That China is having an impact on Sub Saharan Africa (SSA) is very clear. What is not clear is the precise nature of that impact. Does it come mainly from trade in cheap manufactured goods? Does it come from China's seemingly insatiable hunger for oil and minerals? What role do Chinese companies operating in Africa play? How beneficial is Chinese aid and/or international cooperation?
Existing literature gives a fair amount of information about the magnitude and effects of trade between China and SSA. It tells us, for example, that trade between China and SSA has increased rapidly, especially since 2001. Available databases can be mined to tell us what is traded and by whom. The literature, however, is less clear about how that trade actually affects Africa. What countries benefit and in what sectors? Who is losing out, and why? It is also clear that trade is not the only form of interaction between China and Africa, and that other interactions may also generate positive or negative impacts. Of the many possibilities, we have identified foreign direct investment, production, and aid as potential channels of impact.
Unfortunately, we know even less about how these affect Africa than we do about the effects of trade. In the following pages, we attempt first to take stock of our knowledge. We do by subjecting the most common forms of interaction between China and SSA to a comprehensive and detailed analysis using a systematic framework. We then use this analysis to identify the gaps in our knowledge and suggest ways of bridging them. The paper uses secondary data from a number of sources, including the International Monetary Fund, the World Bank, the US Department of Commerce, as well as published materials and relevant websites.
The paper is written in five parts. Part 2 presents a framework for analyzing the impact of China on SSA. Part 3 uses available information to examine each of the main channels of impact. Part 4 raises a number of issues arising from this analysis, focusing particularly on the manufacturing sector. Part 5 presents our conclusions.
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