China-Africa Trade Hub: Supply Chain Advantages Bolster Enterprise Engagement with Africa
By Wang Chao
September 3, 2024
Changsha, China – In the bustling environment of the Gaogao Market in Changsha, Hunan Province, the nuts business has been a staple for many traders for decades. Among them, Li Haili, who has been in the nut business for over 20 years, sees a promising future in the African nut market.
The quality of African nuts is exceptional. Take South African pecans, for example; they have thin shells and plump flesh, which are very popular among consumers, Li Haili explains. However, she adds that importing African nuts through middlemen in the past had its drawbacks, including transportation inefficiencies, higher costs, and inconsistent quality, limiting the market share of African nuts.
The Birth of the Africa Nut Trading Center
The establishment of the Africa Nut Trading Center within the Gaogao Market has transformed the dynamics of the nut trade. By establishing direct procurement partnerships with nut-growing regions in countries like Ghana, Kenya, and Côte d’Ivoire, the market has created a comprehensive supply chain, including planting, purchasing, processing, and trade, significantly reducing the ordering cycle for African nuts.
Previously, it took 1 to 2 months to receive the nuts after placing an order. Now, it only takes about half a month, and the price has decreased by an average of 15%. The quality is also more reliable, says Li Haili, who has seen her sales of African nuts grow to account for over 30% of her total nut sales, thanks to the market’s babysitting services.
Leveraging Trade Advantages
The Gaogao Market, located in the Yuhua Block of the China (Hunan) Pilot Free Trade Zone, leverages its position as a key area for deepening economic and trade cooperation between China and Africa. The market has aligned with the China-Africa Economic and Trade Expo, establishing the China-Africa Economic and Trade Cooperation Promotion Innovation Demonstration Park, which has become a significant trade port for Sino-African trade.
The demonstration park has built a complete industrial promotion, economic and trade service, and administrative service system, as well as a headquarters center for Sino-African economic and trade activities. It includes the Africa Non-Resource Product Trading Center, the China-Africa Economic and Trade Enterprise Incubation Center, the China-Africa Economic and Trade Comprehensive Service Center, and the China-Africa Financial Service Platform. To date, the park’s Phase I and II, covering a total area of 240,000 square meters, have opened, attracting over 1,000 Sino-African economic and trade entities. In 2023, the park’s enterprises achieved a trade volume of 5 billion yuan, a year-on-year increase of 59%.
Empowering Enterprises
Hunan Jieou Coffee Co., Ltd., with the help of Gaogao Market, has established direct connections with coffee-growing regions in Ethiopia, Kenya, and Rwanda, eliminating middlemen and ensuring competitive coffee bean procurement.
The market is like a ‘home’ to us, providing significant support in import and export training, operations, and financial security, says Li Ruikai, the company’s head. The company’s annual sales of African coffee products now exceed 3 million yuan, with procurement costs 20% lower than before.
According to statistics, the Gaogao Market’s coffee sales reached 1 billion yuan in 2022, with 2,000 tons of coffee beans sold, 40% of which were African beans.
Expanding Product Range
The market has focused on promoting the establishment of a full industry chain system for African non-resource products, including nuts, coffee, agricultural products, and traditional Chinese medicine. It has created three major trading centers for African coffee, nuts, and agricultural products, and has initially formed six industrial chains for coffee, cashews, macadamias, cocoa, chili peppers, and sesame.
Conclusion
The Gaogao Market’s strategic approach to leveraging supply chain advantages has not only bolstered trade between China and Africa but has also opened new doors for businesses like Li Haili’s, who are now able to tap into the vast potential of the African market more effectively. This model of trade cooperation is a testament to the growing economic ties and mutual benefits between China and African countries.
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