Oil-Hungry China Dwarfs U.S. Africa Trade: Chart of the DaySimbarashe Gumbo and Mike Cohen
Africa’s trading relations have undergone a shift since China began targeting the continent as a source of oil and minerals, and a market for its manufactured goods.
The CHART OF THE DAY shows two-way trade between China and the 49 sub-Saharan African nations is 2.7 times that of the U.S., which was the region’s largest trading partner until 2009.
“The obvious reason is that Chinese demand for resources has grown rapidly, and Africa is providing a large proportion of those resources,” Elna Moolman, an economist at Macquarie Group Ltd., said by phone from Johannesburg yesterday. “China’s economy is also growing a lot faster than the U.S., which also partly explains its rising share of trade.”
While China runs a trade deficit with Africa, the U.S. this year has a surplus that’s widening as increased shale gas production curbs its crude oil purchases from countries such as Nigeria and Angola.
President Barack Obama will host more than 40 African leaders at a three-day summit in Washington next week, with a view to boosting trade with the continent.
Key to achieving that goal will be securing Congressional approval for the extension of the African Growth and Opportunity Act, which gives African nations duty-free access to U.S. markets. In order to qualify, countries must meet conditions, including respecting property rights and taking steps to combat corruption and reduce poverty. The act, which was adopted in 2000 and extended in 2004, is due to expire next year.
(An earlier version of this story corrected the name of the African Growth and Opportunity Act.)