Opinion: Chinese Economic Slowdown Won’t Hurt African Imports…For Now

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Written by Staff

From TheMarketMogul. Opinion by James Hunt.

 

China’s gross domestic product growth rate of 7.4 percent for 2014 was the weakest in 25 years, something that has raised many eyebrows.

What will the effect be on its import levels and relationship with Africa?

The good news is that the China economy is actually becoming better balanced. Consumption is becoming a larger proportion of GDP and that, combined with a growing middle class could spell good news for African mineral exports.

If there is less investment inside China, the government may look to further strengthen their investment abroad, and Africa would seem like the obvious place.

Although there is concern that Chinese investment has drawbacks due to the use of Chinese workers who are often segregated from African settlements, the continent will only benefit from the new and improved infrastructure.

Africa still has its problems but Chinese aid and investment is helping.

Although China is experiencing diminished growth for the first time in a generation, it will hopefully not affect its involvement in Africa. After all, it is still above 7 percent, which in a developed economy would appear outstanding.

Assuming the rate of growth for Chinese GDP continues to balance out, away from the levels we have seen in the past, there may be cause for concern in the future as the Chinese government have to put the reins on investment.

However, for the time being, China will continue to benefit Africa in terms of exports and foreign investment.

Read more at TheMarketMogul.