info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
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North Africa offers Chinese companies the opportunity to "Europeanized" goods, and the North market is more likely to enter the European market than products made in China.
China defines the region as "West North Africa" and includes all countries from Sudan to Morocco in it. Beijing has established strategic partnerships with Morocco, Sudan, Algeria and Egypt.
The quest for resources to fuel its industrialisation — hydrocarbons from Algeria, Sudan and Libya; iron ore from Mauritania; copper zinc, lead and fertilisers from Morocco — cannot hide the special importance of Sudan, which sent 94% of its exported oil to China in 2016. Libya used to export 10% of its oil to China, a figure that collapsed in 2011 but shot up to $3.5 billion last year as oil production in Libya increased.
Trade balances everywhere are in China's favour. Its aggregate exports of $25 billion are worth five times its imports. The Chinese commercial surplus is noteworthy in the case of Algeria, which imports an average of $7 billion-$8 billion of goods annually and exports around $1 billion.
Chinese exports of $1.4 billion to Tunisia are not matched by imports worth a meagre $25 million. Tunisian exports to China were multiplied by one-and-a-half from 1999-2015 but imports grew by a factor of 35. Machinery of every kind account for more than half of all imports and displaced French, German and Italian equivalents because they are cheaper. Chinese imports account for 28% of Tunisia’s trade deficit.
China's presence in the region is often focused on infrastructure — big-ticket projects such as the East West Highway and Africa's longest railway tunnel in Algeria, bridges in Morocco and Egypt’s new administrative capital.
Under former Tunisian President Zine el-Abidine Ben Ali, discussions with China led to projects that included a large new port at Enfidha and upgrading the Tunis-to-Algiers railway.
In a strategic sense, China is keen to be present in Tunisia and Morocco because those countries offer easier access to the EU markets. Hence, its interest in Tangier and Kenitra, which have become major hubs for the assembly of cars for re-export across Africa.
Such a region offers Chinese companies the opportunity to "Europeanise" goods it makes, which benefit from easier access to European markets than products made in China.
As Morocco increases Tanger Med 2's container handling capacity to 4.5 million tonnes by the end of the year, the port will become the primary port destination in the Mediterranean and is expected to soon surpass the two largest commercial ports in the region — Algeciras and Valencia in Spain.
Equally important was the launch in March 2017 of Mohammed VI Tangier Tech City, a 2,000-hectare project in which 200 Chinese companies specialising in aeronautics, vehicle spare parts, textile and food processing will eventually constitute China's biggest industrial platform in Africa. This project is a joint venture between the Chinese group Haite, BMCE, one of the kingdom’s two leading banks; and the Tangier-Tetouan regional government.
Since November, Tangier is linked to Casablanca, which boasts an active Casa Finance City whose focus is Africa, by the first fast rail train built in Africa. Tunisia could provide the basis for the Chinese manufacturing of photovoltaic solar panels, train and metro carriages and fertiliser, which Tunisia produces from its phosphate rock. Here again, Morocco's state phosphate and fertiliser company OCP is way ahead in its joint ventures with China.
