How China’s moves to balance African trade are being driven by a taste for avocado

[Nan Yang]

How China’s moves to balance African trade are being driven by a taste for avocado​

• The avocado has caught on among the Chinese middle-class, good news for Beijing’s aims to import US$300 billion in African farm produce by 2025
• Tanzania has joined Kenya in exporting the super fruit to China, with South Africa also looking for market access

Jevans Nyabiage
Published: 10:00pm, 3 Dec, 2022

After more than two decades of massive mining and infrastructure projects, Chinese diplomacy in Africa is being shaped by a new strategy – with the avocado at its centre.

Avocados are increasingly popular among China’s new health-conscious middle class, with trendy chefs now adding the “butter fruit” to many dishes.

That is good news for China, as it seeks to recalibrate African trade where it has long recorded a surplus while also diversifying from Latin America into other source markets for the super fruit.

Total trade with Africa hit a record US$254 billion in 2021, but most of it was in China’s favour – as it had been since 2012. China mostly imports natural resources such as crude oil, copper, cobalt and iron ore for its industries while Africa buys from China finished products such as machinery, electronics and textiles.

African leaders have for years urged Beijing to act on the deficit, especially as many countries need to pay off debts worth millions of dollars, a major part of it owed to China for its Belt and Road Initiative infrastructure loans.

Beijing has shown it is keen to address the imbalance, with President Xi Jinping last year promising to import US$300 billion of African agricultural produce by 2025.

Following Kenya in July, Tanzania last month became the second African nation to export fresh avocados to China – under a deal signed during President Samia Suluhu Hassan’s November 2-4 state visit to Beijing.

Chinese President Xi Jinping and Tanzanian President Samia Suluhu Hassan in Beijing. Photo: Xinhua

Kenya had in 2019 been granted market access for frozen avocados, but this was restrictive as most farmers could not afford freezing equipment. The deal was renegotiated early this year to allow in the fresh variety.

South Africa is another African nation looking to export avocados to China.
Beijing’s ambassador to South Africa, Chen Xiaodong, has said China is committed to imports worth US$100 billion from South Africa by 2025, focusing on “more high-quality products, including avocados”.

South Africa is China’s key source market for fruit such as lemons, grapefruit, oranges and soft citrus. Mozambique and Zimbabwe are also lobbying to export avocados to China.

An interest in the avocado’s health benefits has fuelled the fruit’s growing popularity in China, where it was largely unknown less than a decade back.

In 2010, China imported only 2 tonnes of avocado, according to Hannah Ryder, chief executive officer of Development Reimagined, a Beijing-based consultancy.

By 2017, the volume had grown to 32,140 tonnes, an increase of about 16,000 times in seven years, before hitting 43,860 tonnes in 2018 – with an import value of US$133.38 million.
After a dip in 2019 and 2020 caused by Covid-19 curbs, Chinese imports of the fruit rose again to 41,374 tonnes in 2021, according to US data.

Ryder said avocados from the Philippines and New Zealand were pricier and therefore China imported mainly from Chile, Peru and Mexico. However, China’s “[import] diversification drive and African demands can explain why it is also focusing on East Africa for avocados”, she said.

Green Gold: What you need to know about avocado from Tanzanian soil

During a recent historic State visit to China by President @SuluhuSamia, #Tanzania & #China signed a Protocol of Phytosanitary Requirements for the Export of Fresh Avocado from to China.@MbelwaK @ChineseEmbTZ pic.twitter.com/LVeWHHrPF4


— Daily News Tanzania (@dailynewstz) November 26, 2022

Kenyan Hass avocados were also different from the South American varieties, she said. “Hass avocados have a richer, nuttier flavour and softer ‘meat’. They also have a longer shelf life and are better for culinary purposes.”

Yun Sun, head of the Stimson Centre’s China programme in Washington, said the Chinese were returning to tradition when it came to trade with Africa.

“China is trying to boost agricultural trade with Africa, which represents a return to the traditional after the efforts to boost industrialisation and hard infrastructure of African countries,” Sun said.

“It is a recognition of the type of mutual complementarity between China and Africa.”

But Sun also sees a potential problem with this approach, saying the avocado is famous for its negative impact on the environment. “China itself has criticised the US for consuming too much avocado and destroying the environment in Mexico,” she noted.
Avocado trees require a lot of water to produce – about 70 litres (1.8 pints) per fruit according to some studies – and have been blamed for biodiversity loss as farmland is used to cultivate the more lucrative crop.

Charles Robertson, global chief economist at investment bank Renaissance Capital, said importing more food products from Africa was part of China’s attempt to reduce the hugely unequal trading relationship.

African avocados on display at a an import expo in Shanghai. Photo: Xinhua

China’s exports to Africa in the 12 months to October totalled US$163 billion, while imports were US$120 billion, Robertson said, citing official data.

“Buying avocados will make [only] a little dent in China’s huge trade surplus, but every little gain helps,” Robertson said.

