A Path to Mutual Prosperity? The Trade and Investment between China and Africa

Xiao Ye, The World Bank

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The explosion of commerce activities between China and Africa has drawn fierce international debates on the implication of such dazzling changes, ranging from that China is repeating the colonialism of exploring Africa’s rich natural resources to that China-Africa commerce is providing Africa with much needed capital and suitable technology for African development. By comparing the trade patterns between China and Africa with those between China and the other countries, the paper concludes that the China’s trade and investment relationship with Africa is clearly determined by the comparative advantages in the context of globalization, as is China’s commerce relationship with Brazil, Canada and Russia. The question is how Africa can benefit more from its association with China by capturing its vast market for value-added commodities. Since China endeavors to move up the value chain in the international market, it would be a win-win relationship for China to facilitate Africa’s quest for industrialization that will benefit majority population in Africa. Africa, however, must play a dominant role in insisting its rightful share in its trade and investment relationships with China and other emerging economies, as well as with the developed countries.