Starting December, China will cut tariffs for goods from 43 of the world’s least developed nations, primarily across Africa and Asia. This policy means these countries can export products like crops, seafood, and raw materials to China without facing high import duties. For these nations, reduced shipping costs and easier market access will potentially fuel economic growth, allowing exports to increase profitability. This is a significant opportunity, especially for Africa, which will have 33 of its nations benefit from this change.
China’s latest tariff policy builds on efforts to expand ties with the developing world, with the hope of establishing more influence in global markets by promoting trade liberalization. With 25% of merchandise exports from these countries already directed to China, Beijing’s policy could cement its position as a top trade partner. This not only strengthens economic ties but could also be a strategic move to gain diplomatic support from these nations on international platforms, especially as the U.S. and Europe work to limit Chinese exports.
For developing countries, increased trade with a massive market like China could spur growth, job creation, and even infrastructure investment as they work to meet rising demand. Economically, this illustrates how reducing trade barriers can lead to shared benefits, promoting mutual growth and deeper partnerships between economies at different development stages.
THINK LIKE AN ECONOMIST!
Q1. Define the term “trade liberalization.”
Q2. Explain one way developing countries could benefit from reduced tariffs on exports to China.
Q3. Analyse how the removal of tariffs could influence China’s relationship with the Global South.
Q4. Discuss the potential impact of trade liberalization on economic development for least developed countries.
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