Role of China in SSA:Trade
Raphael KaplinskyInstitute of Development Studies,Centre for Research in Innovation
Management
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
A taxonomy for assessing the impact of Asian Drivers on other economies
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
The impacts may be competitive or complementary
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
And they may be direct or indirect
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
We know much more about the direct impacts
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
From the rich country perspective, we tend to focus on the competitive effects
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
But in SSA, the complementary impacts are often much more visible
Vectors Direct Indirect
Trade
Complementary
Competitive
Production and FDI
Direct Indirect
Complementary
Competitive
Finance
Direct Indirect
Complementary
Competitive
Governance
Direct Indirect
Complementary
Competitive
Migration
Direct Indirect
Complementary
Competitive
Focusing on the trade vector
Supplier Year Exports ($ '000):
World USA US share
Kenya 2000 51,527 46,701 90.6%
2004 305,448 295,520 96.7%
Lesotho 2000 154,192 146,364 94.9%
2004 494,155 481,787 97.5%
Madagascar 2000 610,683 115,377 18.9%
2004 559,501 345,728 61.8%
Swaziland 2000 37,712 33,356 88.4%
2004 190,537 188,467 98.9%
South Africa 2000 453,153 150,313 33.2%
2004 252,453 149,402 59.2%
SHARE OF C&T EXPORTS DIRECTED TO THE US
CLOTHING AND TEXTILES EXPORTS ARE IMPORTANT
• Lesotho, clothing and textiles accounted for 99% of manufactured exports and 50% of GDP in 2002
• Kenya in 2003, employment in EPZ clothing enterprises accounted for the equivalent of nearly 20 percent of all formal sector manufacturing employment
SSA export value
China exports in equivalent product groups
AGOA -17 58
Lesotho -17 112
Madagascar -14 76
S. Africa -45 65
Swaziland -10 91
Kenya -3 97
CLOTHING AND TEXTILE IMPORTS INTO US ($m) 2005/2004
SSA unit prices China unit prices in equivalent product groups
AGOA -0.9 -45.9
Lesotho -3.2 -46.2
Madagascar -9.5 -44.0
S. Africa 3.0 -33.0
Swaziland -2.7 -51.9
Kenya -1.9 -44.8
CLOTHING AND TEXTILE IMPORTS INTO US UNIT PRICES –2005/2004
Top 10 products
Value of US clothing imports: Jan-April 2006 vs Jan-April 2005
0 20 40 60 80 100 120
S.Africa
Mauritius
Swaziland
AGOA
Madagascar
Lesotho
Kenya
World
Percentage
Actual and projected global share of China’s consumption of base metals
0%
5%
10%
15%
20%
25%
30%
1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
% o
f to
tal
Copper Alum inium Zinc Nickel Steel Iron Ore (Trade)
SSA EXPORTS
SSA IMPORTS
CHINA IMPORTS
CHINAEXPORTS
SSA GAIN
SSA GAINSSA LOSS
SSA LOSS
Clothingfootwear
Hard commodities
Clothingfootwear
Oil All SSA
SA, Lesotho, Swaziland,
Madagascar,Kenya, Mauritius
Most SSA
Oil exporters, Zambia, SA, DRC, Botswana, Ghana,
Gabon, etc
Policy conclusions
• Changing terms of trade
• Industrial policy– or do we mean innovation policy?
• A level playing field?
• Slow down trade policy reform within SSA
• Look east
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