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China's Economic Impact in Africa
Transcript of China's Economic Impact in Africa
Othman Chraibi 1331950 Sino-African Relations Content 1. History of the diplomatic relations
2. China’s economic impact in Africa
3. Understanding China’s economic presence in Africa
4. The influence of the Sino-African relationship on the rest of the world a. Why is Africa so important to China? - Resources: Oil
labours - Market - Allies To advance diplomatic influence
To isolate Taiwan China’s economic reform and rise World trend: emergence of developing countries Why is China the dominant player in Africa instead of the West? 1. China is the workshop of the world 3. Heavy industries have become more significant in China. Since 1979, China has carried out massive economic reforms China demands more raw materials and energy resources from abroad. - West: Marginal concern over Africa; colonial history
Mainly focuses on oil and other commodities b. Is China's economic presence in Africa positive or negative? -China: Historical friendship
Non-stringed investment; non-interference policy
Comprehensive aids including infrastructure
Soft power boosting Africa is perceived as rich in natural resources, especially in oil, nonferrous metals and fisheries China's export structure meets demand in Africa where price is of more concern than quality. 2. China as a growing market for commodity China has experienced an unprecedented phase
of industrialisation and economic development. African exports to China started accelerating around 2000, and have since risen at an annual growth rate of more than 50 per cent.
Agriculture products (oranges from Egypt, wine from South Africa, cocoa beans from Ghana...)
…… China's Investment Sino-African Trade Concentrated in commodities
Taking exports and imports together, China is Africa’s largest trading partner Aid Official nonconcessional loans Debt relief Chinese enterprises have been active in infrastructural projects in Africa. External assistance as defined in the government budget plus concessional loans
disbursed by China Eximbank The nonconcessional lending of China Eximbank is rising rapidly and is larger than that of other major export credit agencies. China takes an active part in debt relief operations for Africa within the international multilateral framework. Concessional loans: lower interest rates, longer repayment periods. Debt relief means that China cancels the mature governmental debts of some developing countries. Alden, C., Institute, International African, & Society, Royal African. (2007).
China in Africa: Partner, Competitor Or Hegemon? : Zed Books.
Besada, H., Yang, W. & Whalley, J. (2008). China’s Growing Economic Activity
in Africa. NBER Working Paper No. 14024. May 2008. Retrieved from
http://www.nber.org/papers/w14024 on 16, Mar. 2013.
Brookes, P. & Ji, H. S. (2006). China’s influence in Africa: implications for the
United States.No. 1916. The Heritage Foundation.Retrieved from
Cheng, Y. S. J. & Shi, H. G. (2009). China's African Policy in the Post-Cold War
Era, Journal of Contemporary Asia, 39:1, 87-115.
Christensen. B. V. (2010): China in Africa - A Macroeconomic Perspective,
www.cgdev.org, working paper 230 .
Eisenman, J. & Kurlantzick, J. (2006). China's Africa Strategy. Current History;
May 2006,p. 219. Retrieved from http://www.relooney.info/SI_Oil-
Politics/China-Energy-Oil-Africa_26.pdf on 16, Mar. 2013.
Jacques, M. (2012). When China Rules the World: The End of the Western
World and the Birth of a New Global Order: Second Edition: Penguin
Group US. Is China's economic presence in Africa positive or negative? Is China's economic presence in Africa positive or negative? -Conclusion
Short term: positive
Long term: ? It depends on whether China is willing to:
Change the corporate governance style
Go beyond natural resources exploitation
Raise concern over democracy and human rights Merits Increased Employment Setting up businesses and running projects
that require man power Investment Comprehensive aid including infrastructural projects
e.g. Benguela Railroad , Angola Fair deals Generally African countries have reasonable deals with the Chinese
Some are even able to set the Chinese against other competitors to drive a high price Improved Human Capital Much needed investment into training Africans
Chinese companies employ 110,000 local people, trained 54,000 local employees
China's Universities offers scholarships to African students Better Finance from China Chinese loans are more flexible than those from the West (not only MNCs but smaller firms also)
Boosting up the strategic importance of Africa in the world economy In the 14th Century:
Journey of the Moroccan traveller Ibn Battouta to parts of China.
Visit of the Somali explorer, Said of Mogadichu to China.
Under the Ming Dynasty, the amiral Zheng He and his fleet rounded the coast of Somalia and Mozambique
China signed the first official bilateral trade agreement with Algeria, Morocco,
Egypt , Guinea and Soudan
Zhou Eilan, the first primer of the People’s Republic of China, did a ten country tower to Africa in 1963 History of the diplomatic relations History of the diplomatic relations In 1971s, the friendly relations to Africa paid off, as the People’s Republic of China entered the UN with help from African countries.
Since 1997, around 40 african heads of state have visited the PRC.
In 2000, creation of the FOCAC, the Forum on China and Africa cooperation: 1st summit in Beijing How is the Sino-African relationship influencing the rest of the World? "China’s approach to our needs is simply better adapted than the slow and sometimes patronizing post-colonial approach of European investors, donor organizations, and non-governmental organizations. In fact, the Chinese model for stimulating rapid economic development has much to teach Africa.”
-Abdoulaye Wade, 2008 "We have turned East where the sun rises, and turned our backs to the West, where the sun sets."
-Robert Mugabe “Business is business. We try to separate politics from business ... I think the internal situation in the Sudan is an internal affair.”
- Deputy Foreign Minister Zhou Wenzhong New Coupling African resources Chinese exports Chinese growth Chinese capital Chinese Investments in Africa African infrastructure depends on are produced with are dealt in exchange for is financed by exists in surplus which leads to Depletion of natural ressources Demerits Bad corporate governance and economic order Becoming a supplier of primary commodities and fail to further industrialize Extraction of natural resources threatens Africa's environment and industry The support of African dictatorships