NIGERIA CHINA TRADE RELATIONS AND NATIONAL DEVELOPMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF STUDY

       Over the past several decades, the economies of the world have become greatly connected through international trade and globalization. Foreign trade has been identified as the  oldest and most important part of a country’s economic relationship. The basis for foreign trade  rests on the fact that nations do differ in their resource endowment, preferences, technology,  scale of production and capacity for growth and development. Over the past decades the volume  of trade between nations of the world has increased considerably. Particularly, Nigeria has witnessed a sharp rise in the volume of trade and investment with other nations of the world. The relations between Nigeria and China which cut across political, trade, investment, aid and  military spheres have grown so much in recent years.

The inevitability of inter-state relations emanating from the inherent tendency of man for social relations; The world of a man is in a flux. The fluidity of social relations conduces into the search for social coalescence, partnership and cooperation. Naturally, man is created with inbuilt and ever elastic gregarious instincts which propel man to enter into social relations with other men basically to eke out a living. These gregarious instincts combine with differential natural resource endowments to  induce man to develop the propensity to partner with others to address the needs of the community. Fundamentally, the scenario opens new vistas of relations between and among states in a world of change.

 International trade is recognized as the most significant determinant of economic development of a country, all over the world. The foreign trade of a country consists of inward  (import) and outward (export) movement of goods and services, which results into: outflow and inflow of foreign exchange. Thus it is also called EXIM Trade.

For providing, regulating and  creating necessary environment for its orderly growth, several bilateral trade agreements have  been entered into between and among countries of the world.

          Traditionally, African countries particularly Nigeria has traded rigorously with the developed nations, especially the European Union (EU), Canada and the United States (U.S.).  These economic relations are governed by various bilateral and regional agreements that exist  between these countries and Nigeria. Although, the relationships have gone a long way, the  development impact is contestable. However, due to the trade performance of some Asian countries that has enhanced their income and improvement in  technology, especially China and India, many African countries including Nigeria have began to  diversify their markets to these countries. This emerging trade partners have created some incentives to trade with the continent through their foreign direct investment (FDI) and aid.   

China’s first contact with Africa generally was in the early 15th  century when some Chinese traders and explorers landed along the coast of Africa. This foundation was laid by  Zheng He, the famous navigator of China’s Ming Dynasty, who led a large fleet to visit more  than 30 countries and regions in Asia and Africa. Zheng He, who lived from 1371 to 1435,  undertook the African expedition with about 2000 ships and 27,800 people. All these took place almost a hundred years before Europe discovered and colonized Africa. Sino-African relations therefore, date back to centuries.

 In Nigeria’s case, the country’s contact with China unofficially, began in the 1950s, 1957 to be precise. In fact, Nigeria’s initial contact with the Chinese was through Egypt.

It is on record  that Chan Hanq Kang, commercial officer in the Chinese Embassy in Cairo, established  unofficial trade links with Nigeria, along with Tunisia, Libya, Ghana, Ethiopia, Tanganyika (now  Tanzania) in 1957. During the colonial era, it was a taboo for Nigerians to have anything to do  with the communist world which China belonged to. Nigerians like Funmilayo Ransom Kuti a frontline Nigerian political and social activist, much to the chagrin of the colonial authorities  secretly visited Berlin and Beijing in the 1950s to attend meetings. Her application for the  renewal of her passport was turned down. All contacts with the Eastern bloc countries and China were prohibited and proscribed. All Nigerian students who obtained benevolent scholarships from undisclosed sources and Nigeria Trade Union Leaders who attended international conferences in those countries have to be smuggled out of Nigerian through Ghana.

 But this position was reversed in 1958 by the Nigerian Prime Minister, Tafawa Balewa in a policy statement in parliament which states in part: “we shall of course endeavor to remain in  friendly terms with every nation which promises and respects our sovereignty”.

However, Nigeria’s first contact with the People’s Republic of China (PRC) was in 1960, when the Chinese government was invited to the country’s independence celebrations.

Nigeria’s first contact with China is designated as “the era of  Informal Ties, 1960-1971”. At independence, Nigeria political leadership was not only pro-west but vividly anti-communist. The resultant effect of this peculiar disposition was that Nigeria’s attitude towards Communist China followed what had then emerged as a clear pattern of most of her relations with the socialist states-diplomatic isolation accompanied occasionally by bitter attacks against communist subversive ideology at home. As noted at independence, the worldview of Nigeria’s political leadership did not consider close relations with the People’s Republic of China as one of the agenda which the country would need to cultivate. While the then Prime Minister Tafawa Balewa declared on October 7, 1960 that Nigeria would be friendly with all countries that recognize and respect her sovereignty, territorial integrity and political independence, he soon made it clear thereafter where the line was going to be drawn. The leaders of the three major political parties- the Northern People’s Congress (NPC), the Action Group (AG), and the National Convention of Nigerian Citizens (NCNC) were for various reasons not comfortable with communism. The ideology was not properly understood and was therefore feared. Consequently, neither Chief Obafemi Awolowo nor Dr Nnamdi Azikiwe visited a communist country during their life time. This was despite the fact that Nigeria was the third largest market in Africa for Chinese goods with a steady growth in import from China. At the same time, the Chinese did not allow Nigeria’s ideological preference for  liberalism to stand in the way of their obviously very lucrative trade relations with the country. 

