14 Mar 2016
Trade between China and Sub Saharan Africa (SSA) has increased by an average of 30% per year since 2003. Photo: UNDP China.
China’s economy is slowing down. High economic growth rates averaged 10% between 2004 and 2014. But in 2015, growth declined to 6.9%, the lowest in 25 years. The 3,000 member National People’s Congress (NPC), in its 13th Five-Year Plan, just announced that growth will range between 6.5 and 7% in 2016. China’s slowdown is having unpleasant repercussions for African economies, particularly to the commodity-exporting ones.
Trade between China and Sub Saharan Africa (SSA) has increased by an average of 30% per year since 2003. China is now the single largest trading partner, importing 86% of the region’s metals, ores, oil and gas.
The slowdown in China means demand for African’s commodities will decline. China is structurally changing its economy. The plan is to shift from an export-oriented and public investment-driven economy to a domestic demand-driven, modern manufacturing and service-oriented one. China is also cutting back on the excess capacity built around steel making and coal production. According to the Xinhua News Agency, China “entered what policymakers refer to as the “new normal”, a phase of moderating growth based more on consumption than the previous mainstay of exports.”
The impact of China’s shift on Africa is already evident. One example is Zambia. …