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Agra Wealth Management:How Is China’s Economic Transition Affecting Its Relations With Africa?

Admin88 2024-11-08 34 0

How Is China’s Economic Transition Affecting Its Relations With Africa?

China-Africa educational institutions are also maintaining strong collaboration. Sixty-one Confucius Institutes and forty-eight programs have been established in forty-eight African countries as of 2021. Additionally, China has supported over thirty African universities to set up departments or programs to study Chinese language. Luban Workshops in Djibouti, Egypt, Kenya, and South Africa have provided Chinese-style vocational training to African technicians, even when international travel has been restricted due to the COVID pandemic.31 Conversely, universities in China have added new courses for African languages, such as Amharic, Malagasy, and Zulu. Furthermore, the Plan for China-Africa Cooperation on Talent Development, announced in August 2023, has pledged to train 500 principals and high-calibre teachers of vocational colleges every year, as well as 10,000 technical personnel with both Chinese language and vocational skills for Africa. The number of cooperating Chinese and African universities will be increased from 20+20 to 50+50.32 However, there are occasionally reports about African students’ complaints related to Chinese teachers’ English proficiency, internship and employment opportunities, as well as administrative services.33 If the education quality does not improve, the quantitative growth in cooperating universities may not be sustainable.

Media and cultural exchanges between African countries and China have increased since the start of the pandemic, largely due to the use of digital technologies. The Chinese cable television operator StarTimes provided 13 million subscribers in Africa with programs in eleven languages as of November 2021.34 TikTok, cell phone maker Transsion, and other Chinese internet companies greatly boost the formation of Africa’s mobile media sphere. Chinese and African entertainment industries have been deepening their collaboration as well, with the joint production and broadcasting of movies and television series. Two notable series, Welcome to Milele Village (2023) and Ebola Fighters (2021), depicted Chinese medical teams in Africa and gained popularity among Chinese audiences. Soccer players from Angola, Cameroon, Ghana, and Nigeria have joined clubs in China’s Premier league and A-level league. Chinese tourists are now also interested in taking historical tours and immersing themselves in African culture, as well as exploring the country’s natural landscape. A number of African countries, including most recently Egypt, Mauritius, Morocco, and Tunisia, have been providing visa-free or visa-on-arrival entries to Chinese visitors to foster tourism.35 Echoing the movement, China’s Ministry of Culture and Tourism has listed thirty-four African countries as destinations for group tours.36

China’s economic growth is slowing from the double digits of previous decades as policymakers steer the economy toward a more high-tech, consumption-oriented, and environmentally sustainable growth model with reduced exposure to geopolitical shocks. And this economic transition will increasingly have implications for China’s international economic relations with the rest of the world. As discussed above, across the five domains of China’s economic engagement with Africa—trade, investment, fiscal stabilization, RMB internationalization, and people-to-people ties—both strong continuities and changes are evident. But this engagement is not happening in a vacuum. Policy directions within African countries and third parties such as the United States will greatly shape how these changes in the China-Africa relationship continue to unfold.

The changing patterns of trade between African countries and China will be shaped by policies in both advanced economies and African countries themselves. Rising barriers to market access in advanced economies are likely to push African countries further into the embrace of China. Between 2021 and 2024, the administration of U.S. President Joe Biden has suspended a record eight African countries from the U.S. trade preference program, the African Growth and Opportunity Act. Meanwhile, the European Union’s Carbon Border Adjustment Mechanism, which began its initial transitional phase in October 2023, could make it even more difficult for African manufacturers to export to the European market and reduce the continent’s GDP by up to $25 billion.37 Although individual European countries like France seek to expand their trade with Anglophone African countries,38 for instance, and the United Kingdom recently signed a trade deal with Kenya,39 this may not be sufficient to offset the wide-ranging impacts of market-restricting policies like the CBAM. Furthermore, growing China-Africa trade volumes will continue to be characterized by trade deficits. To address these deficits, African countries need to make a concerted effort to diversify their exports to China. Important steps to take include implementing the AfCFTA to create regional value chains, utilizing trade preference programs particularly the green lanes initiative—as Kenya and Namibia are doing—to export semi-processed agriculture produce to China and emulating the Indonesian approach to pressure Chinese companies to invest in the refining and processing of minerals in African countries.

