The Future of African Trade with China under Alternative Trade Liberalization Schemes

Abstract

Abstract: Evidence is gradually being built up in Africa on the full extent and rapidly growing role and interest of China in Africa. The global trade integration under the Doha Round, which is considered as the channel for fostering outward‐oriented development and generates economic and social benefits, is expected to effect more African trade with China. Our results show that with an agreement for the Doha Round, China will achieve its dominance on global trade faster than in the baseline scenario where no agreement is expected to be signed. In the long term, this impressive growth in Chinese exports to Africa is not a real value added, as China is already taking the place of the other major trade players both in African markets as well as in the markets of other regions and countries. In other words, China is expected to achieve in 10 years (2010–2020) what initially was expected to be achieved in 20 years in case of no agreement under the Doha Round, where a simple linear estimation on the evolution of Chinese exports is carried out. Our results also show that even in the case where China will offer more market access for African countries, the situation will not improve much for most of them. The reason is that Africa is still suffering from small productive capacities and a low level of diversification of its economy.