China also recently waived tariffs on 98 per cent of taxable items from dozens of least-developed countries (LDCs), most of them in Africa.

The move is in line with Xi’s promise at last year’s Forum on China–Africa Cooperation (FOCAC), to open up “green lanes” for African agricultural products, speed up inspection and quarantine, and widen the tariff-free items basket, so that imports hit US$300 billion by 2025.

“Avocados are in high demand in China and need a specific subtropical environment and soil quality to develop the characteristics prized by consumers,” said Carlos Lopes, professor at the University of Cape Town’s Mandela School of Public Governance and a former executive secretary of the UN Economic Commission for Africa.

Lopes said South Africa was traditionally a very efficient fresh produce exporter and its expertise was being used elsewhere in Africa.

Lopes said South Africa was traditionally a very efficient fresh produce exporter and its expertise was being used elsewhere in Africa.

China is also keen to import soybean, sesame seeds, chilli peppers, cashew nuts and spices from Africa. “[These] are in high – fairly consistent – demand in the Chinese market and therefore easier to find active buyers for right now,” Ryder at Development Reimagined said.

Ryder said Sudan, South Africa, and Ethiopia had been the top African agricultural exporters to China for the past five years, and some of the most popular items were oleaginous fruit, coffee, ground nut, molluscs and frozen fish.

“So, diversification is happening with the new products,” she said.

Overall, China has an explicit policy to diversify food imports for “food security”, so focusing on Africa fits into that plan.

China imported a record US$5 billion worth of African farm produce in 2021, an increase of more than 18 per cent from the previous year, according to official Chinese data. However, Africa still accounts for only 3 per cent of China’s total agricultural imports.
China’s demanding food safety protocol is one hurdle for African exporters, along with many tariff and non-tariff barriers that Beijing prefers to negotiate on a country-by-country basis. Observers also say African countries are not bringing sufficiently diverse and competitive products to the table.

#FOCAC

Features of #ChinaAfrica relationship and cooperation: sincere friendship and equality, win-win for mutual benefit and common development, fairness and justice, and progress with the times and openness and inclusiveness.
pic.twitter.com/NC5fHBtqrr


— Chinese Embassy in Zimbabwe (@ChineseZimbabwe) November 30, 2021


African nations have long pushed for China to do more to address the overall trade imbalance, but action has come decades after the first promises were made.

In 2003, during the second FOCAC meetings, China committed to “expand market access to African products”, and then at the 2006 forum offered zero-tax access for 95 per cent of products from 33 LDCs in Africa, Ryder said.

Encouraging African agricultural products to enter the Chinese market was first mentioned in the FOCAC 5 Action Plan of 2012, she added.

“It’s really since 2015 that the policy has moved significantly in terms of implementation. There are now in principle over 350 kinds of agricultural products from African countries that can be exported to China.”


Jevans Nyabiage
Kenyan journalist Jevans Nyabiage is South China Morning Post's first Africa correspondent. Based in Nairobi, Jevans keeps an eye on China-Africa relations and also Chinese investments, ranging from infrastructure to energy and metal, on the continent.

 

[Skull and Bones]

Avocado farming is growing in India too because of domestic demand.

 

[Nan Yang]

China's investment to Africa has already reached critical mass. China's government no longer needs to do the pushing. Africa pulls in the investment by itself.

From Zhejiang to Hunan, Chinese provinces are taking the reins of trade with Africa

• Some Chinese regions have a long record of involvement with the continent and their companies are investing billions in commercial projects
• But the priority is still to make a profit, analysts say

Jevans Nyabiage
Published: 4:00pm, 4 Dec, 2022

China’s government is looking to its provinces to spearhead trade with Africa. Photo: Xinhua

For decades, the Chinese central government has been the main driver of China-Africa diplomacy, pumping billions of dollars into the continent’s infrastructure and trade.

But while it retains control over foreign policy agenda and direction, the central government is now empowering local and provincial authorities and their companies to spearhead the next phase of China-Africa trade.

One of the provinces at the centre of China-Africa trade is Zhejiang, a coastal province in eastern China home to companies that have built warehouses, industrial parks and e-commerce infrastructure in African countries.

Last week, Chinese companies in Zhejiang announced a plan to bankroll 26 projects in Africa worth US$8.1 billion in a bid to boost trade with the continent.

The projects included a 1 billion yuan (US$140 million) by Zhejiang Gezhi Trading, a subsidiary of Merit Link Group, and Zhejiang Yingfan Trading to build an overseas warehouse for Merit in Algiers, the capital of Algeria. The Jinhua city government said the facility was expected to serve the company’s operations in the Middle East, North Africa, and Central and Southern Africa.

The deal was signed last week during the 2022 China (Zhejiang) Forum on China-Africa Economic and Trade Relations and the China-Africa Cultural Cooperation and Exchange Week in Jinhua, Zhejiang province. The event attracted 400 delegates from China and 47 African countries.

