Africa is one of the most popular markets to trade on. Many international exporters aim to break into an African market and even become a local investor. In such circumstances, there is no surprise that Africa has a lot of trading partners all over the world. And while some of them are investing only occasionally on the African market, other developed strong commercial relationship with this continent.
Among these important trading partners that Africa has, China tends to remain the largest one for decades. And the reasons for this tight commercial collaboration are many. China is not only the biggest partner that Africa has but also the biggest investor on the African market. Here are the connections that China has with Africa and how they evolved over the years! Both China and Africa are becoming slowly but surely, important factors in the international trading market.
The Import-Export Business Between Africa And China
The most developed commercial aspect between Africa and China is the import-export trading. Only in the past decade, the import-export business between Africa and China increased by 30 percent every year. China discovered more export opportunities in Africa, but also, the country started importing a lot of African goods.
The secret of such a successful collaboration seems to be the exchange of goods between them in a mutually beneficial way. China increased its export of electronics, communication equipment, and vehicles in Africa since these types of goods are the most needed there. Meantime, Africa exported natural resources to support China’s increasing population. Among these resources, China imported from African countries petroleum, iron, copper and other metals.
These types of import-export trades had a positive impact on Africa’s economic growth in the past decades. The African industries reached a new level of development and the entire country evolved on a social and financial path. Only in the first six months of 2017, the trading between China and Africa reached an impressive value of $85.3 billion, and the perspective is to increase it every year.
Not only the value of these trades increased but also the diversity of them. China becomes interested in more goods coming from Africa while Africa is dependent on some of the Chinese exports. From the goods found in the food category, Africa imports a significant amount of rice from China. Rice became in time one of the main goods consumed in African countries.
The African country that relies on Chinese exports the most is South Africa. South Africa imported around $20.50 Billion goods from China only in 2017. While 25 percent of these imports were electrical goods and different equipment, 20 percent were machinery and vehicles. Even small gadgets like cell phones and laptops from China are in high demand in Africa, especially in the urban areas.
Other imported goods from China are different apparel pieces representing 3 percent of the imports, plastics and organic chemicals also reaching around 3 percent each. The types of goods imported in other African countries stay in similar categories. However, the percentage of imports tends to vary from one country to another. This fluctuation is also due to the different economic standards of each African country but also to the different demographics statistics. In an obvious way, larger African countries will import more products than smaller ones.
But the proportions remain when it comes to exports as well. South Africa maintains the highest level of exports in China, were more than 10 percent of total exports are heading each year. The next country that South Africa exports different goods to is the United States, in a percentage of 7.9, followed by Germany with 7.6 percent. All these exports support the country’s economy and contribute to its local financial needs.
After South Africa, the next partner of China regarding import-export trading is Angola. But Chinese exports to Angola decreased in the past two years which let South Africa enjoy the first place. And the fluctuation continues subjectively for each African country that starts trading with China. Regardless of the particular aspects, African countries and China seem to remain the top trading countries in the world.
China’s Investment In African Countries
As we mentioned at the beginning of this article, the import-export business is not the only type of business that takes place between China and Africa. China discovered along the decade’s many aspects of African industries that could use some improvement. And they decide to become local investors to make a change in these industries. China discovered that if they invest in key African industries, they can facilitate the import-export trading between them.
One of the most popular Chinese investments in Africa is the railway and train station in Angola. China agreed with Angola according to which they reinforce the construction of local infrastructure in exchange for oil. Oil is a significant resource that can be found in Angola and China wants access to it. China got involved in a variety of different constructions all over Africa, to obtain different resources.
China also donated and supported the construction of a local hospital building in Luanda, Angola. These top trading countries in the world have a history of mutual support and benefits. However, when it comes to the most important African countries that China decides to invest in, these remain Nigeria, South Africa and Zambia followed by Angola and several others.
In total, China is an important investor in over 20 African countries. And the motivation of the investment is different according to each country’s opportunities. In the top African countries, there are hundreds of Chinese firms that offer not only a new perspective on local industries but also new jobs for African people. Because Chinese people are willing to collaborate with Africans on more than one level and develop a good social and economic relationship.
But what is China after with such important investments in Africa? The answer is simple: fuel. Even if several other reasons are motivating China to invest in African countries, fuel remains the most important one. China’s population is increasing almost every year, and along with it, the needs increase as well. And Africa has more fuel than it needs which is why China is willing to trade some of its services for the precious good. And even if China has other needs such as imports of different foods and clothing, all Africa can offer in large quantities is natural fuel.
Besides its interest in fuel, China is also aiming to reach more political influence worldwide. And having an important impact in African countries contributes to this goal significantly. Geopolitical influence and power were always two of the main Chinese interests. Another aspect that motivated China to keep its investments going in Africa is the economic aspect. China is recognized worldwide for its incredible business capacities, and Chinese people used their skills in Africa as well.
Opening different firms in African countries worked for improving African industries but also for the Chinese economy. With the expansion of Chinese businesses in Africa, China’s economy is reaching a new level of financial performance. China’s biggest trading partners in Africa is different according to the types of goods that are traded but also the type of investments that are made.
