In the next future, two phenomena are expected in China’s economy. First, it is a slowdown in growth; second, a shift from investments and exports towards innovation and consumption. This will spread worldwide consequences, but especially over the economies of countries in Sub-Saharan Africa.
After WTO accession in 2001, China became Sub-Saharan Africa’s largest trading partner in 2009 gaining access to growing markets for Chinese goods and services, raw materials and energy, as well as political support from African countries in international affairs. While, Africa benefits from China’s financial and technical assistance in infrastructure investments, technology and knowledge transfer contributing to implement development and industrialization projects.
A recent World Bank Group study set out the potential effects of this economic changing. They would lead to an overall positive impact on the global economy, as well as on Sub-Saharan Africa. It is expected that the world and Sub-Saharan Africa both stand to gain 4.8% and 4.7%, respectively, in GDP by 2030. Indeed, it will likely have a positive impact on poverty levels in Sub-Saharan Africa. Specifically, poverty is expected to decrease by approximately 4 million people, and the levels of extreme poverty are expected to decrease by half.
The research, however, suggests that should China’s economic changing only include a growth slowdown and no a rebalancing between investments/exports and innovation/consumption, there would be small losses in GDP for both the world and Sub-Saharan African countries. Rebalancing in China is expected to boost consumption as well as demand for imported products and services.
The gLAWcal Team
Wednesday, 16 September 2016
(Source: The World Bank Forum)
This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.