When the going gets tough: so far it has been relatively plain sailing for Africa and China as their trade relationship blossomed. But what will happen now that circumstances have become more challenging? Matthew Morgan investigates.

Author:Morgan, Matthew
Position:China--Africa
 
FREE EXCERPT

Events in recent weeks have taken the edge off the growing optimism associated with China's burgeoning trade relationship with Africa. Whilst there can be no doubt of the rapidly growing scale and significance of trade links between the two, the relaxed feeling of inevitability that prevailed at the China-Africa summit in November 2006 has been replaced by a growing sense of anxiety.

[ILLUSTRATION OMITTED]

Back then, 43 African Heads of State travelled to Beijing to hear Prime Minister Wen Jiabao predict that China-Africa trade will grow to $100bn by 2010, up from just $3bn in 1995, which would make China Africa's largest trading partner, eclipsing both the US and Europe.

However, when the next China-Africa summit meets in Egypt in 2009, leaders may be increasingly conscious both of the volatility of growing Chinese demand in the face of global economic uncertainty, as China's exports suffer, and of the often double-edged nature of their dealings with Africa. Consider the 250,000 Nigerian textile workers laid-off as a result of Chinese textile imports--the same imports that have reduced the cost of textiles locally and so lifted the living standards of many other Nigerians.

It is of course true that the massive amount of Chinese investment in Africa has been extremely welcome. Western involvement in Africa has frequently been exploitative and the aid it grants all too often comes with strings attached that have done little to assist long-term sustainable development to lift nations out of poverty--hence the voices advocating South-South partnerships to transcend this dependency. These partnerships are seen as being more equitable and of offering the possibility of improved terms of trade for Africa as the Bric nations (Brazil, Russia, India, and China) compete for her resources. Additionally, the Chinese policy of non-interference in other countries' affairs is viewed as perhaps another reason that makes their investment more attractive.

Principally, there is the fact that so much of Africa's trade with China, as with elsewhere, involves exporting raw materials. Cheap Chinese imports have raised the living standards of many Africans but they have also cemented the industrial status quo by preventing African businesses from growing their processing and refining capabilities and taking greater control of the value chain beyond simply extracting and exporting primary goods.

Indeed, industrialised China's competitive advantage is seemingly...

To continue reading

REQUEST YOUR TRIAL