Tanzania-China Business to Benefit From Strengthened Trade Relations

By Hilderbrand Shayo

 CHINESE State Councillor and Foreign Minister, Wang Yi, two-day visit to Tanzania last week, in my

view, reiterates China's President, Xi Jinping vision since, first and second appointed as China President in 2013.

These high profile trips and other top state officials to visit African, and in this case Tanzania aimed at solidifying and building upon ever growing Sino-Africa relations and when one look at it strategically one sees numerous economic benefits if we as Tanzania can well prepare to penetrate China market that in total has more people than Africa combined.

During the two days trip, Wang Yi, together with the Tanzania President John Magufuli, witnessed a signing of an agreement between TRC Managing Director, Mr Masanja Kadogosa and China Civil Engineering Construction Corporation (CCECC) to construct 341km stretch from Mwanza to Isaka, project if successfully completed would help to widen and to capture untapped business opportunities.

Within these two days visit, I was more interested with Dr JPM's brief speech when he dealt with statistics and the manner in which Tanzania is likely to benefit if Tanzanian industrialists manage to see trade opportunities which could be beneficial to Tanzanians.

Among statement that caught my attention was I quote 'this is time to hold into china market' Dr JPM he further listed open opportunities open to those interested to export to china, but tactically bringing in value addition component meaning he would want jobs to be created back home to help export value added products.

Amongst crops that he mentioned was cashew nuts, coffee, tea, cassava, fish and industrial fish products and cotton. These few crops along, if Tanzanians industrialist and in particular private sector can bank on them can help Tanzania product to enter into China market.

Endeavouring to reflect on this kind of high profile trip, one thing that crop in my mind is that this latest trip to Tanzania is yet another sign of China's growing engagement with Tanzania under the leadership of Dr JPM and strengthened China's role as one of Tanzania's closest economic and diplomatic ally.

Many might think such visit is more on investment and exploiting our resources but such views in my opinion are wrong because sino-Tanzania relationship dates back to the early days and has heightened in line with China's need for natural resources to sustain its economic boom and rapid industrialization on mutual benefits.

Since the first relation between Tanzania and China bilateral trade, aid, and investment in total have increased rapidly, and political relations have increased and become more interconnected than ever before. This in my view is of mammoth significance for Tanzania's political and future economic development.

In my assessment, the future of the cooperation looks bright. But as China's economy shifts from manufacturing to consumption, Tanzania could benefit more if strategically start to put in place business ties in manufacturing sector to especially in industrial capacity building to help tap into china technology to help widen china market within the region.

For instance, Tanzanian business partners, in union with reputable manufacturers of busses and trucks could set base in Tanzania and start motor vehicle bus assembly and manufacturing to tap into techno-know how, by big companies such as Yutong for normal buses, CNG buses as well as electric buses and coaches.

Spot survey shows that 60-70 per cent of Yutong buses, operating in Tanzania roads, through out major towns and cities in Tanzania and within east Africa are Chinese made, thanks to Benbros Motors Limited in cooperation with Yutong Zhengzhou Ltd, for introducing and representing this bus brand in Tanzania since 2009 to date.

Example of bus assembly plant if established in Tanzania could well complement desire and vision of Dr JPM to see Tanzania in future becoming a hub for investment and exporter of products such as buses, trucks and cars. If sealed and executed strategically, in addition to other business opportunities in other areas, Tanzania could save significantly on the use of hard currency.

Much as China market could be money spinning for Tanzania exporters, following few areas mentioned above and other opportunities that may arise thereafter constantly is important to abide by the market rules.

Tanzanian traders in my view must carefully assess the requirements determined by the importers in China because as the present state of the global economy and its intricate value chains, failing to conform to terms and condition of importers can poise some regulatory challenges.

Much as our President JPM and Chinese State Councillor and Foreign Minister, Wang Yi have together outlined prospects and trade opportunities out there to be taken up, it is my view that in Tanzania companies eying to take up task to penetrate china market should perform due diligence when planning to export goods to China, getting the appropriate licenses, and be responsive in making adjustments wherever needed, given the fast pace at which regulatory updates are being brought forward by Chinese establishment. All in all, as time goes by, the cooperation between Tanzania and China will in my view most likely create many more business opportunities for Tanzania businesses and the multiplier effect could be massive.

Hitherto, a major drawback in the world of business and trading that a country need to be aware could consist in the overreliance of a given country on a given product and its services. Major efforts by the government in my opinion will be expected to be involved into the diversification of our economy and into the design of an accurate China plan, as for us economists will say the middle kingdom's economic model in this world continues to shift.

In this sense, Tanzania as a country or as business people, much as we need business transactions, needs to be smart in every aspect.