Commentary - China-Africa trade jumps by 39% Source of extract: www.news.bbc.co.uk Date of extract: 06/01/06

Graph 1 Chinas trade with africa

Graph 1 clearly shows the increase of trade between China and Africa since 2000.

Other countries, which are more ethically constrained or restricted by principles then China, are not trading with Africa, because of the corruption, violence and human rights concerns. Therefore it is easy for China to trade with Africa due to the lack of competition.

Africa has increased the amount of Chinese-made goods they import, which is beneficial for Africa as Chinese goods are often inexspensive. This means that although there is a high amount of poverty in Africa, Africans can afford the product. Since Africa is exporting goods, sending goods to China, there is potentially room to barter on the price of the Chinese-made goods.

China has scrapped tariffs for African goods, which means that African goods cost less than other countries goods to import into China. Chinese Firms have also increased investments, the amount of money they are putting into, African infrastructure. This is to develop the African infrastructure and makes it easier to transport goods, which would increase trade. China might be attempting to get Africa dependent on them, so that China can secure the fuel and raw materials that are needed to sustain, fulfill demand for the growing Chinese economy, since there is a scarcity or lack of oil and it will eventually become harder to import oil unless a solution is found. The World Trade Organization (WTO), an international agency which encourages international trade and helps with economic disputes, might get involved with the trade between Africa and China if they believe that China is using unfair business practices or taking advantage of Africa.

A similar event was the trade between EU, European Union and Latin America of bananas. The trade helped increased the amount of Latin American export and other aspects of the economy such as employment, which was helping Latin America, become wealthier.

However the Chinese - African relationship may not provide equal benefits. It could be possible that China is taking advantage of the less wealthy countries. An example is the African Cup stadiums were financed with Chinese loans and build by Chinese construction companies, which gave no opportunity to help Africa with employment.

The increase of trading in Africa is beneficial, because it is helping to increase Africa's exports and the more they export the more it helps them towards escaping poverty and to solve some of the reasons other countries will no trade with them. The increase amount of exports will also help to raise the Gross Domestic Product, which is the total market value of goods and services produced by a country normally within a year. If these things increase it will help to make the country wealthier and to raise the quality of life, for example it could possibly decrease the amount of unemployment. Problems could arise from the trading. Pollution might increase due to the transport of the goods, and also there will be more goods in china which are capable of increasing pollution. It could possibly become unbeneficial for Africa if they became too dependent on china.

Bibliography

Article

"BBC NEWS | Business |0 China-Africa trade jumps by 39%." BBC NEWS. 06 Jan. 2006. Web. 23 Jan. 2010. <http://news.bbc.co.uk/2/hi/business/4587374.stm>.

Graph

"China in Africa Discussing Trade, Investment, and Power." Crossed Crocodiles. 5 Jan. 2010. Web. 25 Jan. 2010. <http://crossedcrocodiles.wordpress.com/2010/01/05/china-in-africa-discussing-trade-investment-and-power/>.

China-Africa trade jumps by 39%

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