The paper employs revealed comparative advantage (RCA) to assess the competitiveness of the case study countries in the Chinese market. The empirical analysis revealed that even though there was a fierce competition in the labour-intensive manufacturing industry with most of the case study countries exports. However, further disaggregation revealed otherwise. It also indicated that the establishment of the Special Preferential Tariffs Treatment (SPTT) by China since 2005 has contributed to the increasing number of exported commodities to the Chinese market. The effect is reflected in the increased export revenue of most of the least developed countries (LDCs) and a secured market for such countries export products.
Table of Contents
1. Introduction
2. Literature Review
3. Stylized Facts of China’s Trade with Africa
4. The Driving Force of China-Africa Trade Relation
4.1 Demand Driven Factors
4.2 Demand for Infrastructure
4.3 Demand for Natural Resource
4.4 Export Markets
5. Trade Empirical Analysis
5.1 Data and Empirical Findings
5.1.1 Angola
5.1.2 Ghana
5.1.2.1 Section-Wise (1-digit level)
5.1.2.3 Sector-Wise (2-digit level)
5.1.2.4 Commodity-Wise
5.1.3 Sudan
5.1.3.1 Section-Wise
5.1.3.2 Sector-Wise (2-digit level)
5.1.3.3 Commodity-wise
5.1.3 Inter-Temporal Variation in Revealed Comparative Advantage: 2007-2009
5.2 Angola
5.3 Ghana
5.4 Sudan
5.5 Angola-Ghana-Sudan: Sector Comparative Analysis
5.6 Spearman Rank Correlation based Analysis
5.7 Finger-Kreinin Export Similarity Index (ESI)
6. Conclusion
Research Objectives & Key Themes
This paper aims to assess the impact of China's growing economic influence on Sub-Saharan Africa by analyzing the trade competitiveness of Angola, Ghana, and Sudan within the Chinese market. It specifically examines whether these countries possess a "revealed" comparative advantage in their exports to China and evaluates the potential competition China poses to their local industries.
- Analysis of China-Africa bilateral trade dynamics and historical evolution.
- Measurement of comparative advantage using the Balassa Index (RCA).
- Evaluation of trade competitiveness using the Finger-Kreinin Export Similarity Index.
- Investigation into infrastructure demand and natural resource acquisition as primary trade drivers.
- Empirical assessment of sector-specific export performance across the three case study nations.
Excerpt from the Book
4. The Driving Force of China-Africa Trade Relation
The centripetal force that seems to bring China and Africa closer together through trade and investment hinges on four vital compromising factors: African demand for infrastructure, China’s demand for natural resources especially oil and metals, markets for exports and China’s approach to financing. However, supporting mechanisms fueling and facilitating the fast pace of their trade and investment relations had been the Chinese government’s global mission of market outreach strategy. Even though certain degree of collaboration exists between the African leaders and the Chinese government in some aspect of their engagement, the sole effort by the Chinese government and its citizens to cement this relationship had been government institutions and policies as well as the entrepreneurial efforts of the private sector.
Summary of Chapters
1. Introduction: Provides an overview of the escalating diplomatic and economic ties between China and Africa, contextualized by historical and post-Cold War developments.
2. Literature Review: Synthesizes existing research on China-Africa trade volumes, export dependencies, and the perceived impacts of Chinese imports on African domestic production.
3. Stylized Facts of China’s Trade with Africa: Reviews demographic and economic growth patterns in Africa, highlighting the continent's dependency on global commodity demand and infrastructure gaps.
4. The Driving Force of China-Africa Trade Relation: Identifies infrastructure needs, resource demand, export market creation, and Chinese financing as the core drivers of bilateral economic relations.
5. Trade Empirical Analysis: Conducts a quantitative assessment using RCA and Finger-Kreinin indices to determine comparative trade advantages for Angola, Ghana, and Sudan.
6. Conclusion: Summarizes findings and argues that African nations must move beyond simple raw material exports toward value-added production to maximize economic benefits from the relationship with China.
Keywords
Bilateral Trade, China, Revealed Comparative Advantage, Sub-Saharan Africa, Angola, Ghana, Sudan, Infrastructure, Natural Resources, Export Similarity Index, Economic Development, Trade Policy, Manufacturing, Commodity Exports, Foreign Direct Investment
Frequently Asked Questions
What is the primary focus of this research paper?
The paper examines the growing economic relationship between China and Sub-Saharan Africa, specifically focusing on the export competitiveness of Angola, Ghana, and Sudan in the Chinese market.
What are the central thematic areas addressed in the study?
The central themes include the drivers of China-Africa trade, comparative advantage analysis of specific commodities, and the potential impact of Chinese competition on African manufacturing and agricultural industries.
What is the core research objective of this work?
The objective is to determine if Angola, Ghana, and Sudan have a "revealed" comparative advantage (RCA) in their exports to China and how this impacts their economic development.
Which scientific methodology is applied in the empirical analysis?
The study primarily employs the Balassa Index (RCA) to measure comparative advantage and the Finger-Kreinin Export Similarity Index (ESI) to evaluate competition between Chinese and African exports.
What is discussed in the main body of the paper?
The main body contains an extensive empirical analysis of trade data from 2007 to 2009 for Angola, Ghana, and Sudan, utilizing Standard International Trade Classification (SITC) data to analyze exports at various levels of disaggregation.
Which keywords best characterize this research?
The study is characterized by terms such as Bilateral Trade, China, Revealed Comparative Advantage, Sub-Saharan Africa, and specific commodity trade metrics.
How did the establishment of the Forum on China-Africa Cooperation (FOCAC) influence trade?
FOCAC, launched in 2000, marked a pivot toward more pragmatic, economic-focused cooperation between China and African nations, facilitating increased access to the Chinese market.
Does China pose a threat to African manufacturing?
The study indicates that while China’s presence creates competition, further disaggregation reveals that African products in many sectors actually complement Chinese imports rather than being completely displaced by them.
What role does the Special Preferential Tariff Treatment (SPTT) play?
The SPTT was implemented by China in 2005 to remove tariffs on specific goods from least developed African countries, contributing significantly to the surge in trade volume between 2006 and 2010.
What conclusion does the author reach regarding the benefits for Africa?
The author concludes that African nations must analyze the value-added level of their exports and look beyond raw bilateral trade values to foster long-term goals like wealth creation, employment, and poverty alleviation.
- Quote paper
- Doctor Stephen Bodybobton Antwi (Author), Michael Mitchell Omoruyi Ehizuelen (Author), 2013, Comparative Advantage of Sub-Sahara African Exports in China, Munich, GRIN Verlag, https://www.grin.com/document/233678
