What Drives China’s Growing Role in Africa?
What Drives China’s Growing Role in Africa?
relationship came into the spotlight during the summit of the Forum on China-Africa
Cooperation (FOCAC) in Beijing in November 2006 and the Annual Meetings of the African
Development Bank (AfDB) in Shanghai in May 2007. While the expansion of trade and
investment between Africa and China has been generally welcomed, concerns have been
expressed about how China’s growing presence might affect African development.2 But what
roles exactly has China played? What drives China’s trade and financial involvement in
Africa? What are the implications of the relationship for Africa’s other development
partners? This paper aims to shed light on these questions, particularly the first two, by
examining evidence available that relates especially to China’s state financial institutions.
There have been relatively few systematic studies of the resurging economic relations
between China and Africa. Alden (2005) reviews the evolution of Sino-African economic
relations since the 1970s; Edwards and Jenkins (2005) study trade-poverty links; Kennan and
Stevens (2005) attempt to identify possible winners and losers among African countries as
China becomes more prominent in world trade; Jenkins and Edwards (2006) examine the
direct and indirect trade impact of China and India on sub-Saharan Africa. A recent study by
an OECD staff team emphasizes trade and foreign direct investment (FDI), focusing on
China’s and India’s role in specific commodity and energy markets (Goldstein et al., 2006).
A World Bank study investigates constraints or policy challenges “at the border,” “behind the
border,” and “between the borders” for increasing Africa-Asia trade and investment
(Broadman, 2007).
This paper differs from previous studies. By putting together merchandise trade, statesupported
trade credit, official development assistance, debt relief, FDI, and contract labor
services, it paints a broader picture of Chinese-African economic relations and highlights the
changing roles of China’s public and private sectors. In seeking to explain the recent rise in
China-Africa trade and capital flows, the analysis hopes to contribute to a better
understanding of the forces shaping China-Africa relations.
The remainder of this paper is organized as follows: Section II presents information on the
multiple dimensions of China-Africa economic relations beyond merchandise trade, which
has been relatively well documented. The role of government policies and China’s public
sector, particularly state financial institutions, is examined in Section III. Section IV then
discusses how China’s private traders and investors and its corporate sector in general are
expanding China-Africa economic exchanges. Section V assesses other factors behind
China’s growing role in African development, with special attention to the complementary
trade pattern and growing markets for each other’s exports, Africa’s demand for
infrastructure, and China’s differential approach to financing social needs and business development—and the possible implications for the future of China-Africa economic
relations. The last section summarizes the main findings of the paper.
IMF Working Paper
African Department
What Drives China’s Growing Role in Africa?
Prepared by Jian-Ye Wang
October 2007
What Drives Chinas Growing Role in Africa - To learn more about this author, visit International Monetary Fund's Website.
Like this article? Share it with your friends
China’s fast-growing economic ties with Africa are attracting considerable attention. The
relationship came into the spotlight during the summit of the Forum on China-Africa
Cooperation (FOCAC) in Beijing in November 2006 and the Annual Meetings of the African
Development Bank (AfDB) in Shanghai in May 2007. While the expansion of trade and
investment between Africa and China has been generally welcomed, concerns have been
expressed about how China’s growing presence might affect African development.2 But what
roles exactly has China played? What drives China’s trade and financial involvement in
Africa? What are the implications of the relationship for Africa’s other development
partners? This paper aims to shed light on these questions, particularly the first two, by
examining evidence available that relates especially to China’s state financial institutions.
There have been relatively few systematic studies of the resurging economic relations
between China and Africa. Alden (2005) reviews the evolution of Sino-African economic
relations since the 1970s; Edwards and Jenkins (2005) study trade-poverty links; Kennan and
Stevens (2005) attempt to identify possible winners and losers among African countries as
China becomes more prominent in world trade; Jenkins and Edwards (2006) examine the
direct and indirect trade impact of China and India on sub-Saharan Africa. A recent study by
an OECD staff team emphasizes trade and foreign direct investment (FDI), focusing on
China’s and India’s role in specific commodity and energy markets (Goldstein et al., 2006).
A World Bank study investigates constraints or policy challenges “at the border,” “behind the
border,” and “between the borders” for increasing Africa-Asia trade and investment
(Broadman, 2007).
This paper differs from previous studies. By putting together merchandise trade, statesupported
trade credit, official development assistance, debt relief, FDI, and contract labor
services, it paints a broader picture of Chinese-African economic relations and highlights the
changing roles of China’s public and private sectors. In seeking to explain the recent rise in
China-Africa trade and capital flows, the analysis hopes to contribute to a better
understanding of the forces shaping China-Africa relations.
The remainder of this paper is organized as follows: Section II presents information on the
multiple dimensions of China-Africa economic relations beyond merchandise trade, which
has been relatively well documented. The role of government policies and China’s public
sector, particularly state financial institutions, is examined in Section III. Section IV then
discusses how China’s private traders and investors and its corporate sector in general are
expanding China-Africa economic exchanges. Section V assesses other factors behind
China’s growing role in African development, with special attention to the complementary
trade pattern and growing markets for each other’s exports, Africa’s demand for
infrastructure, and China’s differential approach to financing social needs and business development—and the possible implications for the future of China-Africa economic
relations. The last section summarizes the main findings of the paper.
IMF Working Paper
African Department
What Drives China’s Growing Role in Africa?
Prepared by Jian-Ye Wang
October 2007
What Drives Chinas Growing Role in Africa - To learn more about this author, visit International Monetary Fund's Website.
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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