ASouthAfricanwineexporterintroduceshiswinetoChinesecustomersattheSeventhYantaiInternationalWineExpositioninJuly2013CHUYANGOnthemorningofJuly2,attheSandtonConventionCenterinJohannesburg,KobusvanderWathwasaddressingdozensofSouthAfricansuppliersandbuyersaboutthechangesofChina’sroleintheglobalsupplychain.
WathisaSouthAfricanwhohasworkedinAsiafor17years.HiscompanyTheBeijingAxisspecializesinprovidinginternationalbusinessconsultationandprocurementservicestoforeigncompaniescomingtoChinaandtoChinesecompaniesgoingoverseas.TheBeijingAxisholdssimilarsymposiumsthreetimesayearinSouthAfrica,mainlytointroducetheChinesemarkettosuppliersandexportersinSouthAfricaandfindwaystoexpandexportstoChina.
It’sthiskindofraisingawarenessthatCharlesManuel,EconomicCounseloroftheSouthAfricanEmbassyinChina,saysisneededifSouthAfricawantstoexpanditsexportstoChina.
“SouthAfricancompanieshavelimitedknowledgeonwhat’sgoingoninChinaandtheChinesemarket.Forexample,SouthAfricancompaniesmaystillhavedoubtsaboutChina’sintellectualpropertyprotection,butasamatteroffactChinahastakenalotofmeasurestoregulateandpunishviolationsofintellectualpropertyrights,”hetoldYicai,aChineselanguagefinancialmagazine,inJuly2018.
ExpertsbelievethatthelackofresourceandcapacitymakesmarketdevelopmentamajorshortcomingforemergingmarketsanddevelopingcountrieslikeSouthAfricatoexporttoChina;butonceitisaddressed,hugepotentialcanbeunleashed,asevidencedbytheexportsofSouthAfricanwinestoChinaoverthepasteightyears.
AccordingtoSiobhanThompson,CEOofWinesofSouthAfrica,wineexportstoChinaincreasedsignificantlyfromabout5.5millionlitersin2013tomorethan17.5millionlitersin2017.Despitethepromisinggrowth,however,SouthAfricacurrentlyownsonlyanegligibleshareoftheChinesewinemarket,lessthan2percentbasedonsalesvolume.“Thepotentialforgrowthishuge,”saidThompson.
Totapthepotential,WinesofSouthAfricaorganizesmanyeventstoencouragewineexportstoChina.“SouthAfrica,asawineexporter,isnotaswell-knowninChinaasothercompetitorslikeFranceandAustralia,”saidThompson.“WinesofSouthAfricathereforeneedstomakeChinesetraders,distributorsandconsumersawarethatourwinesareofworld-classqualitywithahistoryofwineproductionformorethan350years,”ThompsontoldYicai.
ShesaidtheirnextbigmoveistoattendtheFirstChinaInternationalImportExpo(CIIE)tobeheldthisNovemberinShanghai,whereSouthAfricanandotherAfricanbusinesseswillshowcasetheirlocalbrandstotheChinesemarket.
Africanopportunity
Actually,ChinahasbeentakingmeasuretoincreaseimportfromAfricancountries.AttheopeningceremonyoftheBeijingSummitoftheForumonChina-AfricaCooperation(FOCAC)inSeptemberthisyear,ChinesePresidentXiJinpingpledgedatradefacilitationinitiativebetweenChinaandAfricancountries.“Wehavedecidedtoincreaseimports,particularlynon-resourceproducts,fromAfrica,”hesaid.
CIIE,whichwillbeheldannually,isoneoftheimportanteventsChinawillholdtoincreaseimportsfromtheinternationalmarket.UnliketraditionalexhibitionsheldinChinaforthepurposeofboostingbothexportandimport,suchasChinaImportandExportFairheldtwiceayearinGuangzhou,southChina’sGuangdongProvince,CIIEfocusesonprovidingglobalexporterswithaccesstotheChinesemarket.
AfricaisbeinggivenspecialtreatmentattheupcomingCIIE.“WesupportAfricancountriesinparticipatingintheChinaInternationalImportExpo,”saidXi,addingthattheleastdevelopedAfricancountriesparticipatinginitwillbeexemptedfrompayingexhibitionstandfees.
“ThisexpoisanewoutcomeofChina’srapiddevelopmentandanewmeasureforChinatoexpanditsopeningup.Itwillprovideanewplatformforcountriestoachievecommondevelopment,whichisofgreatsignificance,”saidLinSongtian,ChineseAmbassadortoSouthAfrica,whilepromotingCIIEamongSouthAfricanexporters.AccordingtoQianKeming,ViceMinisterofCommerceofChina,theCIIEhascapturedtheattentionofinternationalbusinesspeoplewithmanycountriesnegotiatingforadditionalbooths.China,however,reservedboothsforAfricanleastdevelopedcountriestofacilitateintroducingtheirproductstotheChinesemarket.
Tacklingtradeimbalance
TradebetweenChinaandAfricaisgenerallybalanced,accordingtoQian,whonotedthatChinahadasurplusin10ofthe18yearsfrom2000to2017andadeficitintheothereightyears.Africa’stradedeficitwithChinabecameevidentin2015.Thatyearsawa39.1percentdeclineinChina’simportsfromAfrica,resultinginasurplusof$38.3billion,accordingtotheChineseMinistryofCommerce.Inthenexttwoyears,China’stradesurpluswithAfricacontinued,thoughonasmallerscale.
TopromotetheentryofAfricanproductsintoChina,theChineseGovernmentbegantoimplementatariff-freepolicyin2005.OnAugust28,atabriefingoftheFOCACBeijingSummit,Qiansaidthat33Africanleastdevelopedcountriesbenefitfromthezero-tariffpolicyfor97percentoftheirproductsexportedtoChina.ItisalsohelpfulforChineseenterprisestoreducetheircostsandexpandoptionsforimports.
AnimportantmanifestationofthetradeimbalancebetweenChinaandAfricaisthatChinaimportsalotofproductswithlowaddedvaluefromAfrica,includingrawmaterialsandprimaryagriculturalproducts.Qiansuggestedthattoimprovethetradebalance,itisnecessaryto“furtherexpandinvestmentinAfricaandtransferinvestmentinChina’sindustries,especiallythemanufacturingindustry,toAfrica,todiversifyitseconomicstructurewithindustrialcapacitycooperationandindustrialization.”
AnexampleofthisistheHuajianGroupthatbecamethelargestChineseprivateenterpriseinEthiopiaattheendof2017.Withanannualoutputofmorethan5millionpairsofwomen’sshoes,thecompanyisthelargestfootwearexporterinEthiopia,accountingformorethan65percentofthecountry’sfootwearexportsandemployingthousandsoflocalworkers.
China-Africainvestmentcooperationhasdevelopedrapidlyinrecentyears.AccordingtodatafromtheMinistryofCommerce,China’sdirectinvestmentinAfricain2017was$3.1billion,nearly40timesthatof2003.QiansaidtheinvestmentofChineseenterprisescontributedtoincreasingtheaddedvalueinAfricancountries’products,whichgreatlyimprovedtheirexportcapacity.
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