The Impact of Rising Chinese Trade and Development Assistance in West Africa
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World Bank, Washington, DC
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The rapid economic rise of China over
the last twenty years has sustained high global demand and
prices for primary commodities such as oil and minerals,
greatly benefitting Sub-Saharan (SSA) African countries.
China now represents more than 20 percent of SSA's
trade, up from just 2.3 percent in 1985. West Africa's
share in China's trade is still quite low, 0.6 percent
in 2012, but it is rising rapidly. Exports to China - oil,
iron, phosphates, gold, cotton, cocoa and cashew nuts, have
grown fast. However, they have not grown as rapidly as
imports, resulting in a large trade deficit with China (13
percent of West Africa's GDP over 2009-2012). Reasons
include a strong consumption demand for inexpensive Chinese
products as well as the import-content requirements in
development assistance agreements. Looking at the impact of
China on West Africa, it appears that West African producers
do not compete with China on third markets; by and large
their products are complementary. However, West African
producers are finding difficult to compete with China in
their own domestic as well as in regional markets. The
paper's main messages are as follows: Chinese demand
for primary commodities is likely to continue in the near
future, potentially benefitting West Africa. To maximize
these benefits, West African countries need to maintain
macroeconomic stability and to design appropriate policies
to manage the volatility of commodity prices while raising
the competitiveness of the economy. The current stagnation
of the agricultural and manufacturing sectors in many West
African countries is a sign of Dutch disease effects that
should not be underestimated and need to be readdressed; and
while the specific reforms needed vary from country to
country, they should be comprehensive enough to generate a
shift in the policy stance aimed at increasing productivity
and encouraging diversification in the tradable sector.
Examples of such reforms include the removal of trade
restrictions among West African countries, the dismantling
of formal and informal trade barriers to regional processing
activities and the improvement of trade logistics.
Palabras clave
AGRICULTURAL PRODUCTS, AGRICULTURE, AVERAGE TARIFF, BILATERAL TRADE, BUSINESS CLIMATE, BUSINESS ENVIRONMENT, CAPITAL ASSETS, CAPITAL GOODS, COMMODITIES, COMMODITY, COMMODITY PRICES, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGES, COMPARATIVE DISADVANTAGE, COMPETITIVENESS, CONNECTIVITY, CONSUMER DEMAND, CONSUMER GOODS, CONSUMERS, COUNTRY MARKETS, COUNTRY TO COUNTRY, CREDIT LINE, CREDIT LINES, DEVELOPING COUNTRIES, DEVELOPMENT ASSISTANCE, DEVELOPMENT BANK, DEVELOPMENT FINANCE, DEVELOPMENT POLICIES, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRODUCERS, DURABLE, DURABLE GOODS, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC RESEARCH, ECONOMIES OF SCALE, EQUIPMENT, EXPORT CREDITS, EXPORT DIVERSIFICATION, EXPORT GROWTH, EXPORT MARKET, EXPORT OPPORTUNITIES, EXPORT PRICE, EXPORT SECTORS, EXPORT SUPPLY, EXPORTERS, EXPORTS, EXPOSURE, FINAL GOODS, FINANCIAL FLOWS, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FOREIGN INVESTORS, FOREIGN MARKETS, GDP, GLOBAL ECONOMY, GLOBAL EXPORTS, GLOBAL MARKETS, GROSS DOMESTIC PRODUCT, GROWTH RATE, GROWTH RATES, HUMAN CAPITAL, IMPORT BANK, IMPORT MARKETS, IMPORT PRICE, IMPORT PRICES, IMPORT PRODUCTS, IMPORT TARIFFS, INFRASTRUCTURE PROJECTS, INTERMEDIATE INPUTS, INTERNATIONAL DEVELOPMENT, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, INTERNATIONAL TRADE STATISTICS, INVESTING, INVESTMENT OPPORTUNITIES, INVESTMENT STRATEGY, JOB CREATION, JOINT VENTURES, LEGAL SYSTEMS, LOAN, MACROECONOMIC GROWTH, MACROECONOMIC STABILITY, MARKET STRUCTURES, MONETARY FUND, NATURAL RESOURCE, NATURAL RESOURCES, NET EXPORTER, OIL IMPORTS, OUTPUT, OUTSOURCING, PORTFOLIO, PRICE FLUCTUATIONS, PRIVATE INVESTMENT, PRODUCTIVITY GROWTH, RAPID ECONOMIC GROWTH, RAPID EXPANSION, REGIONAL INTEGRATION, REGIONAL TRADE, REGIONAL TRADE AGREEMENTS, SHARE OF WORLD TRADE, SPECIALIZATION, TARIFF RATES, TECHNICAL COOPERATION, TECHNOLOGY TRANSFER, TRADE BALANCE, TRADE BARRIERS, TRADE CLASSIFICATION, TRADE DATA, TRADE DEFICIT, TRADE DEFICITS, TRADE EXPANSION, TRADE FACILITATION, TRADE FLOWS, TRADE IMBALANCE, TRADE INTEGRATION, TRADE INTENSITY, TRADE LOGISTICS, TRADE POLICY, TRADE RELATIONS, TRADE RESTRICTIONS, TRADE SURPLUS, TRADING, TRADING BLOCS, TRANSACTION, TRANSACTION COSTS, TRANSFER OF TECHNOLOGY, TRANSPORT COSTS, VALUE OF TRADE, VOLATILITY, WORLD MARKETS, WORLD TRADE, WORLD TRADE ORGANIZATION