China has become Africa’s most important trading partner, lender of infrastructure, and source of foreign direct investment (FDI) growth. China’s perspective on Africa is strikingly different from that of the West, especially the United States, which tends to focus on the continent’s poverty rather than its potential richness. There have been innumerable poverty reduction and development aid initiatives run by the West in Africa for the past fifty years. However, the continent still has the highest concentration of people below the poverty line. China’s expanding economic influence has led to significant involvement in worldwide financial policies and initiatives.
China’s Impact on the World
China wants to become technically independent from the United States as tensions between the two countries continue to rise. China’s position as a key commercial partner for many nations has given it access to a powerful range of tools to exert its impact in bilateral and international settings. Sun (2017) pursues Chinese businesspeople and discovers that they are factory owners, replicating in Africa the model of the global manufacturing powerhouse that they so recently perfected in China. In light of this, the prospect of Africa becoming industrialized within the next generation is very appealing. While this approach to progress may seem antiquated to some, it is the only one with a record of improving people’s lives throughout society.
The impact of China’s trade, investments, and ideologies on other countries is expanding. It is the top exporter in value and has been spending heavily on infrastructure and development abroad, making it the world’s second-biggest economy. The Next Factory of the World book challenges conventional wisdom about China’s place in the global economy while offering a hopeful outlook for Africa’s future as a major player on the world stage (Sun, 2017). Insightful business, economic analysis, and engaging first-person narratives of business owners, employees, and government officials are critical to China’s impact on development in Africa and worldwide.
The Prospects of Africa in a Globalized Economy
African economies are evolving away from their reliance on extractive sectors due to a labor surplus, political stability, and technological advancements. For over a century, the primary goal of FDI in Africa was to exploit the continent’s natural resources for financial gain. However, the tide has turned after the millennium change, especially in recent years (Sun, 2017). Investors worldwide are flocking to Africa not so much for its natural resources but for the potential of its people. Fewer people are living in extreme poverty, and democratic institutions have been built and are widely acknowledged. These democratic transitions are still young and vulnerable, developing at varying rates in different nations (Asongu & Odhiambo, 2019). Regarding significant infrastructure projects like ports and railroads, FDI in Africa frequently stems from state-owned firms and global or bilateral institutions with goals beyond pure profit.
The positive effects of Africa’s improved investment climate are self-reinforcing, even if they are only one of several causes causing the shift. Irrespective of their motivation, when one developer constructs a port or a road, another investor may use it. Not only will future investors in Africa have an easier time constructing their enterprises, but Africans themselves will reap the benefits. Due to its vast resources, Africa may soon replace Europe as the world’s leading economic power. It has some of the fastest-growing economies right now, and its population is projected to reach 2.1 billion by 2050, an increase of 184% from its current size (Asamoah et al., 2019). The growing purchasing power of people in other parts of the world will raise demand for African exports, which would, in turn, benefit national economies across the continent.
Conclusion
China has emerged as Africa’s preeminent economic partner, infrastructure lender, and net investor in recent years. Due to its growing economic power, China has become increasingly involved in international financial initiatives. Chinese businesspeople are flocking to Africa, where they put their money into infrastructure projects and other long-term investments. Demand for African exports will increase attributable to rising global incomes, which is good news for the economies of African countries.
References
Asamoah, L. A., Mensah, E. K., & Bondzie, E. A. (2019). Trade openness, FDI and economic growth in sub-Saharan Africa: Do institutions matter?Transnational Corporations Review, 11(1), 65-79. Web.
Asongu, S. A., & Odhiambo, N. M. (2019). How enhancing information and communication technology has affected inequality in Africa for sustainable development: An empirical investigation. Sustainable Development, 27(4), 647-656. Web.
Sun, I. Y. (2017). The next factory of the world: How Chinese investment is reshaping Africa. Harvard Business Press.