“All from China,” said Mustafa Adekule, 29, who sells suitcases and belts. “The quality is better than before, and the prices are low. China is helping us by making these products we can afford.”
His customers may be content, but some manufacturers and politicians on the continent are not. As South African President Jacob Zuma pointed out at the China-Africa Forum in Beijing, the current bilateral trade pattern — in which mainly raw materials flow out from Africa and finished goods come back — is not sustainable.
“Their business has been aggressive in Africa, in natural resources, in uranium, in oil,” Mahamadou Issoufou, president of Niger, said in an interview in London last month. “We are an open country — open to investors from anywhere. But we want ‘win-win’ partnerships, and that is our relationship with China. We will defend our interests and they will defend theirs.”
Chinese exports to Africa jumped 22 percent last year to hit $73 billion, more than double the gross domestic product of Kenya or Ethiopia. Chinese officials pledged to do more to encourage exports of African goods, including expanding the range of products that qualify for zero tariffs. “We should work harder to . . . improve the trade mix and upgrade trade,” Chinese President Hu Jintao said Thursday at the forum.
However, African manufacturers insist not enough is being done.
In some countries, notably South Africa and Kenya, cheap Chinese wares have forced local factories to close and acted as a disincentive to local production.
“You can’t compete with China. It’s impossible, as it’s not a level playing field,” said Stewart Jennings, chief executive of PG Group, a South African glass manufacturer, and chair of the Manufacturers Circle, an industry lobby group that counts BMW and SABMiller among its members.
A Chinese currency he believes to be 40 percent undervalued and the favorable financing and other incentives Chinese companies receive to go overseas mean South African businesses feel the competition acutely.
“If we had to compete with China, we would have to drop our wage rates by between 50 percent and 80 percent, and it can’t be done,” Jennings said. “And it’s causing significant job losses in Africa. To me, China is exporting unemployment.”
But the picture is complex, and varies from country to country. In Nigeria, Africa’s most populous nation, imports from China did affect local industries, especially textiles. But that was some years ago, and it could be argued that the country’s poor infrastructure and governance were as much to blame for the lack of competitiveness.