World Bank study spells out the up and down-side of Chinese onslaught

ALAN PEAT
THE PRESENCE of the Asian giants of China and India in Africa holds great potential for growth and job creation on the continent, according to a new study by the World Bank. According to the study, the interests of these two countries in sub-Saharan Africa extend well beyond the hunt for natural resources. Asia now receives 27% of Africa’s total exports, triple what they were in 1990 and almost on par with Africa’s exports to the US and European Union (EU) – which have always been the continent’s traditional trading partners, reports ANDnetwork. Also, according to the study, Asian exports to Africa are growing at 18% a year – faster than to any other region in the world. And, although the growth in China and India’s foreign direct investments (FDIs) in Africa is more modest than that of the trade flows, they are also growing very rapidly. The contrary side of this happy news is, however, the fact that both these Asian traders often stand accused of “dumping” in Africa – with “cheap Chinese exports” being responsible for the collapse of much of the textile and clothing industry in the sub region, for example, and the accompanying major job losses. It has become a political hot potato, according to journalist, Mabutho Ngcobo, who quoted Michael Sata, one of the leading contestants in the next presidential election in Zambia, as saying he would expel Chinese investors should he win the election. And it’s a problem not only for the less economically developed nations in Southern Africa, but also has a serious impact on SA, the subcontinent’s recognised powerhouse. It is also being hit by rapidly growing Chinese imports and, for example, the retrenchment of tens of thousands in the textile industry because it is unable to compete effectively.