BEIJING (Reuters) - China’s trade with African countries in the first quarter climbed by nearly a fifth from a year earlier, while its direct investment in the continent soared 64 percent, the Chinese commerce ministry said on Thursday.
Trade cooperation between China and Africa is “off to a flying start” in 2017, thanks to policy benefits from a cooperative framework laid down by the Chinese and African leaders in South Africa in 2015, said Sun Jiwen, spokesman at the ministry.
Chinese President Xi Jinping announced plans to plough $60 billion into African development projects at a summit in Johannesburg in 2015, saying it would boost agriculture, build roads, ports and railways and cancel some debt.
China’s total trade with Africa rose 16.8 percent to $38.8 billion in the first quarter, its first year-on-year increase since 2015, Sun told a regular news briefing in Beijing.
That’s mainly due to a 46 percent jump in annual imports from Africa in the first quarter with agricultural imports rising 18 percent, while Chinese exports recorded a smaller fall of 1 percent from a year earlier, Sun said.
China’s non-financial direct investment to the continent also jumped 64 percent in the quarter, as countries such as Djibouti, Senegal and South Africa all saw a more than 100 percent rise in the quarter.
China’s growing investment in the region is also likely to have been buoyed by its ambitious global trading strategy known as the Belt and Road Initiative, which appeared to be gaining traction recently, particularly in parts of East Africa where major infrastructure and defence projects are being built.
However, despite the bullish figures, some experts on China-African trade said that sharp price rises in products such as copper since late last year could be a major factor contributing to the impressive gains in trade value in the first quarter. China’s trade relations with African countries are often dominated by big natural resource deals.
There was also scepticism over Beijing’s willingness to ramp up trade and investment in Africa, as China appears to have been looking at investments in resource-rich markets with better economic performance such as Peru.
Chinese firms rushed to court the remote African continent in the past because of stiff competition from savvy western multinationals in traditional resource-rich countries, said Kai Xue, a Beijing-based lawyer and Africa expert at DeHeng Law Offices.
But Africa’s strategic significance has been fading as competition lessened with the downturn in global commodities in recent years, leaving a gap for China to fill, while slowing growth in Africa muted some Chinese interest, he said.
“There could still be increases (in trade and investment to Africa) every year in a decline scenario, because China’s economy is still expanding quite considerably. But a modest growth figure is not comparable to the peak times in the past.”
Xue added that the Belt and Road Initiative may actually divert some of the Chinese financing away from Africa as China moves increasingly closer to other allies such as Pakistan.
Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for more balanced trade relations.
Reporting by Yawen Chen and Ben Blanchard; Editing by Jacqueline Wong