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Sino-African International Trading is Getting More Prosperous
Time Published:2016/04/23 09:30       Browse Times:Times         News Sources:www.wanhaomaoyi.com/en

Guangzhou's shipping facilities connect 'world's factory' with booming consumer market in such nations as Nigeria and South Africa

Container shipping between the South China port of Guangzhou and African destinations is expected to notch strong growth after generating a more than 50 percent increase for Guangzhou Port Co every year since 2009.

The company's business with Africa was slightly greater than its business with Europe or the United States, and accounted for 12 percent of its container trade volume, according to deputy general manager Song Xiaoming.

The port of Guangzhou ranked fifth in China and eighth globally in container throughput last year. It handles the most China-African shipping lines in South China.

Song's company is the largest port operator in Guangzhou, taking up 85 percent of the container throughput.

"The throughput of our company serves as a barometer of the trade between China and Africa," Song says.

China has been Africa's largest trading partner since 2009. Despite the overall weak foreign trade picture, China-Africa trade rose by 5.5 percent to $221.9 billion last year.

Guangzhou, capital of Guangdong province, has long been a center for commodity sourcing for Africa-related trade, Song says, adding that Baiyun district and the area around Xiaobei Road are home to a large number of African buyers.

Goods they source include home appliances, furniture and garments, with a rapid growth in motorcycles, batteries and building materials in recent years.

Goods imported from Africa include lumber, stone, ores and chemicals, which are shipped to factories such as furniture firms in Shunde and Zhongshan, stone materials factories in Yunfu, and smelting operations in the Pearl River Delta and inland areas of China.

In the region about 100 kilometers from the deep-water Nansha port area in Guangzhou, economically dynamic Pearl River Delta cities are excellent sources of goods for export, Song says. The Nansha port area is the largest of the four port areas in Guangzhou.

China-African trade has seen rapid changes in the past few years, with increasing exports of high-end machinery, telecommunications equipment, electric and electronic equipment and automobiles to Africa.

"This trend is estimated to be related to the rapid development of infrastructure construction, the energy sector and ore exploration," Song says.

Customs, inspection and quarantine authorities and the local government have facilitated the trade between Guangzhou and Africa.

Nigeria accounts for the largest share of the Africa-related container business of Song's company, followed by South Africa, Angola, Benin and Tanzania.

Launched in 2007, the routes between Guangzhou and Africa have increased to 19 and are operated by shipping companies such as Maersk, CMA CGM, China Shipping, COSCO, NileDutch and Evergreen.

Song sees promising prospects and room for sustainable growth in African routes, considering the present strong position of Guangzhou Port in China-African trade, emerging consumers in Africa and eye-catching overall growth in China-African trade.

He cited projections by Standard Chartered Bank that consumer spending in Africa south of the Sahara would surge from $600 billion in 2010 to $1 trillion by 2020.

"With the upgrades in the economic value chain in both China and Africa, bilateral trade is set to expand from raw materials and low-value products to higher value-added products and services.

"The emerging consumer group in Africa will allow bilateral trade and investment to cover more African countries.

"The renminbi is expected to become a core currency in payment, investment and reserve in Africa," Song says.

Hapag-Lloyd and China Shipping each have opened a new African shipping route from Guangzhou's port this year and more new African routes are expected to come on line.

Guangzhou Sea Coast International Freight Co, a freight forwarding company, expects its business on the Guangzhou-Africa route, by both sea and air, to grow by 30 to 50 percent annually in the years to come. Such business is contributing more than 10 percent of its total revenue, says Yu Xueqin, general manager of the Nansha branch of the company.

Among the developments spurring business is China's Belt and Road Initiative, referring to the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives, transport infrastructure projects linking Asia, Europe, Africa and other areas and proposed by President Xi Jinping in 2013.

"We expect the trade between Guangzhou and Africa to advance rapidly with the progress of the Belt and Road Initiative," Yu says.

Other factors are the promotion of overseas investment by Chinese companies, the establishment of free trade zones, the government's support for cross-border e-commerce, lower tariffs, investment facilitation, and improved customs and financial services.

Guangzhou is the biggest source city in Asia for exports to Africa, says Charlie Sun, sales general manager of Maersk Line Guangzhou Office.

The office has seen steady annual growth in Africa-related business of about 10 percent in the past few years, thanks to increasing demand and Chinese investment in Africa.

This year, however, growth in exports to Africa, especially West Africa, has dropped off, Sun says, due to factors such as falling fuel prices, the political situation in Nigeria and the weakening world economy, especially the European economy, which have affected large African economies such as Nigeria, Angola and Ghana.

"We foresee exports will be up from the third quarter and thereafter. East African countries such as Kenya and Tanzania will continue their annual growth thanks to the increasing local demand and less dependence on income from fuel production.

"We forecast Sino-African trade will continue to grow in the coming years, as Africa's population still grows and more Chinese companies invest in Africa," Sun says.

To facilitate business, the construction of a railway in the Nansha port area will start soon, linking the port area with inland provinces in South China and Southeast China.