China's impact on African Industrialization in terms of Trade: The Case of South Africa

• Main Authors: KAAKKOMAKI, LAURI ＴＡＰＩＯ, 寇天佑
• Other Authors: PANG, JIAN-GUO
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/334xyj

碩士 === 中國文化大學 === 國家發展與中國大陸研究所中國大陸組 === 105 === The debate about China’s role in Africa has gotten a lot of attention, and the media narrative often portrays China as a colonial exploiter. This is because there is a view that China only wants the valuable African natural resources and does not not contribute to the development in the region, however the Chinese and some scholars claim that China has not done any worse than its current western competitors. The consensus is that industrialization, which loosely defined means the rise of manufacturing and decline of agriculture as a percentage of GDP, is of vital importance for modernization and development of Africa. In order to have sustainable industrialization, the manufacturing sector has to be profitable in the long run, and these profits are affected by market conditions. This is where China has a huge impact, as its share of the world marker and pricing power affect many new industrializing countries, especially those that compete in the low-price categories. South Africa is an interesting case because it has large natural resource deposits as well as relatively developed economic structure, but it struggles with similar problems as the rest of Africa. This paper asserts that China’s impact on South Africa’s industrialization is a complex process determined by both economical and political factors. I will argue that the strategic trade theory explains the trade and investment patterns between South Africa and China, although the trend in latter is very recently starting to diverge from the premises. From the perspective of industrialization, China has had a net negative impact for the past decade especially in terms of employment, but there is hope that this is starting to change with China’s rising labor costs and investments into South African manufacturing sector.