The Challenges and Prospect of Nigeria-China Trade Relation
CHAPTER ONE
Objectives of the study
The primary objective of this study is to examine the challenges and prospect of Nigeria-China trade relations. Hence, the study seeks to:
- To ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria.
- To determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria.
- To examine the challenges facing the Nigeria-China trade relations.
CHAPTER TWO
REVIEW OF LITERATURE
INTRODUCTION
Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
International Trade
Trade involves the exchange of goods between two or more people. International trade therefore denotes exchange of goods and services across national boundaries. International trade has become a necessity, principally due to the principle of comparative advantage. Therefore each will need to use what it has to get what it wants, hence the need for trading with other states. According to Manroe (1975) international trade is subject to political considerations which results to restrictions example tariffs which is a schedule of duties or taxes imposed by governments on imports of particular goods into a country. Another type of restriction on trade is embargoes which is complete prohibition of entry of particular foreign goods. There is also quota, which are limits on quantity of imports. Monroe argued that those restriction in international trade made it imperative for regulatory bodies, hence the creation of the international monetary system after World War II in Bretton Woods and World Trade Organization. But even with regulatory mechanism in place, states still strive to utilize every opportunity to take comparative advantage over other trade partners. This in fact is achieved through well thought out trade policies. Also, writing on the necessity of international trade, Robert and Lutz (1978) noted that for state to survive in the present international system, they must engage in one form of trade or the other to promote the development of their economies for the well being of their citizen. This position was also emphasized by Antell (1989) when 19 he stated that international trade involves exporting, importing, licensing, joint ventures, direct investment, overseas and barter and counters trade which is carried out between or among states, individuals and corporate entities within specific terms. Since the concept – international trade is not central to the topic under study; there is no need to further review literatures on the concept, having clarified its basis and objectives.
Nigeria’s Relation with China
The foundation of Nigeria-China relations dates back to the early 1960‘s when Chinese delegation visited Nigeria in 1964 seeking to establish diplomatic ties with the country. Ever since then, Scholars of foreign policy have produced research works on the bilateral relationship that exist between Nigeria and China. Review of related materials on Nigeria-China relations shows that there have been a cordial relations between the two countries except between 1967 and 1970 when China supported the Biafran forces by supplying them light arms against the Federal Military Government of Nigeria (Bukarambe, 2015) Bukarambe (2015) Nigeria-China Relations the Unacknowledged Sino Dynamics, extensively focused on the key areas of Nigeria-China relations, such as multilateral organization etc, as factors driving the relationship between China and Nigeria beginning from 1999.
CHAPTER THREE
THE BILATERAL TRADE AGREEMENT BETWEEN NIGERIA AND CHINA
Bilateral Relations
The governments of newly independent Nigeria adopted a broadly pro-Western stance, and while it did not actively support Taiwan, it also did not seek relations with China. Chinese Premier Zhou En-Lai‘s 10-country trip to Africa in 1963 did not include Nigeria, and a Chinese delegation that visited Nigeria in 1964 seeking the establishment of diplomatic ties was sent away empty-handed. Unlike other African countries that did draw close to China, Nigeria never received gifts of imposingly built sports stadiums or government ministry buildings from the Chinese government during this era. (Emeka, 2009) Moreover, after two years of studied silence on the matter, in September 1968 the Chinese government publicly backed the bid by Nigeria‘s Ibo-dominated Biafra region to secede from the federation. A statement by Chinese Foreign Minister Chen Yi at the time linked this support to the Soviet Union‘s backing of the Nigerian government on the issue, though another factor appears to have been the support given to Biafra‘s cause by China‘s key ally in Africa at the time, Tanzania. China covertly supplied the Biafran administration with small quantities of light arms, souring China‘s relations with the Nigerian government, but making no discernible difference to the outcome of the war, which ended with Biafra‘s collapse in January 1970. (Gregory, 2009) Formal diplomatic ties were established only in 1971, when Nigeria was in the fifth year of rule by its second military dictator, General Yakubu Gowon, and China, 22 years after first applying, finally obtained admission to the UN. Gowon visited China in September 1974, the first Nigerian head of state to do so, but to little consequence, since he was ousted from power ten months later by General Murtala Ramat Muhammed. General Muhammed was assassinated in 1976.
CHAPTER FOUR
THE BILATERAL TRADE VOLUME OF CHINESE TRADE IN NIGERIA
Bilateral Trade
Bilateral trade between Nigeria and China has come a long way. Back in 1969 its total value was recorded at just GBP 2.3 million, climbing to GBP 5 million in 1970 and GBP 10.3 million in 1971. Right from these early stages, the terms of trade were heavily in China‘s favour, with GBP 4 million of the trade recorded in 1970 derived from Chinese textile exports to Nigeria. By 1994 recorded bilateral trade had risen to $90 million. Although a significant increase on the trade levels of two decades earlier, this was still a very low figure. Yet bilateral trade more than doubled to $210 million in 1995, and had climbed to $830 million by 2000. Some of this increase 43 was due to rising Nigerian exports to China. Nigerian exports to China were worth $60 million in 1995, but $293 million in 2000, a nearly five-fold increase. Yet the terms of trade still favoured China, whose exports represented 73% of the bilateral trade total in 1995 and 68% of the total in 2000 however, bilateral trade in 2008 was worth $7.3 billion, nearly nine times its level in 2000. But still the trade imbalance has persisted and, indeed, worsened. Chinese exports represented 93% of the bilateral trade total in 2011. ( Adanma, 2012) Furthermore, Because of the influx of Chinese product in Nigeria most the infant industries have collapse. Nigerian trade unions have been reported as blaming Chinese imports for the loss of 350 000 Nigerian manufacturing jobs, chiefly in the textiles sector, and Nigeria, Ethiopia and South Africa are identified in the literature as being the three countries in SSA where employment and domestic production have been most negatively impacted by Chinese imports.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Summary
This research explores the presently thriving China-Nigeria bilateral economic relations. Consequently, the study ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria, determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria and
examine the challenges facing the Nigeria-China trade relations. The study was carried out using the qualitative research method.
Conclusion
The following noteworthy conclusions are made.
The relationship between the two countries have huge current and potential benefits to both countries and Africa as a continent as it further creates more favourable environment for business ties between China, Nigeria and West Africa at large. However, it is important that China‘s seemingly elitist approach in its relationship with Nigeria be redefined to encompass all i.e. both the leaders and the citizenry to ensure lasting and hitch-free relationship. According to Humphrey Pole-Pole, this will be better implemented as win win-winstrategy in which case it apportions a win for China, a win for African governments and a win for African people to sustain the economic pacts. While the possibilities certainly exist for Nigeria to derive higher value from China‘s growing influence, Nigerians have not fully capitalized on the potential benefits. Far more needs to be done to expand policy creation, institution building, human capital, entrepreneurship, and the culture and leadership capabilities to maximize gains. Most importantly, Nigeria needs to develop a comprehensive strategy to more effectively balance the engagement of China and the West to leverage its own strength and create a plan for sustainable development that resonates with its citizens.
Recommendations
Nigeria must continue to build, maintain and embrace a mutually trusting and respectful alliance with China. The partnership will continue to pave the way for structural engagements to the greatest extent between the two countries. Both Nigerian and Chinese foreign policy should represent the full capacity of both nations‘ values and insights. A foreign policy focused on a particular issue, such as trade or human rights, might run the risk of never establishing the kind of relationship in which complex questions can be posed and experiences voiced.
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