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China and Africa : Expanding Economic Ties in an Evolving Global Context

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World Bank (WB)

Abstract: Economic growth in Sub-Saharan Africa (SSA) has averaged roughly 5 percent per year over the past decade, improving living standards and bolstering human development indicators across the continent. Stronger public institutions, a supportive, private sector focused policy environment, responsible macroeconomic management, and a sustained commitment to structural reforms have greatly expanded opportunities for countries in SSA to participate in global markets. In recent years, many countries in the region have benefited from an increasingly favorable external environment, high commodity prices, and an especially strong demand for natural resources by emerging economies, particularly China. Over the longer term, leveraging Chinese investment to support broad-based growth will require policies designed to boost the competitiveness of sectors in which China s economic rebalancing may create a comparative advantage for SSA. To date, few African countries have been able to benefit from large-scale Chinese investment outside the resource sector. However, as China s growth slows and its economy shifts toward a more consumption-driven model, it is likely that global demand for resource imports will slow as well. Countries with the most heavily concentrated export mix, particularly in the mineral and oil sectors are the most vulnerable to China s economic rebalancing and should be ready to adopt measures to mitigate the impact of negative terms-of-trade shocks. By contrast, as wage rates in China continue to rise and firms refocus their attention on domestic demand, countries in SSA will be well positioned to exploit emerging opportunities for investment in export-oriented manufacturing. Ethiopia provides an instructive example, as its inexpensive yet relatively skilled labor force, coupled with the government s proactive efforts to court Chinese investors, have enabled Ethiopia to attract substantial investments in labor-intensive industries. Infrastructure enhancement, workforce development, and good-governance reforms offer a promising strategy for many countries in the region. Although the establishment of industrial zones has yielded mixed results, several salient success stories warrant careful attention. This report discusses how Africa could take advantage of the untapped opportunities offered by China s progressively intensifying investment and trade ties with SSA. It is hoped that this analysis will enrich the ongoing dialogue between policy makers, private firms, and civil society regarding China s increasingly important role in the growth and development of Sub-Saharan Africa.
Type: Working Paper
Publications & Research
Publications & Research :: Working Paper
Link: http://hdl.handle.net/10986/21788
Subject: ACCOUNTING
AGRICULTURAL COMMODITIES
AGRICULTURAL PRODUCTS
AGRICULTURAL SECTORS
AGRICULTURE
AMOUNT OF CAPITAL
APPROVAL PROCESS
BACKED FINANCING
BACKED LOANS
BANK FINANCING
BANKING LAWS
BASE YEAR
BENCHMARK
BILATERAL TRANSACTIONS
BUSINESS ENVIRONMENT
BUSINESS OPPORTUNITIES
CAPITAL FORMATION
CAPITAL INVESTMENT
CAPITAL REQUIREMENT
CAPITAL STOCK
COMMERCIAL BANK
