Abstract
Over the last two decades, the trade between Africa and China has grown significantly but there is still a debate on how local industries in Africa are being affected. Two key foreign policies, FOCAC and BRI, by China are the foundations on which the trade is done with its African partners. This study aims to assess which industries in Africa are being affected by these Chinese-led foreign trade policies and the significance of that impact. Using panel data, the study examines the effect of the FOCAC era and the FOCAC+BRI era on the energy, agriculture, mining, manufacturing, and technology industries for six partners. The results from the analysis showed that imports positively affect the agriculture and the energy sectors while the manufacturing industry is negatively affected by imported goods. On the other hand, exports have shown a positive impact on the mining sector. However, the agriculture industry is still struggling to have positive gains from exports. The findings of this study are important as the continent works towards "One Africa" which seeks to promote sustainable development of the continent. Also, the study focuses on specific industries that are significant to the economic growth of these countries as shown by their positive relationship with the GDP of these nations.
Highlights
1.1 BackgroundOver the last two decades, there has been a surge in the quantities of "Made in China" products in African countries
Two key foreign policies, FOCAC and Belt and Road Initiative (BRI), by China are the foundations on which the trade is done with its African partners
The study left out the first two years of FOCAC due to a lack of data. It is followed by the current era in which there is a combination of the BRI and the FOCAC being concurrently implemented in trade-related issues with Africa
Summary
1.1 BackgroundOver the last two decades, there has been a surge in the quantities of "Made in China" products in African countries. The introduction of the Forum for China – Africa Cooperation (FOCAC) in 2000 was a gateway that was opened to increase the flow of trade between these two partners. China having high manufacturing output has been in search of global markets and Africa is one of the markets with high potential to buy their products. The continent including the six countries in this study, Algeria, Egypt, Kenya, Ghana, Nigeria, and South Africa, is very rich in natural resources which are well distributed across the whole continent but even in individual countries. These include mineral deposits, rich agricultural lands, high crop output, metals, and oil. With a fast-growing economy that rose in a short space of time to be a global economic giant, such resources are needed to sustain the economic growth and to supply the ever-rising demand from the Chinese market
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