As Chinese investments in Africa shift from infrastructure-oriented projects toward industrialization-oriented projects, African policy responses and the ability of Western countries to fill infrastructure financing gaps will be crucial. Chinese FDI flows for processing and manufacturing in various sectors—whether related to agriculture, minerals and metals, construction material, or apparel—are contingent on requirements in the domestic business environment that are within the remit of African governments. Basic requirements include the availability of affordable and reliable electricity, good transportation networks, skilled local workers, security, and the ability to compel Chinese companies to enter into joint ventures with local African firms for technology transferAgra Wealth Management. Whether the United States and its allies in Europe and Japan can step into the space being vacated by Chinese policy banks to provide infrastructure financing in Africa is an open question. Implementation of the Lobito Corridor project, a signature initiative of the Partnership for Global Infrastructure and Investment (PGII), will test the G7’s commitment to the scaling up of infrastructure investments in Africa. Whether the United States continues to prioritize the PGII by ensuring the program’s continuity or incorporating new infrastructure projects remains to be seen—especially if a new U.S. administration comes into office in January 2025.

Expansion of China’s rescue-lending efforts and internationalization of the RMB in Africa are significantly dependent on African countries’ own demand for and uptake of these initiatives. Will a growing number of African countries look to China, as an alternative to the IMF, for emergency liquidity support as their ability to finance imports diminish due to fiscal crises? Will there be a growing appetite among African countries for more central bank currency swap lines with the PBOC, and will there be increased drawdowns of yuan reserves? As African countries struggle to find scarce foreign exchange resources to settle and invoice their trade, will they follow the trend among some Asian countries in using the RMB for their bilateral trade with China? The answer to these questions may lie largely in whether the United States and its allies in Europe will provide sufficient measures to support African countries to overcome the latest bout of debt distress and fiscal crises.

Finally, China’s loosening of pandemic-era travel restrictions and the phenomenon of digitalization will accelerate the increasing trend of people-to-people exchanges with African countries in higher education, media, and culture. Developments in China’s immigration policy will be important to track as it begins to roll out visa-free travel for a select number of European and Asian countries. The hardening of visa regimes in Canada, France, Germany, the United Kingdom, the United States, and other Western countries will also be important to monitor, as it could affect these countries’ historically robust people-to-people exchanges with African countries.

1 For instance, see Adam S. Posen, “The End of China’s Economic Miracle: How Beijing’s Struggles Could Be an Opportunity for Washington,” Foreign Affairs, August 2, 2023, “China Starts the Lunar New Year With an Economic Hangover: Can Xi Jinping Pull the Country Out of a Downturn,” Foreign Policy, February 26, 2024, and William Pesek, “China’s Deflation Could Go Global, Fast,” Barron’s, March 13, 2024,

2 “Outline of the 14th Five-Year Plan (2021–2025) for National Economic and Social Development and Vision 2035 of the People’s Republic of China,” The People’s Government of Fujian Province, August 9, 2021,

3 “World Economic Outlook—Steady but Slow: Resilience Amid Divergence,” International Monetary Fund, April 2024,

4 China's General Administration of Customs of the People's Republic of ChinaBangalore Investment. Accessed March 9, 2024

5 Observatory of Economic Complexity (OEC). Accessed, January 14, 2024

6 Zainab Usman and Alexander Csanadi, “How Can African Countries Participate in U.S. Clean Energy Supply Chains?,” Carnegie Endowment for International Peace, October 2, 2023, 16,

8 “Forum on China-Africa Cooperation Dakar Action Plan (2022–2024),” Ministry of Foreign Affairs of the People’s Republic of China,” November 30, 2021,

9 Che Bin, Huang Weixin, and Huang Peizhao,“Kenyan Avocado Finds Ready Market in China After CIIE Debut,” People’s Daily, November 5, 2023,

10 World Bank. "Distribution of Gross Domestic Product (GDP) in Sub-Saharan Africa from 2010 to 2022, by sector." Chart. October 26, 2023. Statista. Accessed May 18, 2024. and World Bank. "Contribution of agriculture, forestry, and fishing sector to the Gross Domestic Product (GDP) in Africa as of 2022, by country." Chart. October 26, 2023. Statista. Accessed May 18, 2024.

