Sharp Drop In Africa-China Trade In First Half Of 2020, More Turbulence Expected

Picture Credit: Supply Chain Digital

Data on the effects of the coronavirus on Africa and China trade is now available. According to figures from China’s General Administration of Customs, trade between Africa and China trade fell 19.3 percent in the first half of the year to US$82.37 billion. 

China, one of the biggest importers of raw materials such as copper, cobalt and oil, from Africa, cut its imports from the continent by 31 per cent while its exports to Africa fell by 8.3 percent. In sum, China sold $48.42 billion of goods in the first half of 2020 and imported US$33.95 billion in goods and raw materials from Africa. 

Analysts have attributed the sharp drop in China-Africa trade to the fall in commodity prices as lockdowns and port and airport closures cut demand.

“The fall in exports to the continent could reflect the lockdown in countries like South Africa – as well as a slowdown in investment projects”, Charles Robertson, global chief economist at Reniassance Capital, said. The fall in Chinese imports was commodity price-related and “so is a price, not a volume effect”, he explained. 

China’s customs authority say the trade volume in the first half of the year was “better than expected” given the unprecedented changes from the coronavirus pandemic and still expect

African countries to remain a key source of resources for China over the longer term, though  trade would remain weak and commodity prices depressed this year.

China-Africa Trade 

China is Africa’s largest trading partner, surpassing the United States in 2009. China’s Belt and Road Initiative has further strengthened relations between the country and region through a trade and infrastructure development plan, which funds the construction of roads, hydropower plants and railways across the continent. Many belt and road projects are either on hold or at near-standstill due to coronavirus disruptions.

African ministers say they could lose up to 15 percent of their GDPs with 27 million Africans falling into extreme poverty, as a result of economic shocks from the pandemic.  as a result of the pandemic. They have asked how to find the liquidity to manage their debts, support their health infrastructure (which requires another $100 billion), and start their economic recovery.

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