China-Africa merchandise trade: What was the impact of the 2009 commodity price decline?
2010-02-17 Edinger, H., Ron Sandrey
Resources > By Topic > REGIONAL TRADE ARRANGEMENTS > SACU - China
China-Africa merchandise trade: What was the impact of the 2009 commodity price decline? by Ron Sandrey and Hannah Edinger
Two of the most important aspects of African trade are (1) the impacts of China as a partner and (2) the effects of the late 2008 commodity price decline. We document (a) the rise of Chinese trade with Africa through to 2008 from the African perspective, and (b) update the China-Africa trade relationship for 2009 using Chinese data to examine the commodity price implications. The first part of the paper highlights (i) the dramatic growth in China/Africa trade over recent years, (ii) that Chinese imports from Africa are heavily dominated by resources, in particular mineral fuels and that Chinese exports to Africa are much more diverse and covered most of the general manufacturing sectors as well as construction related machinery and equipment, and (iii) that while Chinese trade is increasing the EU continues to be the main trading partner in many instances.
Seen from the Chinese perspective, the second part of the paper shows that Africa’s overall position with China deteriorated during 2009. While Chinese imports from the world decreased by 11.3 percent overall, imports from Africa decreased by a much larger 24.3 percent, and while Chinese exports to the world declined by 15.9 percent, exports to Africa declined by a much smaller 6.2 percent. Had the early 2008 boom continued for another year and average prices not declined, Chinese imports from Africa would have been $25.9 billion higher than they actually were at the 2009 quantities, and while had the 2009 prices been the same and the 2009 quantities not increased significantly the 2009 values would have been $8.8 billion lower than they were. Thus, by running faster (increasing quantities), Africa mitigated some of the loss. Therefore, 1) the glass is half empty as African exports in 2009 (as measured by Chinese imports) declined by $25.9 billion because of the late 2008 – early 2009 commodity price decline and more overall because it is likely that exports to other countries would have followed the same pattern, but 2) the glass is half full because the 2008 commodity boom increased the injection of capital into Africa and/or African interests during 2008 from the 2007 data.
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