Advantages and disadvantages of Chinese investment in,and trade with,Africa

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  • Advantages
    • To China
      • Development of new markets for Chinese goods
      • No colonial background between C&A only aid projects. Investment well recieved.
      • New links developed
      • Trade between C&A totalled £30 billion in 2008
    • Advantages & Disadvantages of Chinese investment in,and trade with, Africa
  • Increasing influence & expanding access to natural resources China needs to support development.
    • To China
      • Development of new markets for Chinese goods
      • No colonial background between C&A only aid projects. Investment well recieved.
      • New links developed
      • Trade between C&A totalled £30 billion in 2008
  • To Africa
    • Chinese companies employ local workers
    • C investment building new factories and infrastructure across A
    • Workers learning new skills
    • C tried to offset trade deficits by offering favourable terms of trade for A products and providing aid.
      • E.g Scrapping tariffs on 190 important goods from 28 of least developed A countries.
    • 700 Chinese companies operate in 49 African countries.
    • Advantages
      • Advantages & Disadvantages of Chinese investment in,and trade with, Africa
  • Disadvantages
    • To China
      • Economic migration of people from C to A countries to earn higher wages.
      • Deflection of resources away from projects in C.
      • Possible effects on Chinese economy and employment sectors
    • To Africa
      • Wages remain low
      • Most A countries have growing trade deficit in C, in spite of tax-free trading agreements.
      • Large-scale projects can lead to displacement  of significant no of people from homes.
      • China sometimes insists that workers from C are used on large construction project.
      • Evidence in some areas of health and safety regulations being ignored
  • To China
    • Economic migration of people from C to A countries to earn higher wages.
    • Deflection of resources away from projects in C.
    • Possible effects on Chinese economy and employment sectors

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