Africa’s Rising Exposure to China: How Large Are Spillovers Through Trade?

Author/Editor: Paulo Drummond ; Estelle X. Liu
Publication Date: December 17, 2013
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: The rapid growth in China’s domestic investment in recent decades has generated a large appetite for global goods, including from sub-Saharan Africa (SSA). This paper estimates the impact of changes in China’s investment growth on SSA’s exports. Although rising trading links with China have allowed African countries to diversify their export base across countries, away from advanced economies, they have also led SSA countries to become more susceptible to spillovers from China. Based on panel data analysis, a 1 percentage point increase (decline) in China’s domestic investment growth is associated with an average 0.6 percentage point increase (decline) in SSA countries’ export growth. This impact is larger for resource-rich countries, especially oil exporters. These effects could be mitigated, however, to the extent that countries can reorient their exports.
Series: Working Paper No. 13/250

Publication Date: December 17, 2013
ISBN/ISSN: 9781484311318/2227-8885 Format: Paper
Stock No: WPIEA2013250 Pages: 24
US$18.00 (Academic Rate:
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