China’s Tax Breaks for African Exports: Opportunities and Challenges

On 04-06 September 2024, 53 of the 54 African leaders met with the Chinese leader, Xi Jinping at the Great Hall of the Peoples Republic of China in Beijing for the Forum on China–Africa Cooperation (FOCAC) summit. FOCAC is a high-level platform for securing investment, aid, and diplomatic cooperation, which offers African states opportunities they might not get elsewhere, especially with such few political conditions attached.

Questions have been raised whether; African leaders were going cap-in-hand to solicit for help for their countries, or whether they were inadvertently forced into a union that superficially looked advantageous but beneath the surface held a well- structured imbalance?

The Summit produced a joint declaration calling for a “high‑level China‑Africa Community with a Shared Future for the New Era”. It frames cooperation through global initiatives like the Belt and Road (BRI), the Global Development Initiative, Global Security Initiative , and Global Civilization Initiative . China’s vision of a “shared future” includes China at the centre, setting rules, standards, and direction, not a flat table of equals.

President Xi’s opening address referred to the  idea of a shared future multiple times. He also framed “modernisation” as a mutual goal, emphasising shared struggle and advancement under a shared community. Xi focused on China’s new zero tariffs on African exports policy, major infrastructure, health, agricultural, and educational cooperation—all under the shared future umbrella. There were also financial commitments announced during the summit, including approximately $50 billion in credit lines, assistance, and investment over the next three years, to realise some partnership objectives.

China is Africa’s largest trading partner and  total trade has exceeded $280 billion in recent years, as China has  pledged billions of dollars in loans, grants, and debt relief.. Many African countries rely on China to finance and build roads, railways, ports, and power plants. The summit provided an opportunity to negotiate bilateral infrastructure projects and push for more China-backed industrial parks and Special Economic Zones .

A Glance at FOCAC

FOCAC helps African countries strengthen diplomatic ties with China, a major global power. It allows African nations to diversify international partnerships, moving beyond reliance on Western donors. China emphasises non-interference in domestic affairs, which appeals to some African governments. China uses FOCAC to promote a South-South cooperation narrative, offering an alternative to Western-dominated institutions.

African leaders see it as a platform to influence global issues collectively, from climate change to UN reforms. Many FOCAC participants are also part of the BRI Alignment, China’s global infrastructure strategy. African countries seek access to Chinese markets for their raw materials, agricultural products, and manufactured goods. Some also aim to benefit from technology transfer, training, and digital infrastructure cooperation under China’s “Digital Silk Road”.

Is Chinese Altruism in Africa real?

International relations are rarely ever driven by altruistic intent. China steps in with roads, railways, loans, training, and relatively few political conditions, which  presents an attractive proposition to many African governments. China does not want to “own” Africa but it definitely wants to replace the West as Africa’s most powerful partner and it is doing this strategically, quietly, and some might argue, smartly.

Africa is resource rich in oil, gas, gold, cobalt, lithium, and other rare earth minerals needed to power China’s economic growth. Africa also offers 1.4 billion people and a fast-growing middle class. This is a huge market for Chinese goods because China produces more than it consumes. This is the exact market size to lap up Chinese exports of cheap electronics, clothes, building materials, and machinery. On the other hand, many of these deals offered to African countries come as loans, not grants. Debt piles up. Projects often favour Chinese companies and workers, not locals. Transparency is at best low if not non-existent, so the risk of corruption is high. Some countries have fallen into debt distress (e.g., Zambia, Ethiopia, Kenya).

So while China is not a coloniser in the old European sense, it is certainly pursuing its own national interest just wrapped in the language of “win-win cooperation.” and “shared future”. Unlike the West, which has a more fluid international policy position, China plays the long game; invests in Roads, Rail, ICT, Energy infrastructure and other instruments that build loyalty. It trains African bureaucrats and elites in Chinese universities, builds Confucius Institutes, offers scholarships, and sends language teachers to countries across the continent. They’re reprogramming the next generation of leaders to think “Beijing,” not “Brussels” or “Washington”. China’s strategy isn’t loud, it’s systemic. It’s not colonialism in the old sense, but it tilts power and dependency toward Beijing. No shared values – only shared interests.

China’s decision to offer zero-tariff access on over 8,000 product lines to 53 African countries through FOCAC is being hailed as a bold step toward reshaping trade relations between the world’s second-largest economy and the African continent.

But beneath the surface of this apparent generosity lies a more complex reality, one that presents both real opportunities and strategic challenges for African economies. The tax break policy is meant to boost Africa’s export earnings, ease market entry, and reduce barriers for value-added goods like textiles, coffee, cocoa, tea, and minerals. Countries like Ethiopia (textiles, leather), South Africa (agricultural and manufactured goods) and Rwanda (coffee, tea, handicrafts) have already begun to leverage this access, gaining market share in selected product lines and diversifying away from traditional Western markets.

The Pitfalls: Dependency or Development?

Despite the rosy outlook, several challenges and concerns shadow these tax breaks. There are structural trade imbalances which means that China still exports far more to Africa than it imports. Most African exports to China remain raw or semi-processed materials, while imports from China are finished goods, machinery, and electronics. This deepens Africa’s position in low-value segments of global value chains.

There are limited opportunities for real value addition to the economy. Without significant investment in processing, manufacturing, and certification, most African goods remain uncompetitive or fail to meet Chinese standards, especially sanitary and phytosanitary requirements. In the end, the zero-tariff window risks being underutilised.

