Research On China-Africa's Emerging Trade And Economic Relations

Under the new situation in the world economy to globalization, international politics multipolar development, Africa has drawn increasing concern around the world. African lands and agricultural resources, rich underground of mineral resources, unique cultural and tourism resources are the development of economic and trade potential markets. Commodity sales market, raw materials and favorable investment location are playing an important strategic position in Africa. In the international political relations, African countries have also a significant political force.Relationships between China and Africa were formally established in the1950s but trade and cooperation dates back over100years. Recently, as China's economy has continued to grow and transform the country into a major global player in all spheres, it has become clear that China increasingly needs to secure reliable sources of resources to support its economic development. The establishment of the People's Republic of China has opened up a new era of Sino-African economic and trade relation. In order to develop the Sino-African cooperation more deeply in21st century, China and Africa create a new form of cooperation the Forum on China-Africa Cooperation. The FOCAC Summit witnessed the birth of the establishment of a new type of strategic partnership between China and Africa featuring political equality and mutual trust, economic win-win cooperation and cultural exchanges.Africa is important to China as a vast source of resources to feed its growing manufacturing base, as well as a source of energy security. In addition, China sees Africa as an important destination for its affordable manufactured goods. China's interests in Africa, however, are not only confined to economics, but extend to diplomacy as well. China is attempting to position itself as an important power in the international system and, in so doing, promote its own views and policies within international multilateral organisations. With a history of external exploitation, not quite successful economic experimentation and more recent rapid market-based development, China is in a unique position to understand the challenges and complexities facing Africa. In doing business in Africa and establishing a development framework, one is confronted with many options. It is therefore contended that China's presence on the African continent presents both opportunities as well as threats, although African governments need to be pro-active in order to exploit the potential opportunities. In this context, Sino-African cooperation is seen as an important element of a strategy to address the challenges and emerging threats facing the region. It also provides an opportunity for African countries to induce technological change, transform the structure of their economies and lay the foundation for high and sustained growth.Against this background, this paper examines some key questions which are:How African countries are to make the most of the possibilities and address the challenges which China brings for poverty reduction and development at large? How the region could make better use of the bilateral cooperation to further its long-run development objectives? Do the trade strategies of the EU and the US compare favorably to those of China in Africa? To what extent is China in Africa following a different approach than Europe and the US? However, we mostly concentrate on the northernmost region of the African continent. Nevertheless, the implications of the financial crisis on China-Africa cooperation are excluded from our scope of research.The full text is divided into six chapters and is organized as follows:The introductory chapter outlines the research question and the research methodology.The second chapter presents the main theories of international trade where Africa's cooperation with China is involved.The third chapter bases on the economic and commercial development of Africa's cooperation with China, reviewing the historical background of Sino-African relations as well as the latest development; and analyzing the principles and main characteristics of the partnership.The fourth chapter highlights the evolution of China's engagement in Africa through aid flows, investment and trade strategies. China's trade with Africa is expanding swiftly. It has increased ten times in the last ten years. China's traditional exports to Africa (like textiles, clothing and furniture) keep increasing, while electrical home appliances, cell phones, motor vehicles and other electronic and high-tech products have begun to pick up. China is rapidly becoming the main trading partner of Africa (exports plus imports), bypassing the US, and the EU. First, it provides a historical overview and comparative perspective of Sino-African aid assistance, investments (FDI) and trade relationships focusing on the North African region. Noting that the bilateral trade grows rapidly, the structure unceasingly optimizes from the general trade to mutual union way such as foreign investment, contract project, official development assistance, zero-interest loans and concessional loans for poor African countries. Then, it will find out to what extent China's trade strategy is different from the trade strategies of the European Union or the United States with respect to assuring trade advantages to Africa.The fifth chapter discusses the implications of China's engagement in Africa for the African continent (underlining its presence in the North African region), the United States and the European Union. Beyond the quantitative impact of growing aid, finance, trade and investment flows, this engagement have significant qualitative impacts on African development, positive and negative. The chapter approaches these debates using as much as possible a quantified framework, in an attempt to go beyond the common wisdom. The issues addressed include aid effectiveness, trade creation as:the economical and political risk in Africa, the unbalance of Sino-African trade, not real transfer of wealth, technology or skills to African countries.Finally, the last chapter presents the main policy recommendations/future prospects for consideration by the Sino-African cooperation, China and African countries for the development in the region.