 Nigeria which had consistently voiced its willingness to formalize ties with People’s Republic of China did so on 10 February 1971.Nigeria established relations with China in February 1971 and has since then maintained good relations with it. China as economic partner to Nigeria has been very dogged and focused in her relations with Nigeria over the decades. Despite the ups and downs of Nigeria-China relations, the  Chinese have continued to ensure that their market shares in Nigeria remains on a steady path of growth. This should suggest that China has a long term plan for its engagement with Africa.  Meanwhile, China and Nigeria have remarkably many things in common. The two countries share the same national day, are both multi-racial. In addition, China has 56 ethnic groups, Nigeria has about 250. Nigeria’s population is the largest in Africa, and China is not only the largest in Asia but largest in the world. China had suffered from humiliation and occupation during its colonial period and Nigeria also had its fair share of colonial experience and humiliation. 

 The trade relations between Nigeria and China have now become most evident. In Lagos,  Onitsha, Aba, Kano, Nnewi and almost every Nigerian market, one can buy something, Chinese  textiles, food items, drugs, electronics, phones, computers and cooking utensils. Nigeria’s  communications satellite (NIGCOMSAT-1) was designed, built and partly funded by China.

The  NIGCOMSAT-1 was also launched in China. Nigeria is therefore, doing so much today with  China in terms of trade and investments. The Nigerian government in recent times has found  Chinese companies more sensitive to economic challenges than their western counterparts.  Indeed, the Olusegun Obasanjo Administration (1999-2007) came with increase in the tempo of  Nigeria-China bilateral relations. This is understandable since Nigeria had just freed itself from  the status of a pariah state which Nigeria’s burdensome military dictatorship forced on it.

However, the focus of this study is to analyze the impact of Nigeria-China relations on economic development in Nigeria between 2011 and 2015; particularly to examine the impact  of bilateral trade agreements between Nigeria and China on the volume of Chinese trade with  Nigeria and to establish a link between the increase in the volume of Nigeria-China trade on  economic development in Nigeria. Since the literature on trade relations is wide, this period is chosen in order to present a summary of more recent findings on the subject. Again, the years under review represent a period of renewed foreign engagements in Nigeria partly due to transition from long period of military to civil rule.

1.2  Statement of Research Problem

The foundation of Nigeria-China relations dates back to the early 1960‘s when Chinese delegation visited Nigeria in 1964 seeking to establish diplomatic ties with the country. Ever since then, Scholars of foreign policy have produced research works on the bilateral relationship that exist between Nigeria and China. This research examines the Nigeria – Chinese economic and trade relations; trends, problems, and prospects from 2011– 2015. It is a scholarly investigation into the economic and trade relations between China and Nigeria. It investigates the nature and character of the economic and trade relations and proffers answers to such fundamental questions as: 

  1  Has the Nigeria-China bilateral trade agreements enhanced the volume of Chinese trade with Nigeria within the period of study?

2  Has the increase in the volume of Nigeria-China trade enhanced economic development in Nigeria within the period of study?

1.3 Objective of the Study

The Nigerian government in the era of globalism is into different relations with countries in order to boost its economy. However, the opening of its borders and ties to China has increased tremendously compared to most countries of the world. This study has both broad and specific objectives. The broad objective of the study is to analyze the impact of the Nigeria-China trade relations on economic development within the period, 2011-2015. Specifically, the study intends:

1. To ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria within the period of study.

  2. To determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria within the period of study.

1.4 Significance of the Study

The significance of this study cannot be underestimated. This study will lay emphasis on general historic knowledge of bilateral relation between Nigeria and China especially in the areas of bilateral trade, economic relations, politics and cultural relations.

The findings of this research work will undoubtedly provide the much needed information to government, organizations on the opportunities provided by the trade partnership between Nigeria and China, and the nature of economic relations and its effects on national development in Nigeria.

The importance of this study to the field of International Relations is that this study relates the importance of bilateral trade relations as a means of change and development, most certainly when the nations involved are in need of each other. 

1.7 Scope and Limitation

 This study intends to cover the period 2011 – 2015 of China and Nigeria trade and economic relations. Tracing some of the important contents of the Nigeria – Chinese relations involving social, economic, trade and political relations. Emphasis will focus on the trade partnership and economic relations between Nigeria and China,  starting particularly from 2011 during Goodluck Jonathan’s tenure to 2015. Trade agreements, partnerships, economic advancement efforts and mechanisms to achieving the trade relations would be reviewed. This study therefore examines economic and trade relations between the two countries, meticulously looking at the trends, problems and prospects. This study was constrained by a number of factors just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data on the progress made so far on trade from both countries, and inaccessibility to cooperate bodies engaged actively in the trade. However, efforts were made to overcome some of these shortcomings through adequate use of secondary sources of data collection.