What to expect from June’s China-Africa Economic and Trade Exhibition

Diplomatic efforts towards China by the Albanese Government since taking office in May 2022 appear to be paying off in the trade context. Shipments of Australian coal landed in Chinese ports in February after a two-and-a-half-year standstill, and there is talk that lobster exports will soon be resumed. Australia’s Foreign Minister Penny Wong has been clear, however, that there’s no China “reset”, arguing that this is impossible.

That is because ties are not projected to return to where they were before bilateral tensions induced a deep freeze, and instead to a new bilateral equilibrium. In fact, China’s own advancing global trade agenda speaks to that too. This will be on display at the upcoming third biennial China-Africa Economic and Trade Exhibition, hosted by Changsha, Hunan province, in June.

While having no direct place at that table, Australian exporters best also understand what CAETE is about and its broader directions, for example including the potential for expanded — substitutes — African lobster exports to China. This post introduces CAETE, its origins and what is known and can be projected of the agenda for its third iteration. The event will likely be not only the first major multilateral event hosted by China since the end of its fortified COVID19 lockdown, but also of Xi Jinping’s appointment to a third term as General Secretary of the Communist Party of China.  Further, since this CAETE is only the second in-person gathering of CAETE, the first of the third-term of Chinese President Xi Jinping, and amid ever-deeper ongoing tensions with Western countries, it is likely that this year’s CAETE will be a big one. Understanding the occasion in advance can help to maximise utilisation of it by invited African and Chinese, and third-party trade opportunity strategists alike.

Origins and Progress of CAETE

CAETE builds on more established China-Africa gatherings, including the Forum on China and Africa Cooperation (FOCAC). Where FOCAC summits are triennial, alternate in host region (in China and then in Africa) and began in 2001, CAETE was only recently proposed, by Xi at the 2018 Beijing FOCAC Summit. Whereas FOCAC offers a government-to-government and policy architecture, CAETE is the parallel business-focused entity. CAETE’s origins lie in Xi’s 2018 plenary speech to FOCAC, where he proposed an exhibition that would serve as a venue for promoting deeper economic and trade cooperation between China and Africa. CAETE was first held a year later and instigated as a biennial chance to showcase tradeable goods and services in what is otherwise a smaller and permanent exhibition hall.

The bigger biennial gathering offers a – hybrid online and offline – forum that includes panel discussions, corporate displays, and business match-making activities. The event and exhibition forum is hosted permanently by Changsha, Hunan province, with support from the Trade Development Bureau of China’s Ministry of Commerce (MOFCOM) and three provincial entities in Hunan: the Office of Foreign Affairs Commission, the Hunan Sub-council of the China Council for the Promotion of International Trade, and the Government of Changsha City. Reasons for the permanent settlement of the expo in Changsha are understood by the author to include that Hunan is a historic home to industries that today are relevant to Africa’s economic needs, including global strengths in agriculture and construction-related sectors. Examples include Longping High-tech Seed Industry, new energy vehicle resources represented by BYD, and construction machinery giants such as Sany Heavy Industry. This makes Changsha well-positioned to spearhead cooperation between China and Africa in agriculture, new energy industry as well as vehicle and construction machinery industries.

In terms of overall deal outcomes, CAETE 2019 led to 84 cooperation deal signings to the value of $20.8bn, covering trade, investment, infrastructure, agriculture, manufacturing, aviation, and tourism. The second — online — forum led to deals to the value of $15.93bn.

CAETE 2023 – What’s in Store?

The third CAETE – only the second held off-line – will be held in June (15-18) under the theme “Common Development for a Shared Future”. This year’s “countries of honour" will be The Democratic Republic of the Congo (DRC), Madagascar, Morocco, Mozambique, Nigeria, and Zambia. The two chosen Chinese “theme provinces” are Hubei and Shandong, two provinces with relatively deep heavy industry and technical expertise, such as in chemical engineering and production, shipping, petroleum, and white goods manufacturing.

That combination of promotions could lead to many places. One example relates to the recently completed China-invested and Singaporean-run Lekki port in Nigeria. Since the port is Nigeria’s first deep-water port, in the first instance there is a-historic opportunity for trade promotion, especially of high-volume trade. Moreover, Nigeria is home to emerging and intended greater strengths in chemical manufacturing like fertiliser — the demand for new production locations has spiked given conflict in Europe — alongside petroleum refining. Indeed, it seems that Nigeria, Shandong, and Hubei may have lots to talk about at this year’s CAETE. Perhaps Xi will invite a high-level representative of the incoming government of President Tinubu of Nigeria to visit China to coincide with CAETE. Similar industrial alignments arise with respect to Morocco’s potential interests, it being a country of honour at CAETE 2023. Except in Morocco, unlike Nigeria, there is an emerging renewables and auto manufacturing sector. Since Hunan is home to BYD, a leading Chinese electric car manufacturer, and many other firms along the renewables supply chain, it might be expected that Morocco’s opportunities as a guest of honour may lead to newly opened doors in chemicals, renewables, and beyond. Equivalently, DRC, Mozambique and Zambian representatives are home to endowments of related raw materials.

Otherwise, though not a guest of honour, Kenya is sure to send company representatives to pursue their interests in China in June. Kenya, moreover, is home to a Hunan-Africa seafood value-added experimental project run by the province’s Jinzai Food Group. For Australia, this is relevant – Kenya too is home to lobsters that have already begun to be exported to China – via a special agricultural goods processing channel in Hunan. Recently inaugurated direct flights between Hunan and Kenya, as well as a new Hunan-Guangdong-Africa rail-sea trade route, facilitate the trade and its intended expansion.

The third and little-known biennial CAETE is just three months away. It is one of the first major multilateral events of Xi’s third term and post-COVID19 China. A humble trade exhibition in China’s landlocked historic food bowl that also gave birth to Mao Zedong and China’s green revolution, is worth watching as one of the international events on China’s agenda this year. For Africa it will help shape the China-related economic trajectory. For Australian exporters it is also important, if indirectly. Not least since it was a little-known Vice-President Xi Jinping who, in visiting South Africa in 2010, promised that China would optimise the level and structure of China-Africa trade. Given trade aspirations in Kenya, and China having recently approved Kenyan lobsters for export, any sense of relief that Australia’s lobster exporters to China may soon have permission to re-start may be premature.

Dr. Lauren Johnston is a Visiting Senior Lecturer, Institute for International Trade, Adelaide University and Associate Professor, China Studies Centre, University of Sydney; and a consultant senior researcher on China/Africa for the South African Institute of International Affairs.

The views expressed here are the author(s) alone, and do not represent the views of the Institute for International Trade.

Image: Shutterstock patrice6000