China Will Replace Europe As Africa'S Largest Trading Partner.

In the early fifteenth Century, Zheng He led the fleet seven voyages to Arabia Peninsula and the east coast of Africa, and achieved a legend in the history of navigation.

Before that, China and Africa have been developing trade for centuries, but this is hardly known.

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< p > trade between China and Africa can be traced back to 200 BC. Scholars and travellers from Africa, Arabia and Asia have repeatedly recorded the flourishing trade of porcelain, silk, cotton, gold, ivory and irons between China and Africa.

The trade benefited both the central and African dynasties, and flourished throughout the Tang Dynasty, the Song Dynasty, the Yuan Dynasty and the Ming Dynasty until sixteenth Century.

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In the next 4 centuries, China ceased its trade activities with other parts of the world. Until the founding of new China, it began to develop relations with other developing countries and restart the India ocean route.

However, the start was still relatively slow, and the volume of Sino African trade did not exceed $1 billion until 1980s.

Since the establishment of the China Africa Cooperation Forum in 2000, Sino African trade has been developing rapidly, and total trade volume has increased 29 times to 210 billion 200 million US dollars by 2013.

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< p > although the growth of Sino African trade is eye-catching, there is still much room for improvement.

Based on the successful experience of Standard Chartered Bank in the 150 years of trade and Commerce in China and Africa, we believe that the trade between China and Africa will have three complementary trends: < /p >

< p > < strong > extended high value-added products and services < /strong > /p >

< p > according to the current development trend, China will replace Europe as Africa's largest trading partner in a few years.

However, these years, China Africa trade is still largely confined to Africa's export of oil and other mineral resources. China's exports of textiles, clothing and low price machinery have not changed until recent years.

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< p > Trade and products in China and Africa are undergoing rapid changes.

In recent years, China's rapid export of high-end machinery, communications equipment, electronics and electrical equipment to Africa, as well as motor vehicles, has become a major part of China's export to Africa.

Through these products, China can participate more in infrastructure construction in Africa as a whole, and China's investment in energy and mineral exploration industry in Africa is also increasing.

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< p > on the other hand, as China has strong demand for energy, it is also actively seeking sources of energy and mineral resources outside the Middle East. Resources will continue to dominate Africa's exports to China in the next few years.

At present, about 1/3 of China's oil imports come from Africa.

The export of resources has brought urgently needed funds to Africa, but African governments are also taking measures to reduce their dependence on exports of raw materials.

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African governments from South Africa to Somalia are opening their economies to foreign direct investment to enhance their position in the value chain. < p >

Chinese enterprises have worked with local governments to invest billions of dollars in Africa's roads, railways, ports, airports and power plants, partly to offset the gap in Africa's annual infrastructure funding of about $93 billion.

The development of infrastructure will enhance the attractiveness of Africa to global enterprises and help Africa get rid of its dependence on resource exports.

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< p > food processing has great opportunities in providing high value-added export products.

Africa has 60% of the world's uncultivated and cultivated land, of which only 10% can use tractors and 4% have irrigation facilities.

By promoting scientific farming technology to increase productivity, and then delivering output to food processing enterprises, and then selling it to Africa and the whole world, millions of job opportunities can be created for Africa.

On the other hand, China is facing the pressure of arable land caused by rapid urbanization.

China has begun importing agricultural products from the United States and Latin America, and Africa is likely to become its next major source of imports.

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< p > < strong > the rise of the consumer class creates < a href= > http://www.91se91.com/news/index_c.asp > market demand < /a > /strong > /p >

< p > the rise of African consumers is another major trend in recent years.

Standard Chartered Bank's research department estimates that consumer spending in sub Saharan Africa will increase from $600 million in 2010 to $1 trillion in 2020.

This can meet China's export demand precisely because China is looking for new markets for its high-value goods and services.

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< p > Chinese enterprises have begun to enter this undeveloped consumer market.

Traveling in Africa, you will see more innovative and lower priced "made in China" cars, which are competing with manufacturers from Japan and Europe.

Similarly, China's high-tech electronic products and home appliance brands are also competing for products with Korean and Japanese products.

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Besides P, Chinese enterprises are also further integrating into African countries. They have not only established the Sino African trade network, but also provided a trade network among African countries and Africa and the whole world.

Many enterprises are also considering moving the manufacturing base to Africa to keep close to the local market.

At present, China has invested in the establishment of export special zones in Ethiopia, Nigeria, Zambia, Mauritius and Egypt.

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The three major regional free trade areas of the African continent, the southern African development community, the eastern and southern African common market and the East African community, have also facilitated this integration. P

These regional free trade zones have also played a key role in launching intra state trade. Next, they will be merged into the "free trade area of Africa", covering the entire African continent from Cape Town to Cairo.

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< p > the free trade area will have more than 630 million people, most of whom are young people, and the total amount of GDP will reach US $1 trillion and 200 billion.

With the increasing number of middle class a href= "http://www.91se91.com/news/index_c.asp" and /a and the improvement of political and financial stability, the free trade area of Africa can compete with other economic alliances in the world, and at the same time enable Africa to negotiate free trade agreements with other trading areas.

This is similar to what ASEAN economies hope to benefit from the imminent economic integration.

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< p > < strong > < a > href= > http://www.91se91.com/news/index_c.asp > RMB > /a > will play a greater role.

< p > another major trend accompanying the Sino African trade corridors is the use of RMB in Africa.

The rapid development of trade, the increasing investment in Chinese enterprises, and the financial assistance and subsidized loans provided by the Chinese government and related institutions provide a solid foundation for the promotion of RMB in Africa.

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The trade between China and Africa, which was settled in RMB in 2012 P, amounted to US $5 billion 700 million, accounting for 3% of China's Africa trade.

On the other hand, Africa accounts for 5% of China's Global trade in that year, but the trade settled in RMB (even including parts of Africa and Hongkong) accounts for only 0.2% of the global yuan's payment.

Therefore, there is still room for huge growth in the use of the renminbi.

Commodities occupy a larger share in Sino African trade, and huge changes will take place when commodity prices begin to be priced.

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RMB P has become an acceptable currency for trade settlement, and central banks in Africa will also use Renminbi as a foreign exchange reserve.

At present, the RMB has become an integral part of the central bank's foreign exchange reserves of Angola, Nigeria, Tanzania, Garner, Kenya and South Africa.

As China looses RMB convertibility (Standard Chartered expects to achieve convertibility of RMB capital account in 2020), the attraction of RMB as reserve currency will increase day by day.

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< p > China's strategic support for Africa's economic development has made it a favorable position in Africa.

The rise of the middle class in Africa and the improvement of China's value chain are releasing market potential and driving the growth of trade.

Trade will be a good start in the new chapter of China Africa development.

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< p > with the development of bilateral partnership, Africa is expected to become the main manufacturing base of leading enterprises in China and the main source of food supply in China.

We expect that the African government and some large enterprises will issue dim sum debt to raise funds.

In the near future, the renminbi may also become the core currency of the central bank's foreign exchange reserves.

We believe that trade between China and Africa will usher in a more colorful, sustainable and win-win situation.

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