Africa's exports to China rocket
China is set to become Africa's largest export destination this year, reflecting a dramatic change since 2008, when Africa exported half as much to China as it did to the US.
Jeremy Stevens, Standard Bank Group's Beijing-based economist, said yesterday that China-Africa ties had continued to mature over the past decade, substantially altering the make-up of Africa's political and economic milieu.
China's foresighted engagement with Africa back at the start of the past decade was a master stroke, according to Stevens, allowing Beijing to steal a march on Africa's other partnerships.
In 2011, South Africa exported goods worth R90.2-billion to China, R42.7-billion to Germany, R29-billion to the UK, R12.9-billion to Italy and R6.3-billion to France.
The 27 members of the EUreceived R152.5-billion out of total exports of R707.3-billion. The US received R61-billion worth of South African exports.
China was at the centre of the recalibration of Africa's trade and investment cords during the global slowdown and the stuttering of advanced economies.
Latest figures show that trade between China and Africa reached $160-billion in 2011, up 28% from the previous year.
Last year, China accounted for 18% of Africa's trade, compared with 10% in 2008.
"Despite becoming marginally more expensive, China has managed to grow exports to Africa rapidly. High-level political visits have certainly helped, but, perhaps more critically, success has bred success and Chinese and African businesses are now more comfortable transacting with one another.
"Looking forward, China is well-positioned to participate in Africa's next phase of development," Stevens said.
He believed that two ingredients had re-enforced diplomatic support: capital from policy banks and time to develop two-way trust and establish commercial institutional know-how and infrastructure.
State-owned companies encouraged to "go out" have been successful in Africa, enabling China to increase its exports of equipment, machinery and vehicles while creating commercial and employment opportunities.
In addition, greater support will come this year as mature economies continue to stutter.
Outward investment is critical to China's development. Currency internationalisation will mean more investment and trade between China and Africa. Chinese exporters to Africa will benefit indirectly through subsidies in the 59 exporting zones.
African imports from China expanded by 23.7% in 2011 to $73-billion.
Last year, Africa sourced 16.8% of its imports from China from only 4.5% in 2002.
Africa's importance to China has also increased, accounting for 3.8% of China's exports from 2% in 2002.
Stevens noted that, while China had seen a downgrade in domestic potential growth and was shifting towards less energy-intensive growth levers, its $7-trillion economy would still demand more in absolute terms.
Robust growth out of several core African economies will ensure Chinese products continued to find fertile export terrain on the continent.
"China's commodity demand is structural and will be long-standing.
"In addition, Africa's demand for infrastructure and China's differential approach to financing creates markets for Chinese exports, commercial opportunities for its state-owned companies and employment opportunities for Chinese people," Stevens said.