Issues with Nigeria’s bilateral ties with China post-pandemic
Besides its worrying effects on human life, the novel strain of coronavirus (COVID-19) has significantly slowed down not only the Chinese economy but also the global economy, alongside threats of recession. China is the central manufacturing hub of many global business operations. UNCTAD’s data showed that any disruption of China’s output is expected to have repercussions elsewhere through regional and global value chains. With issues of alleged human rights abuses targeted at Nigerians and other Africans in China, FEMI ADEKOYA writes on implications for trade locally and within the continent.
With China’s influence towering higher than that of the West, there are diverse opinions about the Asian tiger’s gifts and its Silk Road initiative. Opponents accuse China of using the opportunity to access raw materials like oil, iron, copper and zinc that it urgently needs to fuel its own economy.
Supporters, on the other hand, say that China’s initiatives to build and improve infrastructure such as roads, railways and telecom systems have been a boon to Africa’s manufacturing sector; have freed up domestic resources for other critical needs such as healthcare and education, and have aided everyone doing business on the continent.
Coronavirus and threats to the global supply chain, interactions
With the impact of the coronavirus pandemic hitting many countries, China’s imports and exports equally took a big hit but fell by smaller margins in Marc,h than in the first two months of the year as businesses there began to recover from the coronavirus pandemic, but officials and analysts warned of a grim outlook for the world’s largest exporter as global economic activity collapses.
While the outbreak of the coronavirus, which has killed thousands and has infected millions, rages, a plunge in Chinese factory output in February and March is expected, as quarantine efforts to contain the disease disrupted supply chains – with damaging consequences for companies around the world.
Indeed, outbound shipments from China dropped 6.6% in March from a year earlier, following a 17.2% decline in the January-February period, as countries enforce the lockdown action.
Already, the rising cost of the outbreak for businesses and the global economy is coming closer to home, as the organised private sector explores measures to reduce the impact the global crisis may likely have on the struggling local economy.
Although cargoes are still received from European countries, there are fears about the sustainability of business operations that already have their supply chains disrupted.
For manufacturers and other allied businesses, the disruption in the supply chain is already taking a toll on raw materials needed for production.
Having built inventory over time, Nigerian manufacturers are beginning to get worried about access to critical raw materials needed to sustain their operations.
According to the Director-General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, the performance of key sectors that have the capacity to facilitate economic diversification is still largely constrained.
“The global supply chain has been deeply disrupted as China, which is the second largest economy in the world, is a major supplier of inputs for manufacturing companies around the world, Nigeria inclusive.
“Many manufacturers and service providers in the country are already experiencing an acute shortage of raw materials and intermediate inputs. This has implications for capacity utilization, employment generation [and retention] and adequacy of products’ supply to the domestic market”, he added.
Similarly, over $100 million worth of hardware goods belonging to some of Nigeria’s phone and computer vendors are currently stuck in China, The Guardian has learnt.
According to checks by The Guardian, some Nigerian vendors, who travelled to China for the Chinese festival shopping season in late January, are unable to do business or return to the country due to the outbreak of COVID-19.
Confirming this development, the President of Phones and Allied Dealers Products Association (PAPDAN), Ifeanyi Akubue, said huge stocks, especially phones and computers are stuck in China.
Akubue, speaking with The Guardian, said the Coronavirus impact is huge on the Nigerian market, as major Original Equipment Manufacturers (OEMs) supplying this market are based in China, and have not supplied since the outbreak of the virus.
“I can confirm to you that over $100 million worth of goods is currently stuck in China. Most of the OEMs have stopped production. Our stocks are currently depleting. It is a sad situation. The world is confused. We can only pray and take caution,” he stated.
A reduction in Chinese supply of intermediate inputs can affect the productive capacity and therefore the export of any given country depending on how reliant its industries are on Chinese suppliers.
For many companies, the limited use of inventories brought by a lean and just-in-time manufacturing process would result in shortages that will impact their production capabilities and overall exports.