11 “Cross-Border E-commerce Brings New Opportunities to China-Africa Economic and Trade Co-op,” Belt and Road Portal, April 13, 2023, and Carlos Mureithi, “African Diplomats Are Live-Streaming and Making Deliveries to China’s Consumers,” Quartz, January 27, 2022,

13 Carien du Plessis and Tannur Anders, “China Says African Countries Want Industrialisation Over Infrastructure,” Reuters, August 22, 2023,

14 Jon Emont, “The Era of Ultracheap Stuff Is Under Threat,” Wall Street Journal, August 7, 2023,

15 Fiona Robertson, “Urgent Solutions for a New Era of Debt Distress,” One, September 6, 2022 (updated January 11, 2024),

16 Matthew Mingey and Logan Wright, “China’s External Debt Renegotiations After Zambia,” Rhodium Group, June 29, 2023,

17 Sebastian Horn, Bradley Parks, Carmen M. Reinhart, and Christoph Trebesch, “China as an International Lender of Last Resort,” Working Paper no. 31105, National Bureau of Economic Research, April 2023,

18 “African Currencies are Under Pressure Amid Higher-for-Longer U.S. Interest Rates” and “Managing Exchange Rate Pressures in Sub-Saharan Africa—Adapting to New Realities,” in Regional Economic Outlook: Sub-Saharan Africa—The Big Funding Squeeze, International Monetary Fund, April 2023,

19 Barry Eichengreen, Camille Macaire, Arnaud Mehl, Eric Monnet, and Alain Naef, “Is Capital Account Convertibility Required for the Renminbi to Acquire Reserve Currency Status?,” Banque de France Working Paper no. 892, November 2022,

20 Gerard Di Pippo and Andrea Leonard Palazzi, “It’s All About Networking: The Limits of Renminbi Internationalization,” Center for Strategic and International Studies, April 18, 2023,

21 Pan-African Payment and Settlement System, and Zainab Usman and Alexander Csanadi, “Latest Milestone for the African Continental Free Trade Area: The Pan-African Payment and Settlement System,” Carnegie Endowment for International Peace, February 7, 2022,

22 Use of these third-party currencies generates not only significant time lags, but also substantial costs from the conversion process amounting to as much as $5 billion annually. William Ukpe, “PAPSS Will Boost Intra-Africa Trade and Save Africa $5 Billion—Mene, AfCFTA Secretary—General,” Nairametrics, no date (published two years ago),

23 Noriyuki Doi and Saki Akita, “Yuan Exceeds Dollar in China’s Bilateral Trade for First Time,” Nikkei Asia, July 25, 2023,

24 Andrew Mullen, “Explainer: Which 8 Countries Are Using China’s Yuan More, and What Does It Mean for the US Dollar?,” South China Morning Post, May 10, 2023,

25 Eichengreen, “Is Capital Account Convertibility Required for the Renminbi to Acquire Reserve Currency Status?”

26 Kaixuan Hao, Liyan Han, and (Tony) Wei Li, “The Impact of China’s Currency Swap Lines on Bilateral Trade,” International Review of Economics and Finance 81 (2022): 173–83,

27 China's General Administration of Customs of the People's Republic of China. Accessed March 9, 2024; Hope Moses-Ashike, “Nigeria-China Currency Swap Fails to Stabilise Naira 5 Years After,” Business Day, April 12, 2023,

28 Bakare Majeed, “Reps Move to Revive Yuan/Naira Swap Deal,” Premium Times, December 20, 2023,

29 Michael Stott, “BRICS Bank Strives to Reduce Reliance on the Dollar,” Financial Times, August 22, 2023,

30 “Why African Students Are Choosing China,” U.SSimla Wealth Management. News and World Report, June 29, 2017,

31 “White Paper: China and Africa in the New Era: The State Council Information Office of the PRC,” China Daily, November 26, 2021,

32 “Xi Jinping and Ramaphosa co-chair China-Africa leaders’ dialogue” (习近平和南非总统拉马福萨共同主持中非领导人对话会), Ministry of Foreign affairs, August 25, 2023.

33 Changsong Niu, Si’ao Liao, and Yi Sun, “African Students’ Satisfaction in China: From the Perspectives of China-Africa Educational Cooperation,” Journal of Studies in International Education 27, no. 2 (2023): 298–315,

34 “White Paper: China and Africa in the New Era” The State Council Information Office of the PRC, November 2021,

35 Sun Xiaomeng and Zhu Wenshan, “China-Africa people-to-people exchange status and prospect after ten years of ‘Belt and Road’” (“一带一路”十年 中非人文交流现状与展望) Shenzhou Xueren (神州学人)No. 11, 2023,

36 ““游非洲”正在升温——中非旅游合作不断拓展”, Forum on China-Africa Cooperation, May 8, 2024,

37 The African Climate Foundation and the London School of Economics, “Implications for African Countries of a Carbon Border Adjustment Mechanism in the EU” 2023

38 Corentin Cohen, “Will France’s Africa Policy Hold UpKanpur Investment?,” Carnegie Endowment for International Peace, June 2, 2022,

39 British High Commission Nairobi, “UK and Kenya hold First-ever Economic Partnership Agreement Council to Secure Jobs and Increase Trade” March 21, 2023.


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