COMMERCIAL BANKS
COMMERCIAL LENDING
COMMERCIAL LOANS
COMMODITIES
COMMODITY
COMMODITY PRICE
COMMODITY PRICES
COMMUNICATIONS TECHNOLOGY
COMPARATIVE ADVANTAGE
COMPARATIVE ADVANTAGES
COMPETITION POLICIES
COMPETITIVE ADVANTAGES
CONSUMER GOODS
CONSUMERS
CONSUMPTION RATES
COUNTRY MARKETS
CREDIT ACCESS
CREDIT LINE
CREDIT LINES
CREDIT PROGRAMS
CRITICAL INFRASTRUCTURE
CURRENCY
DEVELOPING COUNTRIES
DEVELOPING ECONOMIES
DEVELOPMENT ASSISTANCE
DEVELOPMENT BANK
DEVELOPMENT BANKS
DEVELOPMENT FINANCE
DEVELOPMENT PROJECTS
DIRECT ACCESS
DIVERSIFICATION
DIVIDENDS
DOMESTIC MARKET
DOUBLE TAXATION
ECONOMIC COOPERATION
ECONOMIC CRISIS
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
ECONOMIC POWERS
ECONOMIC RESEARCH
ECONOMIES OF SCALE
EMERGING ECONOMIES
EQUIPMENT
EXCHANGE RATE
EXCHANGE RATES
EXPORT COMPETITIVENESS
EXPORT CREDITS
EXPORT GROWTH
EXPORT PROCESSING ZONE
EXPORTER
EXPORTERS
EXPOSURE
FINANCES
FINANCIAL ASSISTANCE
FINANCIAL BENEFITS
FINANCIAL CRISIS
FINANCIAL FLOWS
FINANCIAL MARKETS
FINANCIAL NETWORK
FINANCIAL SERVICES
FINANCIAL SUPPORT
FINANCING ARRANGEMENTS
FIXED CAPITAL
FIXED INVESTMENT
FORECASTS
FOREIGN CAPITAL
FOREIGN DIRECT INVESTMENT
FOREIGN INVESTMENT
FOREIGN INVESTORS
FOREIGN OWNERSHIP
FOREIGN TRADE
FREE LOANS
FREE TRADE
GDP
GLOBAL EXPORTS
GLOBAL INVESTMENT
GLOBAL MARKETS
GLOBALIZATION
GROSS DOMESTIC PRODUCT
GROSS FIXED CAPITAL FORMATION
GROWTH RATE
GROWTH RATES
HOLDING
HOME COUNTRY
HUMAN DEVELOPMENT
INCOME
INCOME TAX
INDUSTRIAL ECONOMY
INDUSTRIALIZATION
INFLATION
INFRASTRUCTURE FINANCING
INFRASTRUCTURE PROJECTS
INITIAL INVESTMENT
INSURANCE
INTEREST RATES
INTERNATIONAL DEVELOPMENT
INTERNATIONAL ECONOMICS
INTERNATIONAL MARKETS
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INVESTING
INVESTMENT CLIMATE
INVESTMENT CONTRACTS
INVESTMENT FLOWS
INVESTMENT OPPORTUNITIES
INVESTMENT POLICY
INVESTMENT PROJECTS
JOB CREATION
JOINT VENTURES
LABOR MARKETS
LARGE-SCALE INVESTMENT
LARGE-SCALE INVESTMENTS
LESS DEVELOPED COUNTRY
LIBERALIZATION
LINE OF CREDIT
LIVING STANDARDS
LOAN
LOAN PROGRAMS
LOAN SIZE
LOCAL GOVERNMENTS
LOCAL MARKET
LOW-INCOME COUNTRIES
MACROECONOMIC MANAGEMENT
MACROECONOMICS
MANUFACTURING INDUSTRIES
MANUFACTURING INDUSTRY
MERGERS
MIDDLE-INCOME COUNTRY
MONETARY FUND
MULTILATERAL DEVELOPMENT
MULTINATIONALS
NATIONAL DEVELOPMENT
NATURAL RESOURCE
NATURAL RESOURCES
NEW BUSINESS
OFFSHORE FINANCIAL CENTER
OFFSHORE FINANCIAL CENTERS
OIL RESERVES
OPERATING COSTS
OUTPUT
OUTSOURCING
PENSIONS
POLICY ENVIRONMENT
PORTFOLIO
PRICE INCREASES
PRIVATE ENTERPRISE
PRIVATE ENTERPRISES
PRIVATE INVESTMENT
PRIVATE INVESTMENTS
PRIVATE INVESTORS
PRIVATE MARKETS
PRODUCTION CAPACITY
PRODUCTION COSTS
PROFIT MARGIN
PUBLIC SPENDING
RAPID INDUSTRIALIZATION
RATE OF RETURN
RATE OF RETURN ON CAPITAL
REAL ESTATE
REAL EXCHANGE RATE
REAL EXCHANGE RATES
REGIONAL INTEGRATION
REGISTRATION PROCESS
REGISTRATION SYSTEM
RENEWABLE ENERGY
SCHOLARSHIPS
SECURITIES
STABILIZATION POLICIES
TAX RATE
TAX SYSTEM
TECHNICAL ASSISTANCE
TECHNOLOGY TRANSFER
TRADE BALANCE
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE PROTECTIONS
TRADING
TRANSACTION
TRANSACTION COSTS
TRANSFER PAYMENTS
TRANSITION ECONOMIES
TRANSPARENCY
TRUST FUND
UNION
URBANIZATION
VOLATILITY
WAGE RATES
WAGES
WORLD DEVELOPMENT INDICATORS
WORLD ECONOMY
WORLD INVESTMENT REPORT
WORLD TRADE




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