Making China’s Markets work for the Poor in African Countries

The world is currently on its tiptoes, wondering what the outcomes of the US-China trade discussions will be. Many commentators are also concerned about the state of the World Trade Organisation (WTO), created just less than 25 years ago, and whether it will survive this dispute between the world’s two largest economies.

At the same time, life must go on for those who are within the trading system, who are trying their very best to find and maintain markets for their products in other destinations. Most African countries fit into this category. While African imports into China hit a high point of 75.25bn in 2017, this still represents a tiny 4% of overall imports, and a great proportion of these imports are raw materials, including natural resources. The US imported less from African countries – a total of 33.4bn in 2017,  only 1.5% of the total.

Indeed, opportunity wise, the main draw is China.  The numbers speak for themselves – the size of China’s middle class is projected to reach 600 million by 2022 – that’s the same as the size of Africa’s entire youth population – and unemployed population… Consumption in China is increasing 16% per year – while in the US it’s just rising by 2%.

If there is a place for African businesses to look abroad to, its China. And if there is a time to look to China, it is now.

Why does this matter for development? Creating new markets in other countries can create jobs and improve lives at home by scaling up manufacturing for new buyers.

Yet, while donors from DFID to NORAD to USAID promote “aid for trade” programs, right now, there are few, if any, trade programs working in this area.

They should be. Because getting a slice of the Chinese consumer pie is hard work.

Consumer trends are constantly changing, e-commerce is huge, non-market barriers like import regulations (and language!) are onerous, and choosing the right business partners from distributors to what are known as “KOLs” (for those of us not in the know that means Key Opinion Leaders) is essential.

That’s why, together with an expert group of partners we have created a special new initiative to make the process of market entry significantly easier and lead to sustainable poverty reduction in African markets.  We want to make China’s market work for the poor.

We’ve development a bespoke program around the first ever China-Africa Trade Expo, to be held in Changsha, Hunan, supported by China’s Ministry of Commerce (MOFCOM). This expo will be one of the first practical arrangements under the FOCAC agreements and will aim to bring together Chinese and African businesses for 3 days of showcasing, lectures and networking. We have hand-picked 15 amazing and successful African businesses that are deeply committed to working with the poorest people in the world, to showcase their products in the expo. We’ve hand-picked them because of this commitment but also because we believe they have the best products. We want Chinese consumers to know that the African continent is one of the most dynamic places in the world, and that African countries have more to offer than raw tea and coffee.  We have to change perceptions of what African goods are.

At the same time turning up and showcasing at an expo simply isn’t enough! Our experience from the China International Import Expo (CIIE) in November, highlighted the vast difficulties businesses face during these expos. That’s why we have developed a program to help them navigate the difficult Chinese retail landscape and achieve tangible outcomes. The 15 businesses will get bespoke support, get the 101 of how to register, get import licences for and protect their products in China, as well as promote them to the right consumers, including using platforms from Tabao to Douyin. We will introduce them to interested buyers and help them access Chinese media channels too. We will take them to see warehouses as well as retail outlets they could have a presence in… and much more. This will be a truly unique and game-changing program.

That’s why our hope is that all the aid organisations out there, especially those focused on “aid for trade”, will join us on this journey too. To help create these 15 success stories and many more beyond.

Let’s make China’s huge market work for the African youth and African poor, together.

If you would like more information about this initiative or how you can get involved, send us an email ASAP

March 2019

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