China's Global Re-emergence: Challenge or Opportunity for Africa?

China's Global Re-emergence: Challenges and Opportunities for Africa?Leonce NdikumanaUniversity of Massachusetts Amherst

Group of 78 Annual Policy Conference27-29 September, 2013, Ottawa, Canada

Why should Africa be interested in the global agenda of engaging and containing China?Is Chinas (Re)-Emergence a Challenge or an Opportunity for Africa? How does a re-balance of global power serve the interests of Africa?An African perspective

Rising growth ratesImprovements in social development, althoughPoverty remains highUneven development: inequality horizontal and verticalBut there are deep structural challengesContext: African economic performance, Good but not good enough

Two challenges:Sustainability of growthEmployment creation, especially for the youth

Two key elements of the solution:Scaling up Infrastructure DiversificationTwo key challenges for Africa

Rising trade and investmentChina-Africa: some facts

China has diverse African partners, not just oil-rich countries (Angola, Sudan, Nigeria)E.g., China-Ethiopia trade in 2012 = $1.4bn = 20 times the 2000 level; thanks to quota-free duty-free exports to China

Facts (contd)

Exports to china, % of total exports

Imports from China, % of total importsDR Congo48.1Togo32.5Mauritania46.6Benin31.1Congo, Rep.38.5Gambia27.9Angola38.1Ghana20.4Gambia37.5Zambia34.8Mali31.0Burkina Faso21.0

Identifying complementarities and compatibility between Africas interests and Chinas interestsBuilding Africas capacity to bargain and negotiate with ChinaAfricas engagement strategy

Africa can:Leverage Chinas capital to the extent that it can: Secure fair rent sharing from resource-seeking capitalMake Chinese capital catalyze domestic financeLeverage Trade with China if it fosters diversificationLeverage Chinas moving up the manufacturing value chain by developing labor intensive manufacturingRide on Chinas strength to improve its relative position in global governanceThis puts a heavy burden on Africas leadership

Can Africa leverage Chinas emergence?