Transcript China`s Growth: Implications for Poverty Reduction in SADC

“China’s Growth: Implications for
Poverty Reduction in SADC”
Presentation to SARPN
Dr Martyn J. Davies
Director, Centre for Chinese Studies,
CEO, Emerging Market Focus,
Senior Lecturer, Gordon Institute of Business Science
29th March 2006
Some questions to ponder this afternoon:
 How will China’s growth impact us?
 What are China’s motivations in Africa?
 Can Africa compete commercially?
 What drives development?
 Is Africa’s approach to development flawed?
 What is China’s economic destination?
 What if China ran Africa?
Centre for Chinese Studies
“I see growing on the horizon the
greater peril than Germany or Japan
ever were…our terrible enemy,
America”
Enoch Powell (1912-1998),
British MP
Centre for Chinese Studies
China’s Impact on the Global Economy
• Shift of manufacturing
• Consumer market
• Commodity “super cycle”
• Emerging multinationals
• China and the global value chain
• Intense competition
• Marginalization of SEMs
Centre for Chinese Studies
“Is Africa a continent that shuns
rather than embraces foreign
competition?
Centre for Chinese Studies
China’s Emerging Multinationals
Centre for Chinese Studies
But Chinese SOE firms are largely
non-collaborative in nature. Why?
A. Politically determined business models
B. Do they seek profit?
C. A mercantilist approach to business
Centre for Chinese Studies
China’s Growth Trajectory
Source: www.gs.com
Centre for Chinese Studies
Questioning the WBM….
A new model for development
Q. What if the Chinese ran Malawi?
Q. The role of the state as a driver of
development?
Q. Reaganism vs Dengism
Centre for Chinese Studies
China’s “Marketized” Economy
Free Market
Government controlled
 Open to foreign investment
 Full competition
 Limited state involvement
• Closed to foreign investment
• Limited/no competition
• High state involvement
Consumer electronics
Light industrial
manufacturing
Finance, insurance
Electronics, telecom
equipment
Real estate
Automotive
Wholesale/retail trade,
catering services
Apparel, textiles
Size of circle indicates
sector’s contribution to GDP
3%
5%
15%
Government
agencies
Radio, film, TV
Postal, telecom services
Africa’s knowledge bridge to China