changing china, changing africa: future contours of an emerging relationship peter draper south...
TRANSCRIPT
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CHANGING CHINA, CHANGING AFRICA:
FUTURE CONTOURS OF AN EMERGING RELATIONSHIP
Peter Draper
South African Institute of International Affairs (presenter)
Martyn Davies and Hannah Edinger
Frontier Advisory
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OVERVIEW• Background• China in Africa: Current Frame• China’s Economic Rebalancing – Implications for Africa• Broader Considerations
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Background• Moving beyond the current frame• Key driver: Chinese economic rebalancing
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China in Africa: Current Frame• Politics/security
• FOCAC• Conflict zones and human rights• Non-interference
• Economics• State capitalism (SOEs; policy banks; ODA)• Resources• Trade structure
NB: ‘Deindustrialization’ concerns
• SEZs and their development impacts
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China in Africa: Current Frame• Social
• Corporate social responsibility• Labour practices• Environmental impacts
• Culture• Formal engagements (eg Confucius institutes)• Informal/community (eg Chinese traders)
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China’s Economic Rebalancing – Implications for Africa
• Chinese drivers• Increased domestic cost structure• Concerns over resource-intensive manufacturing• Major problems in the financial sector• Emphasis on new sectors (services)• Domestic competition
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China’s Economic Rebalancing – Implications for Africa
• Implications for Africa• Increased outward FDI from China• Changing composition of OFDI towards middle-sized private firms• Role of SOEs will probably decline, relatively• Therefore less emphasis on resource acquisition, relatively• And relatively declining emphasis on role of policy banks/finance
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China’s Economic Rebalancing – Implications for Africa
• Is Africa the ‘final frontier’ for export-oriented manufacturing FDI?
• Will take time, perhaps a long time• Enduring Chinese advantages• Broader Asian advantages• African challenges
• But consider the ‘flying geese’ paradigm• In relation to some emerging African advantages,
particularly demographic
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African Population growth dynamics
9
Rapid growth and urbanization, mostly from low bases, holds out the ‘middle class’ proposition
Mostly a west and east African phenomenon
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China’s Economic Rebalancing – Implications for Africa
• The most likely to benefit are those that:• Grasp the governance reform nettle• Are favoured by geography and resource endowments• Welcome FDI by MNCs
• Chinese SEZs could be a key policy tool to faciitate this process
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Broader Considerations• Smarter Chinese diplomacy towards Africa will be
required to service diversified footprints• Commercial (project oriented):
• targeting new sectors• working more with the Chinese private sector
• Economic (rules of the game):• Greater emphasis on good governance in order to secure Chinese
commercial interests• Promoting trade liberalization• Securing investments through BITs
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Broader Considerations• Politics, society and culture
• Policy of non-interference could become increasingly strained• Increasing contact with emerging African middle classes will
require greater attention to human rights agendas, corporate social responsibility, labour rights, and the environment