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Lauren Johnston, a China-Africa researcher at the South African Institute of International Affairs, said Zhejiang was among China’s richest and leading provincial hub for private-sector small and medium enterprises (SMEs) and also “one of China’s richer and more freewheeling and experimental provinces”.

She said it was also home to Yiwu, the consumer goods centre that attracted hundreds of thousands of in-person and online traders from across Africa and the Middle East.

Further, e-commerce giant Alibaba and its global digital commerce promotion institution, the electronic World Trade Platform (eWTP), were based in Zhejiang, with eWTP hubs in Ethiopia and Rwanda, Johnston said.

Yun Sun, head of the Stimson Centre’s China programme in Washington, said Zhejiang had a long history of pushing for economic engagement with Africa. “Given Zhejiang’s industrial endowment and its prioritisation of foreign trade, this should not come as a surprise,” she said.

However, Sun said “the challenge is whether China could break free from the self-imposed Covid-19 restrictions”. “At the current rate, China’s priority will have to be domestic economic growth and social stability,” Sun added.

David Shinn, an expert on China-Africa relations at George Washington University’s Elliott School of International Affairs, said Chinese provinces had a history of engaging with other countries, especially in trade, investment, education, tourism, and culture.

“Beijing has encouraged these contacts but retains control over foreign policy,” Shinn said.

Shinn said Zhejiang had been especially active in Africa, with Zhejiang Normal University a leader in education cooperation as both the base of the Institute of African Studies and having trained more than 8,000 African students.

“Zhejiang has a tourism exchange programme with Zimbabwe, Tanzania, and Ethiopia,” he said.

However, Shinn said “if past practice is an indication, not all of these projects will materialise, but they nevertheless represent a significant investment”.

“The ultimate goal of most Chinese provincial engagement in Africa is to make a profit.”

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In a recent report co-authored by Beijing-based consultancy Development Reimagined, the China-Africa Business Council (CABC) said Zhejiang had adopted a “bottom-up” interaction mechanism to promote China-Africa cooperation with the strong involvement of civil forces, including private companies, service centres, research institutes, and local chambers of commerce.

In addition, as one of the first provinces in China to start implementing e-commerce, Zhejiang has also highlighted e-commerce and overseas warehousing in its cooperation with Africa.

The total trade between Zhejiang and Africa reached US$43.4 billion in 2021, an increase of 17.2 per cent over 2020, placing it among the top trading partners with Africa.

CABC’s report said that as one of the key manufacturing hubs and textile centres in China, Zhejiang had diverse exports to Africa, from light industrial products to a combination of mechanical and electrical products, car parts, and other industrial products.

“Zhejiang imports not only commodities from Africa but also more value-added products, such as red wine from South Africa and coffee from Ethiopia,” the report said.

Wen Meizhen, a China-Africa researcher in Zhejiang, said lower-level authorities in the province encouraged local companies to invest in Africa.

She said Zhejiang was also promoting cultural, medical and educational relations with Africa. Wen said Zhejiang had built different platforms to encourage China-Africa trade, such as hosting events and inviting African leaders to visit local companies in China.

“Local companies themselves have tried to extend markets in African countries. These companies are not state-owned enterprises, they are more flexible than the former. They go to places where they can make profits,” Wen said.

She said this was also driven by migrants – Zhejiang province traditionally accounted for the biggest Chinese migrant community in Africa.

“The migrants move to different places where they thought they could make them money. Many of them went to Africa and lived there, then the companies in their hometown followed them.”

Besides Zhejiang, other Chinese provinces such as Shandong, Guangdong, Hainan and Hunan, are signing individual deals to grow China-Africa trade. For instance, the Chinese province of Hunan, which is promoting itself as the hub for African agricultural trade, this week held a forum to link fruit buyers in China with producers in Africa.

In Africa, the province sources its fruit from South Africa, Kenya, Tanzania and Egypt. A statement released by Hunan authorities said several purchase agreements and strategic cooperation agreements worth 70 million yuan were signed during a China-Africa fruit promotion conference in Changsha in late November.

The province’s lawmakers early this year passed regulations to establish a free-trade zone and a distribution, trading and processing centre for African non-resource products, as well as the setting up of a “green customs clearance” system for African imports.

This is in line with President Xi Jinping’s promise during last year’s Forum on China–Africa Cooperation, to open up “green lanes” for African agricultural products, speed up inspection and quarantine, and expand the list of tariff-free items.

Industrial powerhouse Guangdong is another major Chinese province in the mix. Its trade volume with Africa hit US$43.71 billion in 2021, an increase of 9.5 per cent from the previous year, with mechanical and electrical products and agricultural goods the main exports.

It has invested in nearly 300 overseas enterprises in Africa, involving an estimated US$2.5 billion, while provincial capital Guangzhou hosts the most important sea entry and exit point for African trade, operating 22 container routes to major ports in the continent.