However, Nigeria tends to remain the African country that is mostly connected to China from a commercial perspective. Not only China has a significant amount of local investments developing in Nigeria, but it is also interested in the import-export process of fuel. These details make Nigeria the most important African partner for China, close to South Africa.
The benefits of China’s investments in African countries were studied by many universities and specialists in economics and politics. Some think that China is aiming for some sort of commercial supremacy worldwide. And becoming a leader in as many African countries as possible seems to be the first step that China needs to take to conquer the world.
China already became a significant economic factor worldwide, and its trades with countries like the United States prove the importance of the Asian country in nowadays global commerce.
Top Trading Partners Of Africa
Africa relies a lot on its international trading success rate and both African economy and industries depend on it. After China, African countries have a multitude of foreign partners to collaborate with. Amazingly, China remains in the same position for imports and exports that impact African countries, while other trading partners differ regarding goods and importance. When it comes to imports, Africa is importing a lot of products from Germany, which is the second regarding value after China.
The list of importers continues with the United States, India, and the United Kingdom. The value of imported goods and products from these countries varies according to each African country’s needs and possibilities. The list of importers is completed by smaller partners such as Italy, Spain, Thailand and even Saudi Arabia. However, China remains the top importer in Africa and the most important trading partner.
When it comes to exports, things differ but not in a radical form. Africa is exporting a lot to China in the first place and the United States in the second place, followed by Germany and Botswana. Such export businesses are very important for all African countries because they support the local economy and stimulate local production of certain products and goods. The list of destinations for African exports is completed by Japan, India, Namibia and the United Kingdom, among other small partners worldwide.
But regardless of the type of business that Africa does with the rest of the world, China remains the most important partner at all levels of import, export to investments and industry changes. The relationships between the China and Africa are old, and they were improved significantly over time. This agreement between African countries and China works for the benefit of both parties involved and is incredible for improving local industries and economic aspects.
And both China and African countries are ready to continue the commercial collaboration in the future and even developing certain agreements to improve each other’s infrastructure and an import-export business. Africa China trade is one of the secrets that stays behind the impressive development of certain African countries in the past years.
Is China Africa’s largest trading partner in Africa? So if you wonder, the answer is more or less obvious. China is not leading the list of trading partners in Africa in the present only, but it has been doing that for decades. Some ups and downs appeared in the history of this collaboration, but the overall image works in favor of China and many African countries.
Many foreign exporters and importers aim to reach the opportunities available on the African market, but they seem challenged when it comes to best ways to do so. It can be a long and interesting process especially for beginners, but it is all worth it in the end. And when it comes to Chinese investors, the chances of success in Africa are proven to be real and reliable. If you are considering becoming a foreign partner for Africa, you should consider several aspects before making up your mind.
1. Decide on the African country that you want to trade with
When it comes to Africa, you have plenty of options to explore as a foreign investor. The types of goods that you will be able to import or export are specific to each African country which is why good research is necessary. Once you identified the best product to trade, you can start looking for options to provide that certain product. It is a complex process, but it is one that can bring you a lot of financial success. Also, be ready to adapt and change your product according to the market’s needs because these don’t remain constant.
2. Stay informed on the paperwork needed in the import-export process
One of the challenges that foreign importers and exporters face when trading with Africa is the legal aspect. You will need to be aware of the legal paperwork that is required in the process and how to obtain it. Most certificates needed for your goods will be given by certain authorities. If you have a lawyer working for you, it will save you a lot of time in the long run.
But even if you don’t, you can research all you need regarding these documents and even ask the authorities about the best way to obtain it. Import and export business is also for the benefit of local authorities and governments, which is why foreign investors usually receive all the help they need. However, as a beginner in the international trading, you might want to make sure that all your papers are gathered together before actually starting the import-export process. It is important to avoid delays but also unnecessary costs that can harm your budget.
3. Decide on a shipment method
Admitting that you put together your paperwork and decided on the type of goods that you want to trade, the next step is to decide on a shipment method. However, this decision might not be one that you have to take alone. Your importer or exporter partner will help you decide between shipping your goods by sea or by air.
Most African countries offer both by air and by sea shipping that you can take advantage of. But it depends a lot on the type of goods that you are importing or exporting as some of them might need extra care and special transportation means.
How Can Waystocap Help You Break Into The African Market?
Waystocap is a great way to improve your import-export business in Africa, but it is also useful to get you started in this field. By joining the Waystocap, you will be guided to identify the best commercial opportunities and explore them the best way possible. The specialist in this system will advise you in all decisions you make so that you benefit the most out of such a process. So you can count on Waystocap to get your required information.
By joining Waystocap, you will avoid frauds and potential risks coming along with the import-export process. Waystocap can not only support your import-export business in Africa but also your investment plan. Many Chinese business people feel ready to develop an investment business right away, and for them, Waystocap can make a huge difference. You will enjoy not only all the information that you need but also all the potential clients that you could collaborate with.
One of the biggest challenges in this type of business is finding the right partner. And Waystocap helps you find potential contacts that you can trust and work with, based on your personal needs as a businessman. Because each company has different business needs and possibilities, you can take advantage of such a personalized plan. Waystocap is a solution for your questions but also a way to develop your existing import-export business to a new level.