China-Africa trade down 20pc, hit from coronavirus in first half
TWO-WAY trade between China and Africa fell 19
TWO-WAY trade between China and Africa fell 19.3 per cent in the first half of the year to US$82.37 billion as coronavirus ravaged economies and cut demand for commodities.
However, the decrease in trade in the first six months is 'better than expected', according to Chinese Customs who say Africa will remain a major source of commodities in longer term despite more turbulence expected for the rest of the year.
Analyst pointed out that China is one of the biggest importers of raw materials from Africa, including copper, cobalt and oil. The world's second-biggest economy sold US$48.42 billion of goods in the six-month period and imported US$33.95 billion in goods and raw materials from Africa, SCMP reported.
South Africa, one of China's key markets for goods and a source for raw materials, saw trade between the two countries fall by 27.6 per cent. China cut imports from South Africa by nearly a third, or 32.2 per cent, to US$8.68 billion while exports to the country slumped by about a fifth to $6.20 billion, according to the customs data.
Analysts attributed the sharp drop in China-Africa trade to the fall in commodity prices as lockdowns and port and airport closures cut demand.
Charles Robertson, global chief economist and an emerging markets analyst for Moscow-based investment bank Renaissance Capital, said that the fall in Chinese imports was commodity price-related and 'so is a price, not a volume effect'.
'The fall in exports to the continent could reflect the lockdown in countries like South Africa - as well as a slowdown in investment projects,' Mr Robertson said.
China is Africa's largest trading partner, having surpassed the United States in 2009. In 2019, two-way trade rose 2.2 per cent year on year to $208.7 billion, though that gain was much smaller than the 19.7 per cent increase reported for the previous 12 months, according to figures from China's Ministry of Commerce.
Ties between China and Africa have been bolstered by the Belt and Road Initiative, President Xi Jinping's massive trade and infrastructure development plan, which has funded the construction of roads, hydropower plants and railways across the continent. However, many belt and road projects are either on hold or at near-standstill due to coronavirus disruptions.