Quality concern over Chinese products


A USD 50,000 caustic soda order that turned out to be salt is just oneof the problems Ethiopian business people say they are experiencing from export companies in China. Such was the issue raised during discussions held between Ethiopian and Chinese business owners last week. The disscusion also addressed the quantity, quality of products and contract enforcement as well as fostering better relations. “A lot of the products are up to our standards, but there are a few cases where we have found defects and if the problems are not solved, it could affect our business relationship when consumers become disappointed,” said Junedi Besha, Vice President of ECCSA in opening remarks of the meeting with the Chinese business delegation lead by the Vice Chairman of the Chinese Council for Promotion of International Trade last Tuesday.
“I urgently ask the Chinese Council for Promotion of International Trade to work hard to rectify the existing predicament in this area and come up with new ways of doing business,” he added.
“When the price fluctuates it becomes hard for us to receive the products from Chinese companies even though we already agreed to a contract. Right now our company is experiencing this type of problem as the shipment for our cargo has been delayed for three months which means we are losing money,” said a businessman on condition of anonymity.
Most Ethiopian importers eye the Chinese export market because their prices tend to be among the lowest on the global market, according to an international trade expert.  
“Three decades ago when China opened up its market to the rest of the world, there were only 12 international trading companies in China. Now, there are more than one million companies engaged in the export business. If such claims of malpractices are proven with evidence, we are ready to correct it. We will do it together,” promised Dong Songgen, Vice Chairman of the Chinese Council for Promotion of International Trade.
“A lot of the issues are occurring because companies are finding their partners in an improper way. It is better to find partners through proper channels. Malpractices can be corrected through our embassy,” said Songgen.           
The trade turnover between Ethiopia and China reached close to USD 1.7 billion in 2011, up from a little over USD 350 million in 2004. Ethiopia’s export to China has grown rapidly. It reached USD 280 million in 2011, compared around USD 15 million in export earnings during 2004. The same is true with imports. Ethiopia’s import revenue has swelled from USD 338 million to USD 1.4 billion in just seven years; a trade balance in favor of China.
Ethiopia enjoys duty free access to the European market under the Everything But Arms initiative. It has preferential market access to Canada, Japan and other countries. China and India also entitle duty and quota free market access for most Ethiopian products. In addition, the country reaches more than 420 million consumers in 19 African countries through COMESA; the Common Market for Eastern and Southern Africa.
Chinese investment in Ethiopia is showing significant growth. From 1998 to 2012, Chinese investors registered an investment capital worth of USD 2.4 billion based on information obtained from ECCSA.