How does China’s Manufacturing impact Africa’s economy

With the ongoing trend in export of various manufacturing units from different industries, Asian countries, one of the top rankers being China, have shown tremendous amount of growth over the past 30 to 50 years. The only country lacking behind in this respect and has depicted a somewhat stagnant behaviour is Africa. With Africa the main concern has always been the manufacturing and packaging industry unable to fulfil the policy requirements and thus minimal export and hence effect on the overall GDP of the country.
Africa is amongst the League of Nations which is rich in natural-resources, however due to unavailability of linkages into unskilled labour and its easy going nature for rent-seeking activities, Africa could not achieve much growth.
The manufacturing goods leaving the country in the form of export orders are basically limited to textiles and clothing. The natural resources like mineral fuel or precious minerals have not been projected in the right manner and are usually exported in raw form (approximately 90%) to the US.
The marketing policies exhibited by China and other emerging Asian countries are basically its sensible price signals, operating trade and exchange rate policies. These policies are aimed at favouring exports over imports, at least during the initial stages. The result is generation of outstanding revenues and thus growth of the nation as a whole.
China and Africa share a relationship in context of the raw materials exported by Africa to China and China’s indulgence on Africa for its raw material exports, its keenness towards substantial investments in Africa and due to Africa’s overall subtle appearance on the global platform, China can rely on Africa for exports of low-cost investment and consumer goods. But these marketing policies have left an overall adverse impression on the African subcontinent, deteriorating its industrial base and increasing the poverty ratio.
China, which is emerging as a strong global market, is trying to juxtapose the overall performance of Africa and thus, help it achieve a stronghold on a global scale. As discussed earlier, that Africa has a pool of oil and mineral resources, but instead of using these resources for a strong export base, this country thrives for a group of semi-skilled or unskilled labours to other countries.
Key industries that can be put to use to achieve global standards, Africa should:

  1. Indulge in land-development activities as it has abundant land. They can practice the path taken by the United States in retrospect and apply the measure taken by the US in this respect.
  2. Emphasise on raising exports, especially the export of the products from its abundant natural resources.
  3. Tackle the increasing corruption grasping the entire nation, and strategize policies to bring stability in the more volatile resource dependent African-economies.

According to the data available from various resources, textiles and clothing contribute to only 2% of exports to the US. Other major products include transport-related goods (1.7%), base metals (1.5%), chemicals (1.3%), prepared foods (0.9%) and machinery and electronic equipment (0.6%).
China’s role in Africa’s economic performance
Chinese export expansion has benefitted African firms and consumers by cost-effectiveness of manufactured goods and the availability of manufacturers.  Due to the strong relationship building between these two nations on the economic front, Africa has benefitted from the inflow of Chinese aid, financing and investment along with trade flows.
 

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