Analysts skeptical about African impact of China’s zero-tariff offer – VOA Asia

Analysts interviewed by VOA expressed skepticism over China’s recent decision to eliminate tariffs for goods from least developed countries with diplomatic relations with Beijing, including 33 in Africa, next month.

The move was announced by Chinese President Xi Jinping at the 2024 Summit of the Forum on China-Africa Cooperation in Beijing in early September.

The analysts see it as an effort to expand China’s influence in Africa without bringing much benefit to the LDCs.

“This move has not generated the excitement it should, due to well-known structural difficulties in Africa,” Emmanuel Owusu-Sekyere, director of research, policy and programs at the African Center for Economic Transformation in Accra, Ghana, told VOA.

“Cooperation between China and Africa has benefitted China much more than it has Africa,” he said, adding, “Africa has given China unbridled access to its markets, which has crippled local production capacity in several aspects of the manufacturing sector e.g., textiles.”

Xi described the zero-tariffs plan as making China the first major economy to take such a step to offer Africa a substantial opportunity to do business in the large Chinese market.

Analysts see it as Beijing’s attempt to compete with the United States. The U.S. African Growth and Opportunity Act provides duty-free access to the U.S. market for more than 1,800 products from 32 sub-Saharan African countries. It will come up for renewal next year. They say China is also trying to take advantage of resentment of some African countries barred from AGOA on such grounds as human rights or lack of democracy and free markets.

“China’s move to allow African LDCs to export tariff-free is clearly a move to project its power in an alternative world order,” said Samir Bhattacharya, associate fellow at the New Delhi-based Observer Research Foundation.

“The rigid policies of the U.S. have made some African countries averse towards it. China sees this as an opportunity to undermine the U.S.-led world order and promote its own narrow interests,” Bhattacharya said.

“China has reworked its trade basket to lure African leaders,” he added.

“This scheme would offer additional support to dictators and military leaders in African countries who are not comfortable with the U.S.,” he said. “It would not improve the economy of these countries.”

China’s Viewpoint

Chinese Commerce Ministry spokesperson He Yongqian has said that the initiative would boost LDC exports. It will also promote solidarity and cooperation among the countries of the Global South and advance the goal of “inclusive and equitable economic globalization,” she said.

She said China has signed framework agreements on economic partnership for common development with 22 African countries, including Ethiopia, Burundi, Gabon, and Zimbabwe.

However, Owusu-Sekyere expressed a different view.

“African countries are not strategically located in Asian production value chains like Bangladesh and Vietnam. Lack of strategic positioning and planning as well as structural bottlenecks will make it difficult for African countries to take advantage of this plan,” Owusu-Sekyere said.

Every time China’s government enters into a trade or investment agreement with another country, Chinese entrepreneurs usually rush to grab the business opportunities created by the deal. This has been the experience of several countries in Africa and Asia that have received Chinese investments.

Owusu-Sekyere said several African countries have enacted laws reserving the retail sector exclusively for locals but it has been taken over in those countries by Chinese entrepreneurs using local partners as fronts.

The bigger challenge for African countries are non-tariff barriers related to such things as quality, he said.

“African economies are not diversified enough to supply at the quality and scale required to meet the sophisticated and diverse demands of a huge market as China,” according to Owusu-Sekyere.