China boosts African economies, offering a 'second opportunity'

Trade between China and Africa reached a record $55 billion last year, much of it coming from oil and metals.

from the June 25, 2007 edition

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Meanwhile, as commodity prices on the continent rise, so does the much needed cash flow into segments of the economy – and so do African incomes.

Sub-Saharan Africa's gross domestic product growth rate was negative in the 1970s and '80s – but, since the '90s has consistently been above 5 percent. The Sudanese growth rate is particularly impressive; a whopping 13 percent this year, say government forecasts.

Still, say some observers, the availability of cheaper Chinese products can be a mixed blessing.

In Lesotho, South Africa, and Ghana the arrival of Chinese cloth in traditional African patterns has forced some textile plants to close. In Zambia, the main opposition party has accused China of dumping inexpensive goods and bankrupting Zambian traders.

But by and large, argues Harry Broadman, a World Bank economic adviser on Africa, who recently completed a study on Chinese and Indian firms in Africa, "The Chinese are filling a market need that would simply not be filled otherwise."

Chinese manufacturers, he notes, are creating needed economies of scale, pushing African firms to be more competitive, and increasingly partnering with them. Lately, they've starting processing more goods on the continent.

"If the Africans can be proactive, through domestic reforms and flexible labor markets, they can empower themselves, use their collective leverage, and use the investments coming in for their benefit," says Mr. Broadman. "This is a second opportunity for Africa."

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