Navigating the Evolving Landscape between China and Africa’s Economic Engagements
IMF Working Papers, February 23, 2024
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- Navigating the Evolving Landscape between China and Africa’s Economic Engagements
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Bibliographic details
- Authors: Wenjie Chen, Michele Fornino, Henry Rawlings
- Published: February 23, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400267840.001
Overview and scope
- Authors: Wenjie Chen, Michele Fornino, Henry Rawlings
- Publication date: February 23, 2024
- Series: IMF Working Papers, Working Paper No. 2024/037
- Pages: 34
- DOI: https://doi.org/10.5089/9798400267840.001
- ISBN: 9798400267840
- ISSN: 1018-5941
- Subject areas: Balance of payments; Exports; External debt; Financial institutions; Foreign aid; Foreign direct investment; International trade; Loans
Evolution of China–Africa economic ties
- China and Africa forged a strong economic relationship beginning with China’s accession to the WTO in 2001.
- The paper examines the evolution of these ties starting in the early 2000s.
Major structural shifts identified
- The relationship experienced a significant shift triggered by:
- the commodity price collapse in 2015
- the COVID-19 pandemic
- These shocks altered trade, investment, and financing patterns between China and African countries.
Analysis of a potential further slowdown in Chinese growth
- The paper analyzes potential effects on the African continent from a further slowdown in Chinese growth.
- Findings emphasize heterogeneous impacts across African countries:
- Countries heavily dependent on their economic relationship with China face larger adverse effects.
- Variation in exposure arises from differences in export composition, foreign direct investment linkages, lending relationships, and external debt profiles.
Policy discussion and adaptation options
- The conclusion discusses ways African countries and China could adapt to the changing relationship.
- Policy themes include:
- Diversifying trade and investment partners and export baskets.
- Strengthening domestic institutions and debt management frameworks.
- Reorienting investment toward productivity-enhancing projects.
- Enhancing regional integration to reduce vulnerability to bilateral shocks.
Keywords and models cited
- Keywords: A. AFRMOD, Africa, AFRMOD model, Belt and Road Initiative., C. Investment linkage, Caribbean, China, Debt, economic engagement, Exports, Foreign direct investment, Global, growth slowdown, Investment, Lending, Loans, South America, sub-Saharan Africa, Trade
IMF Working Paper No. 2024/037; Wenjie Chen, Michele Fornino, Henry Rawlings; February 23, 2024.
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