In December 2024, China became the first major economy to trade without boundaries – by offering zero tariffs to all the least developed countries (LDCs) with which it has diplomatic relations for 100 percent of tariff lines. In September 2024, China’s Customs Tariff Commission stated China’s implementation of a zero-tariff policy on 100 percent of products originating from the LDCs with which it has diplomatic ties. It was in 2010 that China formally implemented its zero-tariff policy on imports from LDCs. 97% of products were covered under the policy. Since October 2000, the Forum on China–Africa Cooperation (FOCAC) recognised the significance of giving African commodities preferential access to the Chinese market. The beneficiaries under China’s nearly zero tariffs to LDCs have grown steadily, with two key criteria – belonging to LDCs and having diplomatic ties with China which in turn entails abiding by China’s one China policy. Alongside the increase in beneficiary countries over the years, the beneficiary goods also have expanded. Such policy is in conformity with WTO as per the Enabling Clause which permits developing countries to be exempt from the most-favoured-nation (MFN) principle.
China’s strategic approach to fostering economic growth and development in LDCs is reflected in overlapping cooperation agreements, especially through increased infrastructure, capacity-building initiatives, and agricultural trade. Through FOCAC (2000), One Belt One Road Initiative (OBOR) (2013), the Global Development Initiative (2021), while China is committing to providing the LDCs with comprehensive and long-lasting support, cultivating enduring ties for mutual development, it is simultaneously securing its agricultural and industrial supply chains with strong backward linkages with African countries in particular. China’s ongoing zero-tariff policies, especially for agricultural products, encourage these initiatives and guarantee easier trade and economic integration.
As per the UN list as of December 2024, 44 countries categorised as LDCs include Africa (32): Angola, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Togo, Uganda, United Republic of Tanzania and Zambia; Asia (8): Afghanistan, Bangladesh, Cambodia, Lao People’s Democratic Republic, Myanmar, Nepal, Timor-Leste and Yemen; Caribbean (1): Haiti and Pacific (3): Kiribati, Solomon Islands and Tuvalu.
According to UNCOMTRADE data, from 2019-2023, China’s total imports from LDCs have grown from US$ 52 billion to US$ 70.3 billion and agricultural imports increased from US$ 3.1 billion in 2019 to US$ 4.8 billion in 2023. In so far as imports of Processed food and agro-based products from LDCs are concerned, China imported commodities worth US 916.5 million in 2019 increasing to US$ 1.3 billion in 2023 from LDCs.
Interestingly, African countries such as Mauritania are a mirror reflection of growing African exports to China and Chinese investments through One Belt One Road (OBOR) when Mauritania joined OBOR in 2018. China’s imports of Processed food and agro-based products from Mauritania edged up from US$ 119.3 million in 2019 to US$ 160 million in 2023, growth of 34.4 percent. The similar figure from the list of Asian sources for China’s imports of processed food was the highest from Myanmar with growth of more than 90 percent in the five-year time period of 2019-2023, with import values growing from US$ 247 million to US$ 470.5 million. Similar trends are seen in case of Cambodia and Laos Democratic Republic. Chinese investments in sectors, especially agriculture and industry go hand in hand. Notable are the expedited bilateral meetings of President Xi Jinping with 25 African heads of states (including Libya, Mali, Comoros, Togo, Djibouti, the Seychelles, Chad, Malawi and Mauritania) in September last year after which President Xi promised to expand cooperation with Africa and invest US$51.4 billion by 2027. With greater economic integration, diplomacy rides along as countries like Nigeria and Cameroon adopt the comprehensive strategic partnerships. The signing of the “Beijing Declaration on Joining Hands to Advance Modernization and Build a High-Level China-Africa Community with a Shared Future for the New Era” and the “Beijing Action Plan (2025-2027)” of the Forum on China-Africa Cooperation (FOCAC) reflects a commitment by African countries and China to further strengthen and deepen their partnership.
Besides agriculture, securing critical minerals supply chains has been China’s key focus. China has invested heavily in cobalt mining, especially in the Democratic Republic of Congo (DRC), which is home to around 70% of the world’s cobalt reserves. Chinese companies such as Zhejiang Huayou Cobalt and China Molybdenum have significant stakes in cobalt mines in the DRC. As China controls more rare earth mines in African countries, zero tariffs with these partners will further reduce costs for say lithium and cobalt exporters and aid in Chinese exports to the globe as well as smoothen the transition to renewable energies. Interestingly, China’s Zijin plans lithium production in Congo from 2026.
Furthermore, zero tariffs from 32 African countries will intensify China’s golden partnership with Africa. China’s gold purchases include commonly cited reasons such as diversification of foreign reserves, gold as a safe haven, reducing vulnerabilities to sanctions, supporting domestic demand and investment, PRC’s strategy like any other country’s central bank, etc. With growing Chinese gold mining operations in pan-Africa, zero tariffs will cost effectively secure China’s supply chain of gold reserves. By combining zero tariffs with strategic investments in gold and other minerals in countries such as Tanzania, Sudan, Burkina Faso and Mali, China is strengthening its position as a global economic power while contributing to the development of its African trade partners.
President Trump’s not mentioning Africa in his inauguration speech, along with Africa being low on the US priority list for years, continues to leave a lot of room for China’s deepening economic engagement with Africa. China’s offer of zero tariffs to LDCs comes at a time when the US buzzes the media with “Trump Tariffs.”. Besides having cost-effective, secure supply chains in crucial areas such as food security, critical minerals, and gold, China’s step of zero tariffs for LDCs having diplomatic relations with China for 100 percent tariff lines has intangible spillover effects as well. Greater support in international fora, the narrative of a global leader of the South, the projection of open trade over protectionism, an edge over the Western world in terms of growing presence in small or developing countries without any competition in its own domestic market, and efforts towards achieving a comprehensive strategic partnership with the other part of the world have far-reaching implications that the world, including the US, needs to factor in while devising their own economic and diplomatic strategy.