"We are proud to announce that Organic Trade and Investments (OTI) was one of the companies that exhibited at the 3rd China-Africa Economic and Trade Expo (CAETE) under the pavilion of the International Trade Center (ITC)," Esthy Ama Asante, CEO of Organic Trade and Investments (OTI) thanked the organizers and sponsors, following the Company's participation at the Expo, which was held in Changsha, China from June 29 to July 2, 2023, with the theme of “Common Development for a Shared Future”.
The Company had the opportunity to display a few of its flagship products, network with potential buyers and partners, and learn from other exhibitors and experts. In addition to that, OTI participated in various activities, such as matchmaking meetings, thematic seminars, and special promotion events.
We will take the opportunity to outline the impact of the BRI and the CAETE for African SMEs, as well as the challenges and benefits of participating in these initiatives, following the Company's experience in China. We will also discuss the future prospects of China-Africa partnership in terms of history, economy, politics and culture, and how African SMEs can take advantage of these governmental initiatives to be successful in their respective industries.
What Is the Belt and Road Initiative (BRI)
The Belt and Road Initiative (BRI) is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organizations. The BRI aims to enhance connectivity and cooperation across Asia, Europe, Africa and beyond. The CAETE is a biennial event jointly sponsored by MOFCOM and the Hunan provincial government. It is the only economic and trade cooperation platform under the mechanism of the Forum on China-Africa Cooperation (FOCAC), aimed to promote trade, investment, industrialization, agricultural modernization and people-to-people exchanges between China and Africa.
From June 23 to 28, 2023, Organic Trade and Investments (OTI) participated in the “Seminar of the Business Study Tour for Small and Medium Sized Enterprises of Belt and Road Development Countries to China (Phase 1)” in Beijing. This program was sponsored by the Ministry of Commerce (MOFCOM) and organized by the Academy for International Business Officials (AIBO).
The CEO of Organic Trade and Investments (OTI) believes that the BRI and the CAETE are important initiatives that offer opportunities for African SMEs to engage with the Chinese market and partners.
By participating in these initiatives, African SMEs can access new markets, diversify their products and services, enhance their competitiveness and innovation, and benefit from knowledge transfer and capacity building.
Impact of BRI and CAETE for African SMEs
Some of the significant impacts the BRI and the CAETE offer are:
Market access: China is Africa’s largest trading partner, with bilateral trade reaching $208.7 billion in 2019. The BRI and the CAETE provide platforms for African SMEs to showcase their products and services to Chinese buyers, investors and consumers. For example, OTI exhibited its natural and organic products, such as African black soap, shea butter and cocoa butter, at the CAETE. The Company's officials also met with potential distributors, e-commerce platforms and packaging companies. According to OTI’s founder Esther Ama Asante, commonly known as Esthy, the expo helped OTI gain exposure and recognition in the Chinese market.
Product diversification: The BRI and the CAETE encourage African SMEs to diversify their products and services to meet the demand of the Chinese market. In line with this opportunity, OTI developed new products, such as customized beauty products, based on customer feedback and market research. It also customized its packaging and labeling to suit Chinese preferences and standards. Management of OTI is of the view that product diversification is crucial for African SMEs to stand out from their competitors and increase their value-added.
Competitiveness and innovation: The BRI and the CAETE foster competitiveness and innovation among African SMEs by providing them with opportunities to learn from best practices, adopt new technologies, improve quality standards, reduce costs and increase efficiency. During the two-week program, OTI participated in a seminar on sanitary and phytosanitary (SPS) cooperation during the CAETE. The Company learned about the SPS requirements for exporting agricultural products to China. It also received guidance on how to obtain certifications, such as organic certification and good manufacturing practice (GMP) certification. Quoting OTI's CEO: "Competitiveness and innovation are essential for African SMEs to comply with regulations, enhance customer satisfaction and loyalty, and expand their market share."
Knowledge transfer and capacity building: The BRI and the CAETE facilitate knowledge transfer and capacity building among African SMEs by providing them with training programs, workshops, seminars, business matching sessions, site visits and networking events. OTI attended a training program on e-commerce development during the business study tour in Beijing. It learned about the trends, opportunities and challenges of e-commerce in China. Per OTI's CEO's experience, knowledge transfer and capacity building are important for African SMEs to acquire new skills, knowledge and contacts that can help them grow their business and overcome difficulties.
Amid the great opportunities available for African companies, OTI CEO recognizes the many setbacks African SMEs have to face in order to be successful in the biggest Asian market.
Despite these many positive impacts to maximize the benefits and minimize the risks of participating in these initiatives, African SMEs need to adopt a proactive, pragmatic, and strategic approach that leverages their strengths, addresses their weaknesses, exploits their opportunities, and avoids their threats. - Esthy Asante
Challenges and Benefits of BRI and CAETE for African SMEs
The BRI and the CAETE also pose some challenges and risks for African SMEs, such as trade barriers, debt sustainability, governance issues, environmental and social impacts, and cultural differences. Some of the challenges and benefits are:
Trade barriers: African SMEs face various trade barriers when exporting to China, such as tariffs, quotas, non-tariff measures, SPS measures, technical barriers to trade, intellectual property rights protection, and customs procedures. These barriers increase the cost and complexity of trade and reduce the competitiveness and profitability of African SMEs. However, these barriers can be overcome or reduced by participating in trade agreements, such as the African Continental Free Trade Area (AfCFTA) and the China-Africa Free Trade Agreement (CAFTA), which aim to create a larger and more integrated market for goods and services between Africa and China. These agreements can also provide preferential treatment, such as duty-free access, for certain products and sectors.
