Published on: 2015-02-21
China has had a profound influence in Africa; Chinese firms employ many Africans, invest in infrastructure, roads and power. The huge shifts taking place in the Chinese economy suggest that there may be even more new opportunities for Africa in trade and investment relations with China. Chinese investment is diverse and rising fast – from $300 million in 2004 to $16 billion in 2012, mostly in manufacturing, services, and labor-intensive industries. The era of cheap labor in China is over: China is losing competitiveness in world markets because relative wage costs are rising faster than productivity and the currency is appreciating. At the same time, relative unit labor costs in most African countries are still very high, and the business environment is poor, with frequent power cuts, infrastructure constraints and severe governance challenges.
The hangout will examine the opportunities presented by China’s involvement in Africa and what African governments must do to realize them. Some of the key issues we will explore in this hangout include:
- The distributional effect of Chinese competition on employment patterns in Africa;
- The impact on the real economies within African countries of cheaper Chinese imports;
- The spillover effects from Chinese expertise in Agriculture for Africa;
A possible manufacturing-based platform for African growth through Chinese investment;
- The feedback effects of a commodity price boom amidst rapid Chinese growth, or indeed as may be currently the case, a drop in commodity prices (such as oil) and a slowdown in project Chinese growth.
See comments and questions by the general public to the panel here.
Stephen Golub, Swarthmore College/University of Pennsylvania
Barry Sautman, Hong Kong University of Science and Technology, @hkustiems
Mwangi Kimenyi, Brookings Institution @MwangiKimenyi @BrookingsInst
Haroon Bhorat (Moderator), University of Cape Town @HaroonBhorat @JKP_Africa
Prof. Barry Sautman’s bio
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