an industrial promotion initiative aimed at encouraging Chinese companies to increase their investments in Africa.
Xi promised to increase imports from Africa, promote African products, exempt some poorer African countries from debt as well as exempt least developed African companies from paying exhibition fees at its annual high-level China International Import Expo.
“We have decided to open a China-Africa economic and trade expo in China; we encourage Chinese companies to increase investment in Africa, and will build and upgrade a number of economic and trade cooperation zones in Africa. We will support Africa in achieving general food security by 2030, work with Africa to formulate and implement a program of action to promote China-Africa cooperation on agricultural modernization. We will implement 50 agricultural assistance programs, provide RMB 1 billion of emergency humanitarian food assistance to African countries affected by natural disasters, send 500 senior agriculture experts to Africa, and train young researchers in agri-science and entrepreneurs in agri-business. We will support Chinese companies in Africa to forge an alliance of corporate social responsibilities,” Xi stated while talking of the industrial promotion initiative.
Currently, China is Africa’s largest trading partner but there has been a trade imbalance between the Asian country and all the African countries it trades with. In Nigeria, for every $1 it exports to China, the country imports $11. Kenya is no different— for every $1 million worth of export it does to China, it imports worth $3.8 billion in return. Uganda suffers same fate as the ratio of imports to exports to China was 22:1. Unfortunately, imports from China outweigh exports in many other African countries.
China is presently Kenya’s biggest trading partner. As of 2017, imports from China were valued at $96.88 million whereas the country exported just $3.79 billion in goods. Kenya’s main exports are hides, skins, coffee, tea, titanium ores and plastics while it imports leather, rubber, machinery and transport equipment and chemicals from China. China’s trade in Africa has grown in the past 40 years from $765 million to $170 billion yearly.
Hopefully, the roads that lead China to Africa and fostered great deals for Chinese manufacturers is a two-way street that will promote African businesses and generate revenue for the individual African countries so they can reduce their over-reliance on loans and aids.
Presently, Chinese investments in Africa have been revolving around Chinese firms, with roughly 90 percent of the firms handling the investments being controlled and owned by the Chinese. Though the trade deals struck in other summits are said to be mutually beneficial, the deals are mostly handled by Chinese contractors, leaving local businesses lagging behind. Hopefully, this first joint Sino-African trade expo would be different.
Hunan province in China, where the expo is holding, recorded a trade volume of $2.8 billion with African countries in 2018, while the contracted investment by Hunan firms in Africa amounted to nearly $1 billion, said Hunan’s deputy governor, He Baoxiang.