Chinese Goods Gain Popularity in Africa
Price-sensitive African markets opt for Chinese goods...
In recent years, Chinese goods have emerged as popular items of trade among African counries and Chinese companies are exporting in increasing quantities of a wide variety of products directly to the African markets. As a result, China's trade with Africa has been registering a substantial growth in recent years.
Price-sensitive markets in Africa have welcomed the easy availability of low-priced Chinese goods. Traders and merchants have also been africa_marketquick to seize the opportunity to source their requirements from China in order to increase their profit margins. By directly sourcing their requirements for capital and consumer goods, African businesspeople have cut out the middlemen and consequently increased their profit margins. The trend has been repeated in almost all countries across Africa and the result is clearly visible in almost all African countries flooded with low-priced Chinese goods. Whether it is tyres, automobile parts, stationery, perfumes, cosmetics, computer hardware, furniture or machinery, China has dominated the African markets.
In 2005, China's export to and import from Africa hit a new record high, of over US$10 billion respectively. The total trade volume reached US$30 billion, an increase of almost 60 per cent over 2003. In fact, China's export to Africa reached over US$14 billion in 2005, and its import from Africa almost US$16 billion!
The main products China exports to Africa are machinery and electronics, textile and apparel, hi-tech products and finished goods, while imports from Africa concentrate on crude oil, iron ore, cotton, diamond and other natural resources and primary goods. To help the countries in Africa expand exports, China has exempted import tariffs for certain commodities of these countries. China has announced the names of 25 African countries that enjoy zero tariff treatment and special preferential tariff rate for exports of some 190 products to China, ranging from food, mineral product and textile, to machinery and electronics.
These statistics clearly show the increased trading activity between Africa and China. Chinese companies, known for their marketing and business skills, have been reaping rich dividends by promoting their products and services in the new and emerging markets of Africa.
In fact, as many as 77 Chinese-funded enterprises in Africa were established in 2004, with total investment of approximately US$432 million. Apart from the fast growth of bilateral trade and investment, China and African countries also enjoy good cooperation in the international arena. Together with other developing countries, China and Africa have maintained close consultation and cooperation in safeguarding the common interests of the developing countries, and in pursuit of the establishment of a new international economic order that is both fair and rational. A successful example is the formation of G20 during the recent round of WTO talks in Cancun.