China’s Trade in Africa Carries a Price Tag

This article reminded me of a conversation I had with a shopkeeper in Freetown, Sierra Leone last fall. He noted that although there was a great deal of rice grown upcountry in Sierra Leone, his shelves were stocked with rice imported from China. Due to the terrible road conditions in Sierra Leone it was very difficult for the farmers to get the rice to him. Instead he would go to Dubai on a regular basis to import foodstuffs such as rice...(Dubai is a huge intersection point for the Far East, Middle East, Africa and Europe).

To give an idea of how bad the roads are--it took 8 hours to go from Freetown to the hospital in the Bush at which I worked--the distance was about 100 miles.

From South Africa’s manganese mines to Niger’s uranium pits, from Sudan’s oil fields to Congo’s cobalt mines, China’s hunger for resources has been a shot in the arm, increasing revenues and helping push some of the world’s poorest countries further up the ladder of development.

But China is also exporting huge volumes of finished, manufactured goods — T-shirts, flashlights, radios and socks, just to name a few — to those same countries, hampering Africa’s ability to make its own products and develop healthy, diverse economies.

(..)

But China’s growing presence in global trade is wiping out thousands of jobs in countries with fledgling manufacturing sectors like Zambia and South Africa.

Despite relatively low wages in many countries, African manufacturers find it very hard to compete, arguing that China’s currency policies undervalue the yuan and give Chinese exporters a huge advantage.

Many industries in China also benefited at various points from subsidies and free or low-cost government financing, making their costs lower. Beyond that, there are major infrastructure problems in Africa, where industry struggles with inadequate roads and railways, and unreliable electricity and water supplies.