China-Africa Supply Chain Cooperation: Challenges and Opportunities
China-Africa Supply Chain Cooperation presents both challenges and opportunities for development. The growth of China-Africa supply chain is crucial, considering Africa's participation in the global supply chain mainly focused on providing primary products. The strategic importance of this relationship is evident, with China and Africa rising as key trading partners. Key areas of cooperation include the mining industry supply chain, with China heavily reliant on African mineral resources. Enhancing regional supply chain participation within Africa is imperative for further development.
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China-Africa Supply Chain Cooperation: Challenge and Opportunity Prof. Huang Meibo Shanghai University of International Business and Economics
Content 01 China-Africa Supply Chain and its Development Challenges and Opportunities of China-Africa Supply Chain 02 03 Suggestions for the Promotion of China-Africa Supply Chain Cooperation
Part 1 China-Africa Supply Chain and its Development
China-Africa supply chain and its development 1. Characteristics of African participation in the global supply chain 1.1 Mainly providing primary products 1.2 Participation in the global supply chain is limited but increasing 1.3 Regional supply chain participation within the continent needs to be increased Africa's main export products
China-Africa supply chain and its development 2. The strategic importance of China-Africa supply chain and its position in the global supply chain 2.1 The absolute and relative positions of China and Africa as each other's trading partners are on the rise. 2.2 The China-Africa supply chain is an important link in the China-centered global supply chain. Proportion of African import and export target countries /regions Africa's share of China's total imports and exports (unit: %) 0.7 0.05 0.05 0.6 0.04 0.5 0.04 0.03 0.4 0.03 0.3 0.02 0.02 0.2 0.01 0.1 0.01 0.00 0 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 export import EU-27 China US ASEAN India Source: Trademap database Source: Trademap database
China-Africa supply chain and its development 3. Development of a major China-Africa supply chain 3.1 Mining Industry Supply Chain China's dependence on some important mineral resources in Africa is relatively high China-Africa cobalt supply chain Guinea bauxite supply chain China-Africa pure copper supply chain Dependence of China's Important Resources on Africa in 2021 mineral resources country South Africa DR Congo Guinea Rwanda China's dependence 42.9% 74.5% 57.1% 17.8% 99.9% 52.7% 10.2% 75.8% Manganese, Chrome, Platinum, Zirconium Cobalt Bauxite Tungsten Crystalline graphite Madagascar and Mozambique Data source: Compiled from China Customs data
China-Africa supply chain and its development 3. Development of a major China-Africa supply chain 3.2 Agricultural supply chain China-Africa coffee supply chain: control the quality of coffee and trace the source. Dried Chili Supply Chain in Rwanda: Quarantine Cooperation. Cocoa Supply Chain in C te d'Ivoire: Cocoa Processing Plant and Cocoa Bean Warehouse Construction Project in C te d'Ivoire. 3.3 Manufacturing Supply Chain China-Africa automobile supply chain: China-Africa Foton Investment Co., Ltd. has built a whole industry chain platform integrating investment and trade. China-Africa textile supply chain: Mina Textile, Deer King Cashmere, and Benin Textile help Africa to establish and transform medical institutions to fight the new crown epidemic, and stabilize the China-Africa manufacturing supply chain.
Part 2 Challenges and Opportunities of China-Africa Supply Chain
Challenges and opportunities of China-Africa supply chain 1. Opportunities for China-Africa supply chain in the post-pandemic era 1.1 The rapid development of e-commerce and mobile payments Major e-commerce platforms in Africa B2B China-Africa cross-border e-commerce platforms E-commerce platform Jumia Kilimall Takealot Mall for Africa Topspin Afrindex Amanbo Main markets Nigeria, Egypt, Morocco Nigeria, Uganda, Kenya South Africa Nigeria, Ghana, Kenya Ghana Tanzania Kenya The increasing improvement of e-payment Fast promotion of e-payment Launch of the Pan-African Payment and Settlement System ICT infrastructure provides technical support Partial privatisation of state telco, undersea cable landing station
Challenges and opportunities of China-Africa supply chain 1. Opportunities for China-Africa supply chain in the post-pandemic era 1.2 Infrastructure construction improves logistics efficiency and quality Chinese logistics companies work in Africa to help Chinese and African foreign trade companies shorten the delivery time of goods Company China-Africa cross-border logistics service company, BUFFALO yuan. WIFFA China-Africa Logistics Special Alliance Provide cross-port booking, third-party inspection and African logistics end- to-end services. Alibaba's logistics company, Cainiao Network Open China-Africa cross-border parcel line. "China-Africa Logistics Cooperation Working Committee" of China-Africa Chamber of Commerce Contribution The cost of cross-border logistics has dropped from 50-120 yuan to 10-30 Solving the problem of China-Africa supply chain rupture. African countries promote the improvement of logistics conditions China-Africa Sea-Air Express Line in Djibouti Free Trade Zone. Ethiopian Airlines increases investment in cargo services infrastructure and build e-commerce warehouse. Many African countries invest in road infrastructure. China-Africa supply chain logistics rises to national strategy Hunan-Guangdong-Africa railway-sea combined transport channel, "One Belt One Road" China-Africa two-way logistics golden channel.
