How much did the global commodity downturn effect China’s economic relations with India? The first China Africa Economic Bulletin of Johns Hopkins University’s School for Advanced International Studies has attempted to calculate the impact.
The first shock was an enormous drop in Chinese imports from Africa. Between 2014 and 2015, Chinese imports dropped 42%, from $ 79.8 billion to $46.1 billion. The primary cause was the dramatic fall in the price of oil, China’s largest import from Africa. Mineral ore imports also halved in value terms. Damagingly for Africa, Chinese exports to Africa remained largely stable though the growth rate from 2014 to 2015 was only 2.8%, far below the average 24.2% annual growth such imports saw between 2002 and 2015.
As would be expected, the commodity slump was also mirrored in a drop in Chinese FDI flows into Africa. They fell in 2015 to $3 billion, down from a high of $ 3.4 billion in 2013. The slowdown in China’s own economy may also have been a contributory factor. Nonetheless, that FDI figures did not fall as sharply as trade figures did is an indication of the increasing diversity of Chinese investment into Africa.
A third impact was in the total numbers of Chinese workers in Africa which largely remained unchanged between 2014 and 2015. The study estimated Chinese workers in Africa totaled 263,508 in 2015 as compared to 187,400 in 2009. These figures represented government and large corporate labour contracts and did not include the movement of individual Chinese traders. Just over half these workers are in Algeria and Angola alone.
Finally, the study showed that Chinese loans, combining government and commercial sources, in 2015 totaled $11.8 billion. This was a $ 1.7 billion decrease from the previous year and the second year in a row the figure had fallen. A drop-in investment into commodities and an inability of African players to raise Chinese loans – many use their resource holdings as collateral for such loans – was blamed for this development.
December 30, 2017