Here’s why China’s trade deal with Mauritius matters

China’s small-state-first trade diplomacy, starting in New Zealand followed by Iceland, and now having reached Mauritius, appears to reflect a preference for a “side door” and small-scale experimental approach to what is ultimately intended as a regional trade policy. This way, China gains experience in understanding the regional “rules of the road” and incrementally builds up a brand as an effective trade partner in the particular region.

Unlike in the case of Iceland and New Zealand, Mauritius, however, already plays an important role as an investment entrepôt for the subcontinent. This likely makes Sino-Mauritian ties even more important for the rest of the continent to watch. The FTA agrees to promote “the development of a Renminbi clearing and settlement facility in the territory of Mauritius”, and also to share “expertise in fintech to promote innovation in financial services”. As China evolves its digital currency plans, it may ultimately be Mauritius that leads in this area for Africa.

With the Forum on China-Africa Cooperation (FOCAC) 2021 on the horizon, these frontier bilateral trade policy case studies offer a useful lens into China’s broader bilateral and regional trade policy norms and practice. Understanding these patterns and related issues in turn may usefully inform the continent’s own increasingly ambitious regional and global trade agenda.