Globalization is the process through which goods and services,
capital, people, information and ideas flow across borders and lead to greater
integration of economies and societies. In its quest to be part of
globalization, China and Nigeria established diplomatic relations on February
10th, 1971. The internal crises faced by both countries reduced the pace of
economic integration. Thereafter, China was transforming into an economic
power, while Nigeria, in the 1980s and 1990s were marked by a series of military
coups, which has impaired trade and economic development.
In 1994, The Nigerian-Chinese Chamber of Commerce was founded. It was not until the return of democratic rule in Nigeria that economic relations began to develop in earnest. The former President of Nigeria, Mr. Olusegun Obasanjo’s election in 1999 coincided with the start of a new Chinese orientation toward Africa in 2000. During Obasanjo’s second term in office (2003-2007), both China’s President Hu Jintao and Prime Minister Wen Jiabao visited Nigeria, and Obasanjo made two official visits to Beijing. Various other ministerial-level visits conducted during this time allowed the two countries to develop and intensify mutual friendship and familiarity. In 2001, the two countries signed agreements on the establishment of a Nigeria Trade Office in China and a China Investment Development and Trade Promotion Centre in Nigeria. The intergovernmental Nigeria-China Investment Forum was then founded in 2006.
Bilateral trade has grown exponentially since China and Nigeria signed an agreement on trade and investment promotion and protection in 2001. The value of trade reached USD 17.7 billion in 2010, almost 10 times its level just ten years before, while Nigerian exports to China more than doubled, they have not kept pace with the growth of Chinese exports to Nigeria. Thus, a heavy trade imbalance has not only persisted but also intensified. Chinese exports represented 66.7% of the bilateral trade total in 2000 and 87.3% of the total in 2010. By 2010, Nigeria had become China’s fourth biggest Africa trading partner, and the second largest Chinese export destination on the continent. Trade between the two countries accounted for nearly one third of the trade between China and the whole of West Africa, indicating the importance of Nigeria to China’s entry into the regional market. Despite recent expansion, China still only accounts for a small fraction of Nigeria’s global trade, lagging far behind the country’s top partner (the United States) and notably facing competition from Brazil and India, as well as more traditional partners such as France. Around 87%of Nigeria’s exports to China are oil and gas products. China, by contrast, exports a diversified range of goods to Nigeria, most notably machinery, equipment and manufactured commodities. While the official numbers are impressive, they fail to capture the complete picture of trade between china and Nigeria.
The trade between Nigeria and China has largely followed a
classical pattern of trade disequilibrium between the developing and the
developed economies. The structure of trade between Nigeria and China reflects
the difference in the level of development of the two partners as well as high
degree of complementary that exist between their economies. While Nigeria’s
exports to China consist mainly of primary commodities, its imports from that
country are made largely of industrial goods. Within this commodity groups,
there have been some important changes in the structure of trade over the
years. From analysis, despite the increase in trade volume between the two
countries, the bilateral trade relations have been in favor of China, thus
creating a feeling of the lopsided distribution of the benefit from the
bilateral trade.
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