China's used cars, auto parts export to the African market new opportunities


Published:

2023-12-05

Since ancient times, China and the African continent have maintained close trade exchanges and friendly relations. In the past, the ancient Silk Road was one of the important trade links between China and Africa. Through land and sea transportation, ancient China and the African continent carried out trade exchanges at various levels and in various fields. This ancient trade exchange promoted the exchange of culture, goods and technology between the two places, bringing economic prosperity and opportunities for cultural exchange. The economic and trade cooperation between China and Africa began to strengthen gradually in the 20th century, especially after the establishment of diplomatic relations, the trade between the two countries has become increasingly frequent. China has become an important trading partner of the African continent, mainly covering resources development, infrastructure construction, agricultural cooperation and other fields.

Since ancient times, China and the African continent have maintained close trade exchanges and friendly relations. In the past, the ancient Silk Road was one of the important trade links between China and Africa. Through land and sea transportation, ancient China and the African continent carried out trade exchanges at various levels and in various fields. This ancient trade exchange promoted the exchange of culture, goods and technology between the two places, bringing economic prosperity and opportunities for cultural exchange. The economic and trade cooperation between China and Africa began to strengthen gradually in the 20th century, especially after the establishment of diplomatic relations, the trade between the two countries has become increasingly frequent. China has become an important trading partner of the African continent, mainly covering resources development, infrastructure construction, agricultural cooperation and other fields.

The Forum on China-Africa Cooperation (FOCAC), as an important platform for promoting China-Africa cooperation, has promoted the development of China-Africa trade cooperation. Under the FOCAC framework, China and Africa have strengthened cooperation in political, economic, cultural and other fields, and promoted the in-depth development of bilateral economic and trade relations. The Belt and Road Initiative proposed by China has injected new impetus into China-Africa cooperation. Through the joint construction of the Belt and Road Initiative, the economic and trade cooperation between China and Africa has been further enhanced, opening up broader opportunities for Chinese enterprises to enter the African market.

Against this historical background, trade cooperation between China and Africa has continued to deepen, which has had a positive impact on the economic development of both sides and the improvement of people's living standards. In 2022, two-way trade between China and Africa reached US $282 billion, an increase of 11.1% year-on-year. Among them, China imported US $117.5 billion from Africa and exported US $164.5 billion to Africa, up 11% and 11.2% respectively year-on-year. China has been Africa's largest trading partner for 14 consecutive years.

On this basis, the trade cooperation of China's used cars and auto parts exports to the African market will also usher in broader prospects for development. Take the Ethiopian market, as the second most populous country in Africa and the rising star of the automobile market, the continuous growth of the demand for automobiles has provided a huge opportunity for the export of China's automobile industry.

Ethiopia has a large population base and growing economic strength, of which the capital city of Addis Ababa car market demand is huge. The country itself is striving to develop into an African automotive manufacturing hub, and plans to become the largest automotive manufacturing country in Africa within the next two decades, which means that the demand for cars and parts will increase further.

2. Development prospect of automobile market

As Chinese automakers increase their investment in Ethiopia, the country's auto production has begun to increase. Because domestic production capacity is still limited, Ethiopia hopes to further increase car production by increasing foreign exchange to import more parts. This has increased the demand for imported parts, thus providing a market for Chinese auto parts exporters.

3. Potential of China-Africa economic and trade cooperation

Since the establishment of diplomatic ties more than 40 years ago, the level of economic and trade cooperation between China and Egypt has continued to improve. In recent years, Ethiopia has vigorously promoted its opening-up policy and encouraged foreign investors to invest in the country. Especially Djibouti, which is adjacent to Ethiopia, since the opening of the Djibouti International Free Trade Zone in 2018, relevant preferential policies have emerged in an endless stream, and logistics, warehousing, and re-export have become more convenient. Led by China Civil Engineering Group Co., LTD., the construction and operation of the railway connecting the Ethiopian capital of Addis Ababa and the port of Djibouti has greatly promoted the economic development of the Horn of Africa, including Djibouti, and made a major contribution to the regional integration of East Africa.

4. Export potential of China's used cars and auto parts

As one of the largest automobile markets in the world, China has abundant resources of used cars and auto parts. Chinese automobile manufacturers can take advantage of the opening-up policy and favorable environment of the Djibouti International Free Trade Zone to export high-quality used cars and spare parts to African countries to meet the needs of their automobile markets.

With the growing demand of the African automobile market, China's used cars and auto parts export to the country's market has great potential. The deepening economic and trade cooperation between China and Africa, as well as the unique investment environment of Djibouti International Free Trade Zone, provide good opportunities for Chinese enterprises to explore the market. It is believed that with the further strengthening of cooperation between the two sides, the trade of China's used cars and auto parts exports to Africa will usher in more prosperous development.

Keyword: