China extends list of duty-free products from Malawi

The People’s Republic of China has extended the list of Malawi products that will be imported duty-free into China.

The extension follows the signing and exchange of letters between Chinese Ambassador Zhang Qingyang and the Minister of Industry and Trade Joseph Mwanamvekha in Lilongwe on Tuesday.

This means that local exporters now have an opportunity to export more goods to China duty-free than before, a situation, if well nurtured by the exporters, could boost Malawi’s export growth and boost the country’s economy as measured by gross domestic product (GDP) in subsequent years.

Thus, growth in exports could help narrow Malawi’s yawning trade deficit—now at K595.5 billion as of 2013 and has worsened from K164.7 billion in 2011 before deteriorating to K368.4 billion in 2012, according to a latest government annual economic report.

Mwanamvekha, speaking in an interview after the signing ceremony, said China has now extended the list of products to cover 97 percent of the tariff lines of products to be eligible for duty-free treatment from Malawi.

“Thus, the import tariffs of the affected products will be reduced to zero following the exchange of the letters today,” said the minister.

He said most of the goods whose import tariffs have been zero-rated are currently Malawi’s key products that the country’s National Export Strategy (NES) has already identified.

He added: “You talk of cotton, pulses, macadamia, fish, tobacco and related products. All those will now be going into China duty free.”

Mwanamvekha said the extension of duty free products from Malawi to China comes at a time when Malawi is working tirelessly to boost its exports.

Government, under President Peter Muntharika, envisages to double exports by 2019.

He, however, urged the business community to take advantage of China’s offer by scaling up their exports to the Asian country.

“It is of no use to have the offer of duty-free treatment on paper and not actually export products to China. I, therefore, challenge the business community to take on this offer,” said Mwanamvekha.

He thanked China for such a gesture which, he said, will go in a long way to enhance trade between the two countries.

The minister also said Malawi is currently compiling a list of bankable projects that investors can pick from, as discussed with the Chinese vice minister of foreign affairs.

“Once the compendium is out, we need to have an opportunity to sell the bankable project to Chinese investors through investment mission to China and also Chinese investors to Malawi,” added Mwavamvekha.

Malawi’s diplomatic ties with China date back to 2008 but since then the trade volumes or value between the two countries has been in favour of Beijing.

According to published data by the Trade Law Centre (Tralac), Malawi’s imports from China jumped by 211 percent from $80 million (approximately K3 billion) in 2008 to $249 million (K118 billion) in 2012.