Investment and Trade between West Africa and China: The Senegalese Case

Article excerpt

ABSTRACT

This paper relates the trade and foreign direct investment between China and West Africa. Trade volume and foreign direct investment still increasing, however with global financial crisis is affecting the global economy.

It is possible to estimate the trade volume from 2000Q1 to 2009Q4 is possible by using the Least Squares (LS). The article clearly shows that trade volume is positively correlated to imports and exports, and not correlated at all to the distance, in the sense that distance is a constant factor the distance is constant.

I also argue that the economic relations between China and West Africa are stronger and stronger are becoming stronger- at a moment when the former aid-based relationship is being or has been- replaced by strong business partnerships

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

The Sino-African relations started since Mao's presidency. As early as the 1960's China implemented an anti-Western imperialist agenda based on ideological solidarity with other third world or developing countries, China centered on building ideological solidarity with other developing countries on repelling western "Imperialism". Nowadays, China interests evolved into more pragmatic pursuits such as trade, investment and energy. In the Post Cold War era, however, the Sino-African relations have pragmatically shifted from their former ideological focus into an almost strictly economic paradigm- that is, a cooperation based on trade, investment, and energetic issues.

West Africa is rich in natural resources like oil, gas, wood, diamond, gold, uranium. Nigeria, Mauritania, Niger, Chad, Sudan, Senegal, Conakry Guinea, Mali, Ghana and Bissau Guinea are ones of the most solicited by industrial countries.

Recently, China has identified the African continent as a significant economic and strategic partner. America and Europe consider Africa like a treasure ruled by opportunists who didn't respected democratic rules... the rule of law and that free markets is being challenged by the escalating Chinese influence in Africa.

Nowadays, the most pernicious effect of the renewed Chinese interest in Africa is that China is legitimizing and encouraging African's repressive regimes, by increasing the likehood of weak and failed states (P. Brooks and J.H. Shin, 2010). The United States and Europeans counties (France, England, and Germany...) were Africa's first strategic partners; now China is coming entering the scenery with new rules of partnership. The US interests lie in countering effectively these reinforced S ino- African cooperation these developments in Africa by deftly encouraging democratic processes, economic freedom and respect for human rights throughout the continent.

China's fast-growing economic ties with Africa are attracting considerable attention. The relationship came into the spotlight during the Forum China-Africa Cooperation (FOCAC) in Beijing in November, 2006 and the Annual Meetings of the African Development Bank (AfDB) in Shanghai in May 2007. While the expansion of trade and investment between Africa and China has been generally welcomed, concerns have been expressed about how China's growing might affect African development. But what roles has China exactly played? What drives China's trade and financial involvement in Africa? What are the implications of the relationship for Africa and other development partners? This paper aims at shedding light on these questions, particularly the first two, by examining the Senegalese case.

There have been relatively a few systematic studies of the resurging economic relations between China and Africa. Alden (2005) reviews the evolution of Sino-African economic relations since the 1970s; Edwards and Jenkins (2005) study trade-poverty links; Kennan and Stevens (2005) attempt to identify possible winners and losers among African countries as China becomes more prominent in world trade; Jenkins and Edwards (2006) examine the direct and indirect trade impact of China and India on sub-Saharan Africa. …