The World Bank has revised its global growth prospects, thanks to a strong economic rebound by China, following the optimisation of the Covid-19 containment measures by Beijing.
China’s economy is now expected to grow by 5.1 per cent in 2023, injecting new impetus into the global economic outlook that is now projected to grow by two per cent compared to the initial growth outlook of 1.7 per cent.
As the second largest economy and home to 20 per cent of humanity, what happens in China matters to the rest of the world.
A healthy Chinese economy will boost demand for goods and services from other countries, leading to increased economic activity worldwide.
China is a key player in global supply chains, and disruptions to its economy can have a significant impact on the supply of goods worldwide.
When China’s economy is strong, it can help to stabilise global supply chains and prevent shortages of essential products.
A well-functioning Chinese economy is also a panacea to geopolitical stability as it reduces the likelihood of economic and political crises that can spill over into other parts of the world.
This is particularly important at this time when geopolitical tensions are mounting following the ongoing conflict between Russia and Ukraine.
The news of good economic performance by China has been well received in many developing countries, especially in Africa.
Emerging economies
As the largest developing country, China has demonstrated a careful understanding of the needs of other emerging economies; often extending a hand to jointly pull through development challenges such as penury.
For thirteen years in a row, China has become Africa’s largest trading partner, with trade between the two sides hitting $254 billion reaching in 2021.
This is four times the volume of trade between the United States and Africa. China has been importing large quantities of agricultural produce, oil, gas, and other natural resources from Africa while exporting manufactured goods, infrastructure, and technology to the continent.
In the last ten years, China has also maintained the lead as Africa’s largest investor, with Chinese companies investing in various sectors such as infrastructure, mining, agriculture, and manufacturing.
Chinese investments have helped to boost economic growth in Africa by up to 20 per cent in the last decade.
Millions of job opportunities have been created by Chinese firms for local communities in different countries across the continent.
In terms of infrastructure development, China has played a key role in upgrading Africa’s productive sectors through the construction of roads, railways, ports, and airports. These infrastructure projects have helped to improve connectivity and reduce transportation costs, making it easier for African countries to trade with each other and with the rest of the world.
Trade
Today, Africa’s prospect of realising the continental trade area is more feasible because of the infrastructure realised in partnership with Beijing.
In addition, China has been sharing its technological expertise with African countries, particularly in the areas of telecommunications and renewable energy. Chinese companies have been involved in the installation of mobile networks, as well as the construction of solar and wind power plants.
Finally, with a stronger economy, China will take additional steps to address concerns over debt sustainability in Africa, including offering debt relief and restructuring loans.
China’s actions and decisions both bilaterally and through multilateral platforms like the Debt Service Suspension Initiative has helped to alleviate the debt burden on African countries, allowing them to focus on economic recovery from the Covid-19 global health crisis, climate change impacts and consequences of conflict in Eastern Europe.
Dr Adhere is a scholar of international relations with a focus on China-Africa development cooperation. Twitter: @Cavinceworld.
