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The 1^st China-Africa Economic and Trade Expo is set to be held in the last week of June 2019 under the auspices of the Forum on China Africa Cooperation (FOCAC).

The purpose of the Expo is to further enhance cooperation between China and African countries, specifically addressing President Xi Jinping’s two areas of China-Africa cooperation, namely, industrial promotion and trade facilitation.

At the FOCAC meeting in 2018, China committed to supporting African exports to China, especially of non-mineral products by establishing a USD $5 billion special fund for financing Chinese imports from Africa.

This is quite significant given that of the USD $70 billion worth of goods that China imported from Africa in 2017, 95% were minerals, fuels, and other commodities.

China-Africa bilateral trade has been steadily increasing over the past 16 years. However, weak commodity prices since 2014 have negatively impacted the value of African exports to China. Those prices stood at USD $148 billion in 2017, down from USD $215 billion in 2014, even while Chinese exports to Africa remained steady. Therefore, there is an urgent need for Africa to increase its value addition in its export commodity profiles.

This initiative by China recognises the need for Africa to diversify its export structure, reverse the trade imbalance and develop more resilient economies.

China has provided increasing financial support pledges to Africa over the years through the FOCAC meetings: USD $5 billion (2006), USD $10 billion (2009), USD $20 billion (2012), USD $60 billion (2015), and USD $60 billion (2018).

This support is mostly focused on major infrastructure projects on the African continent. Of note is the changing composition of financial support.  Much as 25 percent of the $60 billion has been pledged for grants and concessional loans, observers are keen to have the “aid” component rise above 2015 levels of USD $5 billion over three years, as this would make China as the third largest official donor to Africa, after the United States (nearly USD $12 billion in 2016) and the European Union (nearly USD $11 billion), ahead of the other large donors to the continent, such France, Germany, Japan and the United Kingdom.

Also, of particular interest is China’s pledge in 2018 to encourage Chinese companies to make at least USD $10 billion of investments in Africa over the next three years. This illustrates a conscious effort by the Chinese government to have even private companies investing in Africa.

David Owira is the Executive Director, Africa Development Think Tank. He is also a former Economic Analyst at Institute of Economic Affairs Kenya, now an Independent consultant analyst of economic/political affairs in Africa