As Asian countries continue to record impressive economic growth rates, economic power is slowly shifting from the west to the east. Among the countries that have registered high rates of economic growth is China. As a matter of fact, China has become an economic threat even to advanced economies like Canada, Germany and United States of America.
We will write a custom Essay on Effects of China’s Economic Growth on Sub-Saharan Africa specifically for you
301 certified writers online
Due to its rapidly growing economy, China has enhanced its relationship with many countries most of them in Sub-Saharan Africa. However, this relationship has received mixed reactions from many people on whether it is beneficial or detrimental to Sub-Saharan Africa. Nevertheless, it is important to note that China’s economic growth can boost and at the same time hinder economic growth in Sub-Saharan Africa.
The benefits that Sub-Saharan Africa receives from China are numerous. To begin with, China is slowly becoming Sub-Saharan Africa’s largest trading partner. This means that Africa has increased its sales thus increasing income which leads to economic growth.
On the same note, trading with China has led to increase in prices of raw materials that are produced by countries in Sub-Saharan Africa thus leading to expansion of Gross Domestic Product (GDP). Similarly, China gives Africa a lot of money inform of soft loans to help in development projects (Lanteigne 48). Additionally, China provides the technical support that is very scarce in Africa. This is quite crucial in propelling development of these economies.
Furthermore, China has comparative advantage over Africa in production of several commodities. Therefore, China brings cheap products into Sub-Saharan Africa. This increases affordability as well as freedom of choice among consumers. In addition, China’s increased interest in Africa has revived the interest of other countries which had neglected the continent (Greenaway 111). As a result, the number of investors interested to do business in Sub-Saharan Africa has increased leading to economic development.
Unfortunately, this relationship is also detrimental to Sub-Saharan Africa. China gives its loans with a lot of restrictions including that labor should be imported form China. These types of tied loans usually benefit china more than Sub-Saharan Africa. On the same note, large numbers of people are migrating from China to Africa.
This leads to increase in population of Africa given the fact that Africa’s population growth rate is already very high. On the same note, the population increase exerts pressure on the already strained economies of Sub-Saharan Africa (Padayachee 394).
On the other hand, while cheap commodities from china are beneficial to Africans, they are also poisonous to the economy. Currently, the markets of Africa are flooded with cheap Chinese products which increase competition for locally produced commodities. Besides pushing many people out of business, the Chinese products are also killing local industries thus economically degrading Sub-Saharan Africa.
Similarly, China has compelled countries in Sub-Saharan Africa into being just exporters of unfinished raw materials (Morrissey and Evious 58). Income on raw materials is very low compared to finished products. This has not only led to the unwillingness of Sub-Saharan African countries to invest in industries, but has also hindered the probability of these countries to earn more.
The relationship between China and Sub-Saharan Africa is undoubtedly beneficial to both parties. However, the negative effects on the part of Sub-Saharan Africa should be given a second thought. China might not be truly concerned with the gains of Sub-Saharan Africa in their relationship. Therefore, Sub-Saharan Africa should not be blinded with the little aid they get. Instead, Sub-Saharan Africa should ensure that the negative effects are minimized if not eliminated.
Greenaway, David. The World Economy: Global Trade policy 2009. Hoboken: John Willey and Sons, 2011. Print.
Lanteigne, Marc. Chinese Foreign Policy: An Introduction. London: Routledge, 2009. Print.
Morrissey, Oliver and Evious Zgovu. The Impact of China and India on Sub-Saharan Africa: Opportunities, Challenges and Policies. Marlborough: Commonwealth Secretariat, 2011. Print.
Padayachee, Vishnu. The Political Economy of Africa. London: Routledge, 2010. Print.