Africa latest blue ocean for SMEs seeking global growth

African countries among global export destinations posted the highest export purchasing managers' index for Chinese trading companies in July, making the overseas markets a new blue ocean for small and medium-sized enterprises seeking business expansion overseas, according to a newly released industrial index.

International cross-border services provider XTransfer released the XTransfer PMI on Tuesday in Guangzhou, Guangdong province. The index is the first of its kind ever initiated by a private enterprise in China to focus on foreign trade trends.

Among various export destinations, the export PMI for African countries reached the highest of 53.7, reflecting a stronger interest among companies in China's foreign trade sector toward the African markets.

"Trade disputes between China and the United States have evolved into global trade disputes, yet China's SMEs in foreign trade have shown great resilience and innovation, actively exploring new markets outside the US and Europe," said Deng Guobiao, founder and CEO of XTransfer.

"Emerging markets, such as those in Africa, have become new blue oceans — which refer to new or uncontested markets — for Chinese exporters, offering vast business opportunities due to demographic dividends and infrastructure needs," Deng said.

A subindex concerning export orders and price for SMEs in ASEAN, Africa and Latin America demonstrated a strong performance, reflecting the continued efforts of Chinese SMEs to develop in emerging markets.

In addition, the SMEs business-to-business merchandise export PMI in July indicated China's "new three" products of lithium batteries, solar cells and electric vehicles have shown outstanding performance in export categories in July.

Southeast Asia has become a major export destination for the "new three" products, with significant growth in exports of EVs and batteries to Vietnam, Thailand, Malaysia and other ASEAN countries, the index said.

European policies promoting reduced carbon emissions and renewable energy have also driven demand for related products. Meanwhile, infrastructure demand in Latin America and Africa presents significant market potential for these categories, it said.

XTransfer PMI stood at 52.4 in July, above the 50 threshold, reflecting continued positive export momentum and strong resilience among Chinese SMEs.

According to XTransfer, the index is concluded based on analysis of various aspects of the export process, including procurement, sales, logistics, personnel and capital, aiming to assist SMEs in forecasting trends and optimizing their business strategies.

The index was derived from a sample survey of over 2,500 foreign trade-related SMEs drawn from a pool of more than 700,000 on the XTransfer services platform, covering 148 cities across the country.

The Shanghai-based company held its annual trade vision summit in Guangzhou on Tuesday, with more than 3,000 representatives from foreign trade enterprises, factories and trading companies across the country gathering to discuss global trade trends and new opportunities in emerging markets.

As a leading international cross-border trade payment platform, XTransfer has also expanded its business in emerging markets, providing fast, secure and affordable cross-border payment services to Chinese trade-related enterprises.

The company currently serves over 700,000 clients worldwide and is leading a mobile payment revolution in cross-border B2B trade, said Deng, adding that, "In the next five years, we aim for tenfold growth, at which point the mobile payment revolution will be largely complete."

Working closely with local banks and financial institutions in Nigeria, Ghana, Brazil, South Africa and other countries and regions, XTransfer has launched local currency accounts, supporting settlements in over 30 currencies.