Challenges and opportunities of China-Africa supply chain 1. Opportunities for China-Africa supply chains in the post-pandemic era 1.3 Digitization of Information Management The information sharing platform of African countries has begun to take shape. In October 2020, the Africa Trade Watch website launched to identify and compare trade opportunities in Africa. Digitization of informal supply chain provides a wealth of primary data for information management. China-Africa digital economy cooperation continues to advance The China-Africa Cooperation Vision 2035 clearly states: Develop digital industries and bridge the digital divide. 1.4 Continuous improvement of enterprise supply chain management level The COVID-19 has forced companies to improve their post-sales service, inventory management, and logistics and distribution technologies.
Challenges and opportunities of China-Africa supply chain 1. Opportunities for China-Africa supply chain in the post-pandemic era 1.5Promoting effect of the African Continental Free Trade Area Increase internal trade to drive economic recovery in Africa Trade between African countries in sectors such as industry, energy, mining and agriculture will increase by 30%. Services sectors including finance, commerce, transport and tourism will increase by 50%. Promoting Intra-African Infrastructure Integrated high-speed network plans and sub-regional centers in Africa (eg: East Africa Smart Logistics and Fulfillment Center in Ethiopia). Therefore, the African Continental Free Trade Area will promote the construction of intra- regional logistics infrastructure and the level of digitalization and improve the integration level of business flow, logistics, information flow, capital flow and service flow. So, it can improve the internal supply chain service system in Africa.
Challenges and opportunities of China-Africa supply chain 2. Challenges for China-Africa supply chain in the post-pandemic era 2.1 Declining productivity and social unrest Production capacity of African factories declines Unemployment rises and more social unrest Poverty and inequality increase Block Inclusive economic growth in Africa 2.2 Supply chain capital flow is tight Consumer payment delays Advance payment increased Inventory backlog Source: UNCTAD
Challenges and opportunities of China-Africa supply chain 2. Challenges for China-Africa supply chain in the post-pandemic era 2.3 Supply chain security and sustainability issues come to the fore front Supply chain security Supply chain security is defined as "resistance to damage or disruption to the supply chain". The four trend of supply chains: reshoring, diversification, regionalization and replication Promoting the decentralization of raw material sourcing Intensifying unfair competition with China-Africa supply chains Supply chain sustainability The China-Africa supply chain should be fully resilient to maintain a sustainable development path. The United Nations divides supply chain sustainability into four parts: human rights, fair labor, environmental protection and anti-corruption. They are the directions to maintaining sustainability of the China-Africa supply chain. Sustainability comes down to institutional sustainability.
Part 3 Suggestions for the Promotion of China-Africa Supply Chain Cooperation
Suggestions for the promotion of China-Africa supply chain cooperation 1. Deepen China-Africa cooperation in infrastructure and key technologies, increase the digitization of supply chain China should continue to increase investment in Africa's infrastructure, especially digital infrastructure. China should transfer advanced technology, management and operational experience. 2. Advance the sustainability of strategic energy supply China and Africa need to adopt a more flexible diplomatic strategy to maintain good relations with neighboring countries. Actively publicize the achievements of China-Africa energy cooperation and combat false remarks by Western media. Chinese mining companies should actively expand the African market and strengthen investment in minerals needed for new energy development.
Suggestions for the promotion of China-Africa supply chain cooperation 3. Ensuring the Security and Robustness of Central African Supply Chain Shorten the China-Africa supply chain: establish point-to-point supply chain and connect them into a long regional supply chain between China and Africa. Both China and Africa should work towards the two ends of the smile curve to achieve a rise in the value chain. China and Africa should attach importance to the security of resource products supply and ensure the supply of special resources needed by both sides.
Suggestions for the promotion of China-Africa supply chain cooperation 4. Strengthen China-Africa quality inspection cooperation and improve China-Africa customs clearance efficiency Quality inspection China should help Africa build national quality infrastructure; industry associations should initiate quality certification projects; China and Africa should jointly promote the cultivation of talents in the field of laboratory testing and certification technology in African countries. Clearance efficiency China and Africa should speed up mutual AEO certification; two side should strengthen the service awareness of the customs and fully cooperate with the customs clearance of international express companies; Chinese and African enterprises should accumulate customs clearance experience and try to establish their own customs clearance companies.
