China’s decision to scrap all import tariffs for goods from African countries offers plentiful opportunities for South African manufacturers and agricultural producers.
The Chinese move is clearly designed to contrast with the Trump administration in the United States, which is raising tariffs on nearly every country doing business with America.
China announced it would negotiate and sign a new economic pact with Africa that will get rid of all tariffs on the 53 African states it has diplomatic ties with, Reuters reported.
The news agency quoted analysts saying the move could help relatively advanced countries, with significant manufacturing bases for value added products, to take advantage of the vast Chinese market.
“It enables middle-income countries like Kenya, South Africa, Nigeria, Egypt and Morocco… to be able to now enter the Chinese market duty-free,” said Hannah Ryder, founder of Development Reimagined, an Africa-focused consultancy.
The announcement was immediately welcomed by Wesgro, Cape Town’s trade and investment promotion agency. CEO Wrenelle Stander said Wesgro already had a strategic focus on expanding exports to China, and would “work to understand how best business can leverage new opportunities flowing from this announcement”.
There are also plenty of opportunities for the agricultural sector. However, agricultural economist Wandile Sihlobo urged both action and caution.
“Ultimately, China is one of the focus areas in South Africa’s long-term agricultural export diversification strategy, and any opportunity to further this plan should be pursued vigorously,” he wrote on PoliticsWeb.
Sihlobo also warned that non-reciprocal arrangements could lead to dependence and be exploited by the benefactor as a means of political leverage to achieve strategic ends.
“Unilateral duty-free, quota-free market access is a double-edged sword: in the short to medium term, they can help a country increase the share of its exports in a significant market, but since these are not anchored in reciprocity, the largesse can disappear if there are frictions between the two parties, for example, over geopolitics,” he said.
“While South Africa—and indeed African countries—should take advantage of this opportunity, we must aim to conclude a bilateral trade agreement with China that guarantees predictability and certainty and is durable,” Sihlobo stated.
