Chinas Role in Africa: Implications for U.S. Policy
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The potential move of manufacturing out of China to Africa is the next thrust. According to Justin Lin, former chief economist of the World Bank and now at Peking University, China is forecast to possibly lose up to 85m labor-intensive manufacturing jobs within the next decade. In the same way that Japan lost 9. Wages for unskilled workers in China are set to increase four-fold in ten years. Arthur Lewis. This refers to the gradual shift of a manufacturing sector toward higher-value output that is affected by the cost of production surpassing gains in productivity.
Whilst China will remain a very competitive manufacturing economy at least over the medium term, rising production costs will encourage and force Chinese firms to relocate their operations abroad. A part of this offshoring could find its way to Africa Davies, M. Edinger, H, Draper, P. It has been a very disruptive period over the last decade or so for foreign manufacturers that have battled to compete with the Chinese manufacturing machine. Others have benefitted from attracting low value chain manufacturing of textiles.
Neighboring Lesotho for example has built provided a lower cost and lesser unionized workforce to capture this sunset sector from South Africa. The inevitable result will be the relocation of Chinese low-end manufacturing to lesser-cost developing economy destinations. This can create enormous employment generating opportunities for low-income economies with nascent manufacturing sectors. The opportunity for Africa to capture a share of this revenue from relocated Chinese factories is indeed enormous.
The most notable example of this trend is in Ethiopia.
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The focus is footwear and clothing. The eventual outcome of this could be the creation of , jobs Economist, 8 th February, The third tier of Asian geese includes Malaysia, Thailand and most recently Vietnam. But the lead goose is undoubtedly China.
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Its economy is not so much a flying goose in formation as it is a Boeing roaring past — such has been its disruptive impact on sector dislocation and job destruction in competing economies. On the other hand, its positive contribution to lower inflation through the export trade of low-cost products must also be recognized. If we apply this model to Africa, can we begin to identify the economies that might become the leading geese on the continent? But South Africa is undoubtedly the most industrialized country in Africa, with the most internationally competitive business sector.
However, even with rising production and wage costs, we have not seen South African manufacturing shift to lesser-cost African economies, except perhaps textile and garment production, which has moved to Lesotho. Chinese leaders and strategists maintain that Africa is on the verge of developmental take-off — another idea that is well-received in the region — because the civil wars that raged in more than a dozen countries in the s now seem to be easing. Consequently, Chinese policymakers argue, the continent is now entering a transitional period of relative peace and stability.
Pockets of conflict still remain in areas such as Darfur, Somalia, the eastern Democratic Republic of Congo, and Ivory Coast, but overall, the Chinese argue, Africa is poised for growth, creating an opportune moment for a more engaged and expansive Chinese role.
This positive vision of current world trends is not limited to Africa, of course. Economic and political conditions may not be as favorable for growth as the Chinese believe, and the chances of near to medium-term setbacks are high.
Experience has shown that while it is possible to create infrastructure in Africa, maintaining that infrastructure is another matter altogether. China will also be challenged by the dysfunctional political realities characteristic of many African states today. In Sudan, Beijing is engaging a partner embedded in enormous political and moral controversies of its own making.
In South Africa, it is dealing with a country that is acutely sensitive to perceived infringements on its sovereignty.here
U.S.-CHINA | ECONOMIC and SECURITY REVIEW COMMISSION
Beijing is already beginning to encounter problems. Pay and working conditions in Chinese-operated mines in Zambia became an election issue in that mineral-rich country in South African trade unions, meanwhile, have expressed their opposition to the flooding of South African markets by Chinese textiles. Li Baodong said that new investments had been put on hold pending the outcome of the election.
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Moreover, relations might be broken if Sata won and carried through with a threat to restore ties with Taiwan. In South Africa, China has chosen to be more responsive to popular sentiment, agreeing to voluntary textile export quotas that have now been put in place. It comes in a period of major parallel expansion of U. This is precisely opposite to the approach China is taking with its aid and loans.
The tripling of U. The U.
Defense Department, meanwhile, is moving forward with plans to create a new Africa Command. Within the next decade, the United States will rely upon Africa for percent of its oil imports.. The reaction of the West has been predictably paternalistic. Statistics across other areas of Sino-African co-operation such as education, science and technology, agriculture, politics, culture and investments are on the rise. Late last month, the magnificent Chinese built African Union headquarters in Addis Ababa was opened during the eighteenth AU summit — a bold example of China — Africa relations at the very apex.
While Agoa has at best had modest results in integrating US-African economies as envisaged, the Forum on China Africa Co-operation Focac — the mechanism for Sino-Africa partnerships — has been assessed as successful including in the West. That both Focac and AGOA were started in yet the latter has had better impact than the former speaks volumes about the weaknesses in the Agoa policy architecture. Equally, various European Union leaders have expressed concern and dismay at the Sino-Africa ties. In a similar but much more subtle approach, the European Union has sought to engage China in the so-called trilateral cooperation over the economic and development needs of Africa.
China, however, has a headstart over the West in more than one respect.