China's investment and trade encourage economic growth. China's engagement in Africa has been paralleled with numerous African countries that experienced robust economic growth and made strides in alleviating poverty. For one, there is a strong complementary relationship between FDI and trade – specifically, a greater inward stock of FDI is associated with higher exports (Boardman, 2007). Therefore, if China's presence continues to grow, "China may eventually prove to be the new African growth engine that the Organization for Economic Cooperation and Development (OECD) has hesitated to become" (Besada et al., 2008:4).
China has altered the way in which the rest of the world views prospects on the continent: not just advanced economies, but also other emerging economies, such as India, Russia and Brazil. Today, individual African governments have more bilateral partnership choice than ever before. To be sure, should the continent position itself right, the continent could gain a significant lift from this shift in perception.
China's expansive engagements have rejuvenated internal expectations across Africa. The hope is the elevated interest could lead to addressing the long neglected infrastructure deficit; intensify economic opportunity and activity; create new alternatives for diplomatic partnerships; and address the socio-economic challenges of poverty, AIDS and malaria (Gill et al., 2007).
In conclusion, China's economic growth is expected to be above 10 percent year on year in 2010. Trade will remain intimately part of its economic alchemy, despite what will prove to be an inevitable multi-year internal rebalance of the economy away from the export-orientated coastal areas to consumer-led growth. In addition, economic growth, industrialization and urbanization in the second tier cities will continue to fuel demand for Africa's resources. In the longer run, as Chinese income per capita rises and wages' share of the economy grows, both African markets and production are likely to take on an even greater relevance. We expect China-Africa trade to approach $300 billion in 2012. And the upside risk to the forecasts are overwhelming, considering the fact that China's internal demand is anticipated to balloon. Despite the overwhelming nominal success of China-Africa trade and future potential, two questions continue to cast a shadow over Sino-African trade engagements.
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