Presentation to SARPN Dr Martyn J. Davies Director, Centre for Chinese Studies, CEO, Emerging Market Focus, Senior Lecturer, Gordon Institute of Business Science 29 th March 2006 “China’s Growth: Implications for Poverty Reduction in SADC”

Centre for Chinese Studies Some questions to ponder this afternoon: How will China’s growth impact us? What are China’s motivations in Africa? Can Africa compete commercially? What drives development? Is Africa’s approach to development flawed? What is China’s economic destination? What if China ran Africa?

Centre for Chinese Studies “I see growing on the horizon the greater peril than Germany or Japan ever were…our terrible enemy, America” Enoch Powell ( ), British MP

Centre for Chinese Studies China’s Impact on the Global Economy Shift of manufacturing Consumer market Commodity “super cycle” Emerging multinationals China and the global value chain Intense competition Marginalization of SEMs

Centre for Chinese Studies “Is Africa a continent that shuns rather than embraces foreign competition?

Centre for Chinese Studies China’s Emerging Multinationals

Centre for Chinese Studies But Chinese SOE firms are largely non-collaborative in nature. Why? A.Politically determined business models B.Do they seek profit? C.A mercantilist approach to business

Centre for Chinese Studies China’s Growth Trajectory Source:

Centre for Chinese Studies Questioning the WBM…. A new model for development Q. What if the Chinese ran Malawi? Q. The role of the state as a driver of development? Q. Reaganism vs Dengism

China’s “Marketized” Economy Free Market  Open to foreign investment  Full competition  Limited state involvement Government controlled Closed to foreign investment Limited/no competition High state involvement Real estate Light industrial manufacturing Consumer electronics Electronics, telecom equipment Apparel, textiles Wholesale/retail trade, catering services Automotive Radio, film, TV Finance, insurance Government agencies Postal, telecom services 15% 5% 3% Size of circle indicates sector’s contribution to GDP

Africa’s knowledge bridge to China