It is globalization's next great story

FOCUS CHINA-AFRICAN TRADE: "China and the New Africa: Sino-African cooperation may be globalization's next great story," by Bradley Gardner, China International Business, June 2009.

FOCUS CHINA-AFRICAN TRADE: "Zimbabwe: Great potential, worthless currency," by Bradley Gardner, China International Business, June 2009.

Been selling this one in Q&As for years, in that Cebrowski-like manner of simply making the logical leap (China must move up production chain, look at underutilized labor pools inside the Gap and think which one China would be most comfortable pursuing, and then bet that China will target Africa). Never was quite sure when the evidence would show up, but figured it would. Then that World Bank report came out in 2007 (Africa's Silk Road) and bingo!

Martin Davies of Frontier Advisory:

The African consumer used to be a contradiction in terms, now there are several consumer chains showing 30-40% yearly growth across the whole region.

And so China's investment grows steadily and its trade skyrockets.

Here comes the Suez Economic and Trade Cooperation Zone, a free trade zone to be up and running in 2018. Six other zones also in construction, with Zambia's online first.

The decoupling concept, according to Davies, will be replaced by the "new coupling."

For now, African growth depends a lot on Chinese demand, but Chinese growth is also becoming more dependent on African supply. A chart shows "the beginnings of a growth correlation," meaning the two go up and down together--"almost an absolute correction after 1999."

Europe and the U.S. may pull funds as a result of the crisis, but China is coming on even stronger. And Chinese companies now make the effort to publicize the expected job creation with every investment.

A big African hope? Becoming ag powers. How realistic with global warming? Not without a ton of innovation and biotech.

In the second piece, we are told that if Zimbabwe ever does stabilize, "it has the potential to be the single most important agricultural center on the continent."

That's what Mugabe has achieved--destroying a once-thriving agricultural powerhouse. But the potential's still there.

Comments

[Bradley Gardner]

Glad you liked it, had a story about the Congo similar to my Zimbabwe story that got cut, which can be read here:

http://chinesebox.typepad.com/chinesebox/2009/06/censored-china-in-the-congo.html

I've learned some more things since then though that makes me think that the deal is a bit more of a mess than I thought (the Congo doesn't really have much of a government).