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China’s Engagement with Sub-Saharan Africa
By admin July 28, 2015

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According to the report from the World Bank, China’s economic ties with Sub-Saharan Africa (SSA) have expanded over the past decade, including trade, direct investment, as well as official development assistance.

 

In regards to trade, China has become the largest trading partner with SSA as of 2009. From 2000 to 2013, exports to SSA from China have increased approximately 45 percent, and imports from SSA to China have increased approximately 50 percent. Most exports to China are comprised of commodities, including oil, gas, and metals. More diversely, imports from China include capital goods such as vehicles, generators, telecommunications equipment and factory machinery, as well as consumer and manufacturing goods.

 

Foreign Direct Investments (FDI) has doubled from 2009 to 2012, amounting to $21 billion in 2012. As the United States does, China invests mostly on the resource sector in countries such as Angola, Chad, Niger, Nigeria, Sudan, and Zambia. In addition, Chinese investment also flows to manufacturing clusters in Ethiopia, Mali, and Uganda, as well as financial sectors and small amount to an agriculture sector in these countries.

 

In terms of development finance, the largest share of China’s development funding goes to Africa. The World Bank reports that 54 billion dollars cumulatively has been financed for African region’s development, citing a source from the Government of China.

 

Although the amount of foreign aid China provides to SSA countries is far less than the amount from OECD countries (3.2 billion dollars and 26 billion dollars respectively, as of 2013), it is a huge amount of aid from one country. However, the nature and the degree of conditionality of Chinese aid highly differ with aid from OECD countries. OECD Development Assistance Committee (DAC) emphasizes social development in SSA countries, therefore bringing in conditionality for policy reforms with development aid. Accordingly, aid from OECD countries is primarily focused on the social infrastructure in health, education, water, and sanitation, and emergency reliefs. In contrast, Chinese aid to SSA is reported to be centered on infrastructure.

 

As explained in increasing figures regarding involvement in SSA, Chinese impact on the region is growing in a rapid speed. Some concern exists that China is providing foreign aid without criteria, moral standard, or consideration on effectiveness and equality. On the contrary, some argue that China is helping poor countries no matter what. The evident truth is that China’s role in development, especially when new development agendas are being agreed across countries, will be crucial in the world, not only in SSA countries.

 

For more information:

 

http://www.worldbank.org/en/publication/global-economic-prospects/special-analysis/Global-Economic-Prospects-June-2015-linkages-between-China-and-Sub-Saharan-Africa

 

http://www.economist.com/node/18586448

 

http://www.ibtimes.com/imf-worries-chinese-slowdown-could-damage-sub-saharan-economies-1576706

 

http://chicagopolicyreview.org/2014/07/10/into-sub-saharan-africa-spillover-effects-of-chinas-economic-boom-through-trade/

 


Thanks for sharing !


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