The past week filled the cyberspace with President Muhammadu Buhari’s trip to China which many analysts adjudged as a successful economic move. During the visit to China, Nigeria recorded two major landmark following the strengthening of Nigeria/China bilateral relation.
The first news that broke out on the China deal is the $6bln investment secured from the Chinese government that will beef up more Chinese investment in the country. This investment opportunities will tackle infrastructural decay in the country and will have a huge impact in key sectors of the economy including power, solid minerals, agriculture, housing and rail transportation.
The Yuan deal is a sound economic move made by the president in his visit to China, this bilateral agreement will ensure Nigeria/China business transactions are consummated in Chinese Yuan currency in order to weaken the dollar dominated economy.
Every sound economic analyst will agree that these moves are spectacular considering the fact that a global economic slump is ravaging most countries in Africa and some parts of Europe and Asia. It has also sent cold chills to the United States markets signaling the hard fact that Africa’s largest economy may be heading the way of China, by reducing the domination of the dollar economy.
While elite Nigerians and other countries laud this move and successes of the one week visit of President Buhari to China, new details emerge on the clauses and conditions attached for a smooth bilateral relation between Nigeria and China.
No Dealing with Taiwan
The first of some of the conditions attached to the Nigeria/China deal is that Nigeria will have no business and bilateral relations with Taiwan also known as Republic of China (ROC). The Peoples Republic of China (PRC) has continued to proclaim the One China policy, insisting it is the sole legal government of China and that Taiwan is a province of China, a development that has made Taiwan, also known as Republic of China (ROC), not to be recognized as a sovereign state by most countries.
Though ROC ceased to be a member of the United Nations in 1971 when it lost its UN seat as China and was replaced by the PRC, as of 2013, the ROC maintained official diplomatic relations with 21 UN member states and the Holy See. It also maintains informal relations with several other UN member states and has offices that conduct its affairs under such names as “Taipei Representative Office” (TRO) or “Taipei Economic and Cultural (Representative) Office” (TECO) in those countries.
With this scenario presenting itself, it is justifiable for The Peoples Republic of China (PRC) to make it very clear to any country that desires a bilateral relation with China including Nigeria not to deal with Taiwan as a sovereign state, this is not necessarily for economic reasons, but purely a political matter, so Nigeria will do well by abiding to this clause. Justifiable as it may sound, there are implications in avoiding Taiwan.
Nigeria/Taiwan Bilateral Relations
Nigeria and Taiwan has maintained a good bilateral relation of over 20 years, the bilateral trade volume between the two countries grew from 392.2 million dollars in 2012 to 1.6 billion dollars in 2015 with Nigeria getting a balance trade surplus of 1.2 billion dollars. Taiwanese investment in Nigeria is estimated at about 91.3 dollars million in more than 20 companies, which employed 2,000 Nigerians.
Nigerian conglomerates like Dangote Group, D-Link Nigeria and other high tech companies in Nigeria are currently benefiting from cooperative ventures with Taiwanese world renowned industries. Taiwan willingly shares its industrial know how with interested friendly countries and their entrepreneurs including Nigeria.
Taiwan’s imports from Nigeria include liquefied propane, butane and natural gas, skin and hides. Other exports to Taiwan are sesame seeds, sculptures, among others while Nigerian entrepreneurs imports machinery, home and electronic appliances among others from Taiwan.
In 2015 Taiwan said that it was ready to collaborate with Nigeria to explore mutually beneficial sectors to boost the socio-economic wellbeing of the peoples of the two partners.
The gains and the losses
The big question every good economic strategist will ask is simple, will Nigeria gain more from China than Taiwan? The answer is also very simple, yes! China surpassed the U.S. to become the world’s biggest trading nation in 2012 as measured by the sum of exports and imports of goods, as official figures from both countries show.
China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries. The Chines economy has been a refuge to most developing countries like Zimbabwe, Angola, and over 20 countries from Europe and Asia.
President Muhammadu Buhari knows the diplomacy of China with Taiwan, and he went the China way because of the many gains and potentials of trading with China, therefore cutting ties with Taiwan may not be a big loss compared to the gains from Nigeria/China bilateral relations as seen from the successes recorded from the visit to China.