Debt sustainability: African SMEs may face debt sustainability issues when borrowing from Chinese lenders or participating in BRI projects. The projects in question may have high costs, low returns, or uncertain feasibility. The loans may have high interest rates, short repayment periods, or collateral requirements. Such factors may increase the debt burden and default risk of African SMEs. Nonetheless, the noticeable challenges can be mitigated or avoided by conducting proper due diligence, feasibility studies, risk assessments, and debt management. The granted loans may also have concessional terms, such as low interest rates, long repayment periods, or grace periods. These factors may improve the affordability and viability of BRI projects.
Governance issues: African SMEs may encounter governance issues when dealing with Chinese partners or participating in BRI projects. Some of these issues include corruption, fraud, bribery, money laundering, tax evasion, and procurement irregularities. These issues may undermine the transparency, accountability, and efficiency of BRI projects. They may also expose African SMEs to legal liabilities, reputational damages, or sanctions. The setbacks can be prevented or resolved by adopting good governance practices, such as anti-corruption policies, codes of conduct, compliance systems, and dispute settlement mechanisms in order to enhance the trust, cooperation, and performance of BRI projects.
Environmental and social impacts: African SMEs may face environmental and social impacts when operating in China or participating in BRI projects. The impacts include pollution, deforestation, biodiversity loss, climate change, human rights violations, labor abuses, and social conflicts. These impacts may harm the health, well-being, and livelihoods of local communities and stakeholders. They may also trigger protests, resistance, or backlash against BRI projects. To minimize or compensate such challenges, Companies must adopt environmental and social safeguards, such as environmental impact assessments, social impact assessments, environmental management plans, social management plans, stakeholder engagement, and grievance redress mechanisms. These safeguards, once put in place, create positive spillovers, such as job creation, poverty reduction, and community development.
Cultural differences: African SMEs may face cultural differences when interacting with Chinese partners or customers. Some of these differences include language barriers, communication styles, business etiquette, negotiation tactics, decision-making processes, and conflict resolution approaches. These differences may cause misunderstandings, miscommunication, or mistrust between the parties. They may also affect the quality, efficiency, and satisfaction of business transactions. Regardless of this, these differences can be bridged or appreciated by learning Chinese language and culture, respecting diversity and inclusiveness, building rapport and relationships, and seeking mutual understanding and benefit.
The BRI and the CAETE also reflect the growing partnership between China and Africa in terms of history, economy, politics and culture. The future prospects of this partnership are promising as long as both sides adhere to the principles of equality, mutual respect, non-interference, and win-win cooperation. Both sides also need to respect diversity, inclusiveness, and common development. By doing so, China and Africa can build a community with a shared future and common interests that can contribute to world peace, stability, and prosperity.
Future Prospects of China-Africa Partnership
The BRI and the CAETE reflect the growing partnership between China and Africa in terms of history, economy, politics and culture. According to OTI's CEO, African companies need to cooperate with other stakeholders, such as governments, international organizations, civil society groups, and local communities, to ensure that these initiatives are inclusive, sustainable, transparent, accountable, and mutually beneficial. The future prospects of this partnership are:
History: China and Africa have a long history of friendship and cooperation dating back to ancient times. The BRI and the CAETE are inspired by the historical Silk Road that connected China with Africa through trade and cultural exchanges. The BRI and the CAETE aim to revive and renew this historical legacy by enhancing connectivity and cooperation between China and Africa in the 21st century.
Economy: China and Africa have a strong economic complementarity and potential for cooperation in various fields. The BRI and the CAETE aim to leverage this complementarity and potential by promoting trade, investment, industrialization, agricultural modernization and digital transformation between China and Africa. The BRI and the CAETE also aim to support Africa’s development goals, such as the Agenda 2063 and the Sustainable Development Goals.
Politics: China and Africa have a solid political foundation and mutual trust based on the principles of equality, mutual respect, non-interference, and win-win cooperation. The BRI and the CAETE aim to consolidate this foundation and trust by enhancing political dialogue, strategic coordination, security cooperation, and multilateral collaboration between China and Africa. The BRI and the CAETE also aim to uphold the common interests and voice of developing countries in the international arena.
Culture: China and Africa have a rich and diverse cultural heritage and mutual appreciation based on the values of harmony, tolerance, learning, and innovation. The BRI and the CAETE aim to foster this heritage and appreciation by enhancing cultural exchanges, people-to-people contacts, educational cooperation, and media cooperation between China and Africa. The BRI and the CAETE also aim to promote mutual understanding and friendship between the peoples of China and Africa.
"We were honored to receive positive feedback and recognition from many visitors and stakeholders. We would like to express our gratitude to the organizers of the CAETE, especially the ITC, for providing us with this platform to showcase our products and services to the Chinese and African markets. We would also like to thank our customers, suppliers, and supporters for their continued trust and cooperation. We look forward to expanding our business and impact in China, Africa, and beyond." - CEO of the Company.
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