Wednesday, October 7, 2015

Impact of Chinese and Western Economic Crises on Africa

The Centre for Chinese Studies at Stellenbosch University published on 23 September 2015 a commentary titled "Stability through Crisis: Chinese Neoliberal Development Practices Promote Sustainability and Security for Africa?" by Liam O'Brien, a PhD candidate at St. Andrews in the UK.

The author argues that the recent economic downturn in China will not reduce China's support for African nations, rather it will continue.  The author may be right; time will tell.  Certainly the dollar value of China-Africa trade has decreased because of lower commodity prices and possibly due to lower Chinese demand for African commodities.

The author goes on to argue that the impact of the economic problems in China contrast with those of Africa's traditional partners (Europe and the United States), which took to withdrawing their commitments following the economic crisis of 2008.  His evidence for this conclusion is confined to the situation in South Africa and, seemingly, only the withdrawal of UK development finance to South Africa.

South Africa does not represent all of Africa and the UK does not represent the entire West. While there may have been a brief interruption in Western investment in and financial support for Africa, the evidence suggests the relationship has largely returned to normal.  For example, cumulative Western investment and annual investment flows far exceed China's cumulative and annual FDI flows in Africa.  

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