Thursday, March 1, 2012

China's Economy and Future Impact on Africa

Daouda Cisse, research fellow at Stellenbosch University's Centre for Chinese Studies, published on 1 March 2012 a brief piece titled Chinese Economic Reforms, the Next Round - Impacts on Sino-African Economic Cooperation?

He notes that China's strong economic growth over the past three decades has been of direct benefit to Africa in terms of FDI flowing to the continent and helping Africa to emerge from the 2008-2009 global economic crisis by purchasing African raw materials.

Looking to the future, he quotes a World Bank study that suggests China's growth will slow from its previous rate of 9 percent annually to between 5 percent and 6 percent. If reforms focusing on a consumption-driven economy occur in China, the volume of Chinese outward FDI to Africa will slump and export volumes might never be like before. Cisse adds that "China will undoubtedly issue policies to reduce Chinese State Owned Enterprises and bring them home to contribute to Inward Foreign Direct Investment. China's priorities will be directed towards other sectors in order to sustain its economy."

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