Status of trade between EU and China with East Africa

The pattern of trade between the EU, China and Africa is characterised by deficits due to increased African imports. An improved infrastructure network has increased intra-East African trade. Statistics highlight the growing importance of imports from China, India and United Arab Emirates (UAE); 80% of imports are petroleum products, raw palm oil, machinery and pharmaceutical products. Others are textiles, wheat and rice (EAC, 2018: 20).

Exports to the EU from the EAC mainly concern coffee, cut flowers, tea, tobacco, fish and vegetables.

China has since the end of the Cold War stepped up its investments with Africa rapidly as illustrated in the figures below:

72 LynetteA. Odondi

EU trade with EAC 2016-2018 (billion euros). Source

Figure 4.1 EU trade with EAC 2016-2018 (billion euros). Source: European Commission.

Total EAC exports

Figure 4.2 Total EAC exports: 2014-2018 (million American dollars). Source: adapted from EAC Trade Report 2018.

Global management consulting firm McKinsey & Company, while analysing the current and long-term trajectoiy of Chinese engagement, notes that China has become Kenya, Uganda and Tanzania’s biggest economic partner over the past two decades. More than 40% of about 10,000 Chinese firms operating in sub- Saharan Africa have made long-term, capital-intensive investment commitments (Sow 2017: 1-2). The EU (2014) Factsheet, however, provides figures which indicate that the EU is Africa’s biggest trading partner, accounting for 36% of

Total EAC imports

Figure 4.3 Total EAC imports: 2014-2018 (million American dollars). Source: adapted from EAC Trade Report 2018.

Africa’s trade in goods valued at €243.5 billion. It indicates that the EU is also the most open market recipient for Africa’s manufactured and processed goods. It also has trade agreements with 37 African states. What is not contested is that the balance of trade is in favour of the EU and China, as illustrated in the figures above and below.

Intra-East African trade is lower than that with EU and China, and has been declining as illustrated in the tables and figures below:

The EAC has changed the terms of trade to enhance intra-East African trade. There is, however, still a lot to be done to revert this trend, as illustrated in Figures 1-4 and Table 4.1. These figures show that East Africa is trading substantially more with the EU and China than within its own region, where intra-EAC trade has stagnated (see Figures 4.5 and 4.6).

Copper (2016: 1-2) assesses China’s aid and investment as instruments of its foreign policy. He examines its achievements, shoxTcomings and political impact as China is shaping its place as a leading world power. Despite having no history of colonising Africa, it offers an alternative source of foreign aid with minimal conditions which African leaders readily receive. The first phase of funding in the early and mid-1960s supported African independence struggles. The Tan-Zam railway from Dar es Salaam to central Zambia was the largest project funded at the time. China, however, used its own engineers and workers. Such projects also gave it a physical presence in the countries crossed by the railway line. China sought diplomatic ties to garner support for its stand on socialism, colonialism and imperialism. It also relied on Africa’s support to gain entry into

China/Africa trade 2002-2018 (billion American dollars). Source

Figure 4.4 China/Africa trade 2002-2018 (billion American dollars). Source: China- Africa Research Initiative & John Hopkins School of Advanced International Studies.

the United Nations and to undermine Taiwan’s legitimacy. The second phase of funding was in the 1980s after the end of the Cold War. China made pledges fox- large investments. It created economic zones, offered debt relief and lowered tariffs to either facilitate market access or mitigate severe trade imbalances. Recent unexpected economic growth in Africa is partially attributed to China’s aid and investments.

 
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