Asia in Africa: The Future of Economic Development

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Economic Growth in Africa approximately 7% approximately 7% Level UN estimates needed to reduce poverty Proportion of people in absolute poverty % 2007 – 50% Seven of the top ten fastest growing in 2009?

China in Africa Chinese trade with Africa grew 45.1% in 2008 US $107bn ResourcesMarkets Tied aid “No strings attached” “All weather friend”

China’s Interest Energy-intensive growth US Navy “choke space” “Locking up barrels at source” World’s largest consumer of copper One third of global steel output, 40% of cement and 26% of the world’s copper

China’s trade with developing countries grew 88% faster than its trade with developed ones from 1999 to 2003 Manufactured goods for the developed world “Triangulation effect” Food supplies – farms in Zambia Daewoo Logistics 99-year lease on 3.2 million acres of land, half the size of Belgium, to grow maize and biofuels

“The South African’s brag that if you driver a Hummer, you’re driving a car made in Africa. Ditto if you drive a BMW with the steering wheel on the right-hand side. The next time you fly on a Boeing aircraft, look out the window and you’ll see engines with parts made in South Africa. But that country isn’t alone. I’ve seen factories in Lesotho that produce Gap and Old Navy clothing, car parts manufactured in Botswana and call centres in Kenya and Uganda” – Carol Pineau

Drivers of Growth “Big 5” – Angola, DRC, Kenya, Nigeria and South Africa NEKS (Nigeria, Egypt, Kenya, South Africa)

African Resources 3/4s of Africa’s exports 42% of the world’s bauxite; 38% of its uranium; 42% of gold; 73% of its platinum; 88% of diamonds 10% of oil Supplies 19% of US oil 31% of China’s China “locked out” of Middle East?

Issues Price volatility Where are resource rents going? Lack of transparency Use of Chinese labour 70% of loans in Angola for Chinese companies “Textile tsunami” Sustainability

Possibilities Untied debt relief Technical assistance Tax incentives for Chinese investors “Network trade” – pharmaceuticals etc Special economic zones