Africa’s trade deficit with China shrinks due to soaring minerals exports, weaker currencies
Africa’s trade deficit with China has shrunk in the first half of this year, as exports from some, especially resource-rich, African countries have soared in the first half of the year, while imports from China to Africa fell slightly, according to the latest Chinese customs data.
During the first six months of this year, China’s imports from Africa rose by 14% year on year to reach $60.15 billion, while Chinese exports to the continent fell marginally by 2.3% to $84.85 billion, figures from China’s General Administration of Customs showed. During this period, total China-Africa trade grew by 3.9% to $145 billion compared to the same period last year.
Economists have attributed the increased imports from Africa to the growing production of minerals, rising commodity prices and the depreciation of key African currencies. However, they also cautioned that while a shrinking trade deficit was good news for Africa, this trend was not likely to last.
Zimbabwe, Democratic Republic of Congo (DRC), South Africa and other resource-rich African countries have seen heavy investment from Chinese companies as they ramp up mineral production amid the global push for green energy. Therefore, Africa’s boosted exports to China are largely due to the latter’s great appetite for the continent’s valuable resources, from cobalt to copper to bauxite and oil.
China’s trade with Africa appeared to buck the general trend, with China recording an overall increase in exports. But according to Mark Bohlund, a senior credit research analyst at REDD Intelligence, African exports to China would probably weaken somewhat in the second half of the year, mainly due to lower copper exports. At the same time, as Charlie Robertson, head of macro strategy at asset management firm FIM Partners, points out, “as China’s big priority right now is exporting its way out of its domestic property slump, I would expect it to try to boost exports to Africa over the coming year.”
