China-Africa trade reached $185.2 billion between January and September of this year, up 38.2% year-on-year, according to the Chinese Ministry of Commerce (Mofcom).China has become the largest trading partner for many African countries as China-Africa bilateral trade has been steadily increasing for the past 16 years. Overall, Africa’s share of China’s total global trade and FDI remains relatively small at less than 4%.According to BRI Beyond 2020, a report by The Economist, favorable financial incentives offered to African jurisdictions by China play a large role in the strong trade links. Several of the poorest countries in Africa export the bulk of their goods to China with no tariffs and no customs duties.In a recent press briefing a Mofcom spokesman said China's foreign direct investment in Africa had gone up 9.9% in the first nine months of this year compared with a year ago now sitting at around $2.59 billion.China’s interest in Africa has not waned, much of it being attributed to its need for mineral resources found in abundance in Africa. It is estimated more than 3500 Chinese companies have set up shop in Africa.The outbreak of Covid-19 in 2019 in China and subsequently in Africa and elsewhere in the world had impacted on the trade environment. “Bilateral trade has gradually stabilised, demonstrating the resilience of China-Africa trade,” said the Mofcom spokesman. “But the impact of Covid was felt, with bilateral trade between China and Africa from January to November 2020 only amounting to $167.8 billion. In terms of bilateral trade, South Africa, Nigeria, Angola, Egypt and the Democratic Republic of Congo (DRC) are China's top five trading partners in Africa. In terms of products, the trade volume of mineral products, machinery and equipment, and base metals (iron and steel, copper, aluminium, etc) and base metal products ranked in the top three, and the trade volume of major commodities remained basically stable. Particularly noteworthy is that the value of China's agricultural imports from Africa increased by 4.4% year-on-year, maintaining positive growth for four consecutive years.”According to Mofcom, Chinese investment in all sectors of the African economy is expected to continue on an upward trajectory. “From January to November 2020, China’s non-all-sector direct investment f low in Africa was $2.8 billion, up 0.04% year-on-year. Region-wise, the investment f low in east, north, and central west Africa increased by 22.7%, 15.4%, and 0.6% year-on-year. Country-wise, Chinese enterprises started new investment in 47 African countries, while investment in 17 countries increased by more than 10%. Sector-wise, Chinese enterprises’ investment more than doubled in wholesale and retail; scientific and technological services; transportation and warehousing; residential services, repair, and other services; and health and social ser v ices.”China-Africa infrastructure cooperation is also expected to continue to deepen. “From January to November 2020, Chinese enterprises entered into new construction contracts worth $55.1 billion in Africa, up 13.3% year-on-year. This number demonstrated the two sides’ strong willingness to cooperate in infrastructure. A number of major projects of bilateral concern progressed steadily, including Phase 2 of the Abuja-Keffi-Lafia-Makurdi Road and the CBD project of Egypt’s new administrative capital,” said the spokesman.