Worries as China lifts lockdown but picks soft targets to check new infections
Having brought under control the original outbreak centred on the city of Wuhan, Beijing is now concerned about imported cases and is stepping up scrutiny of foreigners coming into the country and tightening border controls. It has denied any discrimination.
Already, Africans in Guangzhou have reported being evicted from their apartments by their landlords, being tested for coronavirus several times without being given results, and being shunned and discriminated against in public. Such complaints have been made in local media and on social media.
Several African countries have separately also demanded that China address their concerns that Africans, in particular in the southern city of Guangzhou, are being mistreated and harassed.
A former African Union Ambassador to the United States and President, Africa Diaspora Development Institute (ADDI), Dr. Arikana Chihombori-Quao, and others have kicked against the maltreatment of Africans in China. ADDI is the umbrella organisation of over 210 million people living in the Diaspora.
In an open letter to Chinese President Xi Jinping, Chihombori-Quao described the kicking out of Nigerians and other African nationals from their homes and hotel rooms and subjection to insults and extreme inhumane treatment as a serious violation of rights, which black people would not tolerate.
According to her, Africans are being accused of bringing the novel coronavirus to the Asian nation, “while the whole world knows very well that COVID-19 began in Wuhan, China, and not Africa.”
In Nigeria, the Federal Government recently blamed poor communication between Chinese authorities and African consulates in Guangzhou, China, for the alleged maltreatment of Africans in the area.
This is even as the government urged Nigerians to be objective in assessing situations such as the Guangzhou incident.
Minister of Foreign Affairs, Geoffrey Onyeama, stated this at a press briefing in Abuja, in company with the Chinese Ambassador to Nigeria, Dr. Zhou Pingjian.
Onyeama said Nigerian officials in China informed him that poor communication was responsible for efforts made by Chinese authorities to contain an incident of a lady who tested positive for coronavirus in the area. He said Nigerian and Chinese authorities were working closely to resolve the issue.
Onyeama noted that the Nigerian government took very seriously the issue of human rights and the wellbeing of Nigerians anywhere in the world.
Zhou said the Embassy of the People’s Republic of China took note of the seriousness in which the minister and the Nigerian government placed on issues raised by Nigerians in China.
He added that China respected and admired the working cooperation between China and Nigeria, and that China would never forget the invaluable support it received from Nigeria during the most challenging stage in the fight against COVID-19 in China.
Nigeria, Africa still needs China and vice versa
With the world powers exploring new investment locations, Africa remains the best option, while the continent equally depends on China for most of its supplies, either as raw materials or machinery.
Notwithstanding the present friction caused by the coronavirus, the quantum of investment in the Nigerian economy by Chinese companies hovers around $20 billion, the President, China Chambers of Commerce in Nigeria, Ye Shuijin, disclosed last year.
He explained that the 160 Chinese firms operating in Nigeria had also employed over 200,000 Nigerians, noting that the companies were promoting what he called the ‘people to people’ cultural diplomacy of the Belt and Road Initiative of the People’s Republic of China in Nigeria.
Executive Secretary, UNECA, Vera Songwe reinforced the need for stronger cooperation between China and Africa that can lead to sustainable, environmentally-friendly and resilient development in Africa that is inclusive, reaching first those people that are furthest behind.
“Financial and technological support for infrastructure development is critical. So is building capacity on trade as African countries start to realize the potential of the landmark Continental Free Trade Area”, she said.
Though China continues to seek ways out of several pressures at home and abroad, owing to trade tensions with the United States, Nigeria and other African countries will need to do more to improve regulations, promote the private sector, and diversify African brand exports to China, if they will be integrated into the global value chain.
In all, the Asian tiger and Nigeria need each other more than ever, especially now that the supply chain has been disrupted. For concerned Chinese residents and business owners in Nigeria, unnecessary friction will only increase trade tensions that might eventually impact the economic relationship that thrives before now.