Non-tariff barriers still exist as African exporters face challenges related to complex regulations, language barriers, logistic bottlenecks, and port access in China. Zero tariffs do not automatically translate into equal access or fair play. The risk of overconcentration is a valid concern, as countries that pivot too heavily toward China may neglect regional trade or become overly reliant on one export market. This can erode negotiating power, especially when political tensions or sudden policy shifts arise.

A closer look also shows that these tax incentives are not aid; they are tools of influence. While they can enhance African trade capacity, they also reinforce China’s soft power and economic presence across the continent. China’s tax incentives are not charity; they are a strategic investment. They create short-term trade gains alongside long-term dependency and become an economic risk if African countries do not invest in self-reliance, diversification, and regional value chains.

Zero-Tariff Incentives to Africa: Who Benefits, What’s at Stake?

China’s tax-free access to its vast market is reshaping Africa’s export patterns. But as benefits begin to emerge, so do strategic questions about long-term dependency, value addition, and alignment with continental trade goals like the African Continential Free Trade Area (AfCFTA). China’s tax incentives are not inherently predatory; they offer a real window of opportunity. But if African countries do not use that window to build competitive, diversified economies, they risk ending up locked in a one-sided relationship. The challenge is not to reject China’s incentives but to ensure they serve African development, not just Chinese influence.

China’s Trade Gifts vs. Africa’s Integration Goals: Can FOCAC and AfCFTA Coexist?

As African countries increasingly tap into China’s zero-tariff scheme for over 8,000 product lines under FOCAC, a critical question arises: Is this deepening Africa’s global trade opportunities or undermining its own push for regional economic integration under AfCFTA?

The AfCFTA, launched in 2021, aims to create the world’s largest free trade zone, covering 54 African countries and over 1.3 billion people. It seeks to reduce Africa’s dependence on external markets by boosting intra-African trade, building regional value chains, and harmonising industrial policies. Its core objectives include boosting intra-African trade, currently just 15% of total African trade (compared to 60% in the EU), reducing dependence on external partners by building regional value chains and industrialising Africa through collaboration and shared infrastructure.

However, China’s bilateral concessions encourage African countries to prioritise exports to Beijing over trade with their neighbours, often reinforcing export enclaves rather than integrated production networks. By contrast, China’s unilateral tariff concessions, while attractive, follow a bilateral and externally oriented approach that can divert attention, production, and infrastructure investment away from AfCFTA’s collective goals. What we see is that African firms may prefer to structure production and exports to suit Chinese demand rather than integrate regionally. This could reinforce enclave economies where countries just export raw materials or semi-processed goods to China and import finished goods back, bypassing African neighbours.

Ethiopia, under its industrial park strategy, has benefited from Chinese tax exemptions, especially in garments and leather goods. However, most of these exports are shipped to China or Europe. West African textile hubs like Nigeria or Ghana, which might benefit from closer trade links under AfCFTA, are bypassed. This dynamic suggests that China helps individual countries integrate into global supply chains, but it may distract from regional integration, especially if infrastructure, policies, and standards are aligned with Beijing not Addis Ababa, Lagos, or Accra.

What Experts Say

Proponents of FOCAC argue that access to the Chinese market can complement AfCFTA by giving African producers scale and revenues to later expand regionally just as critics warn it may lead to African countries “racing to the bottom” to attract Chinese markets, focusing on primary goods exports and ignoring the hard work of building continental value chains.

China’s tax incentives for 53 African countries, including powerhouses like South Africa and Ethiopia, have been celebrated as a sign of deepening South-South cooperation. Exports of avocados, coffee, textiles, and minerals are rising, and trade figures show a sharp uptick in African goods flowing into China. However, a closer look reveals a persistent imbalance: much of what Africa sends remains unprocessed raw materials. For instance, Ethiopia’s booming textile exports often rely on Chinese-owned factories, while Zambia’s copper exports to China remain largely unrefined.

Analysts warn this could replicate the colonial-era pattern: Africa exports raw resources, imports finished goods and struggles to build internal industrial strength. Indeed, China is Africa’s largest trading partner, but the trade is often lopsided. In 2024 alone, Africa exported $117 billion worth of goods to China, mostly oil, minerals, and agricultural products—while importing nearly $180 billion in machinery, electronics, and vehicles. Countries like Angola, Nigeria, and Sudan remain heavily reliant on Chinese demand for crude oil. Should that demand slow, their economies risk sudden collapse.

AfCFTA: A Lost Priority?

Critics say China’s tax waivers, while helpful in the short term, may distract from the AfCFTA the largest free trade zone in the world by number of countries. “The real game-changer for Africa isn’t China—it’s Africa itself,” argues Kwame Tetteh, a Ghanaian trade official. “If we keep looking East instead of across the border, we’ll never develop internal resilience.”

Only 18% of Africa’s exports stay within the continent, compared to 60% in Asia. Yet, many African nations remain focused on bilateral deals with external powers like China, the EU, or the US, often at the expense of building regional trade. According to data from the World Trade Organization and United Nations Conference of Trade and Development, Africa’s exports to China reached over $117 billion in 2024—up from $98 billion in 2022. Yet more than 70% of these exports remain raw commodities: oil, copper, cocoa, timber, and precious minerals. While the numbers have risen, the composition of trade remains worryingly unchanged.


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