The Impact of China and India on Sub-Saharan Africa

Opportunities, Challenges and Policies

image of The Impact of China and India on Sub-Saharan Africa
China and India’s demand for oil and other raw materials to fuel their recent economic development has led to significant trading partnerships with Africa, especially sub-Saharan Africa (SSA). China in particular is becoming a major player on the continent, not only in exports but also in terms of investment and aid flows to SSA countries.

Through detailed country-level analysis, this study offers unique contributions to the understanding of the relationship between China, India and SSA. The authors review and assess the economic impacts, identify the challenges involved and provide recommendations to assist policy-makers enhance the ability of SSA countries, individually and regionally, to derive benefits and to take advantage of new opportunities.

For academics, policy-makers and anyone interested in understanding the detailed dynamics that underpin the promises and challenges associated with South–South development.



Review of Trade Relationships

Trade is the principal sphere of economic activity through which the recent growth of China and India has affected the global balance of economic strength (see OECD, 2010). Because of low unit labour costs, modern production technologies founded on long and intensive investment in research and development, developed logistical infrastructure and aggressive export marketing practices, both countries are serious competitive global exporters of various light manufactures and high-end products. This is most pronounced for China, which has been one of the three largest exporting economies since about 2007. This contrasts with 1993 when China’s merchandise exports were barely a fifth of the US share of global exports (at 12.6 per cent, then the world’s largest merchandise goods exporter). The expansion of China’s merchandise exports has squeezed the relative importance of other industrialised economies including France, Japan and the United Kingdom (see Appendix Tables A9 and A10). India’s gain in share has been modest relative to China’s but is on the increase.


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