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China, Africa embrace globalization as developed world retreats

As China and Africa enjoy the fruits of globalization, the United States and Western Europe citizens are scoffing at the movement their governments once championed as a magic bullet to advance development.

BACKLASH IN DEVELOPED COUNTRIES

Donald Trump, who won the American election partly with the help of surging trade protectionism, will be inaugurated as president next week.

Months back, the British voted to exit the European Union (EU) over security concerns and the supposed or real threat that immigrants are taking over their jobs.

While China and Africa push for globalization to fast-track their development, the developed world complains that globalization over the years has had a backlash on their economies.

Back in the mid-1940’s, the developed world through the World Bank and the International Monetary Fund pushed for globalization arguing that a greater global integration was more conducive to peace and prosperity in the world than isolationism.

They argued that through globalization, development even in the poor countries would be fast tracked. When China opened its doors to the outside world in the late 1970s, it tasted the fruits of globalization as its economy grew fast to the current status as the second largest economy in the world after the United States.

After thirty years of successive economic development, China is moving out to the world, transferring huge amounts of capital to Africa and other parts of the world.

WIN-WIN COOPERATION

In Africa, Chinese capital has helped develop the transportation and energy infrastructure, which is key to the economic development on the continent.

In remote African villages, Chinese road engineers wearing hats made out of mats is a common scene. The Chinese are constructing road networks across Africa, a key factor in lowering transport cost and then the cost of products.

In East Africa, the Chinese are funding the construction of the Standard Gauge Railway that will link the hinterland to the outside world through Kenya. The railway will link Uganda and her neighbors Rwanda, the Democratic Republic of Congo and South Sudan, with the Kenyan seaport of Mombasa.

After the completion of the construction, the cost of transport for a 32-ton container to Mombasa will fall from 3,500 U.S. dollars by road, to 1,650 dollars by railway, according to Ugandan government figures.

It would also take only one day to move the container in contrast to the current 21 days.

The Chinese are also funding the construction of huge power dams. In Uganda, for instance, China is funding the construction of the 600MW Karuma hydro power plant and the 180MW Isimba hydro power plant.

From December 2015 to July 2016, over 50 billion dollars worth of agreements were signed in various fields between China and Africa, according to Chinese Foreign Minister Wang Yi, who is on a five-nation African tour.

This is an opportunity Africa must seize, said Isaac Shinyekwa, an economist at Uganda’s Economic Policy Research Center.

Chinese President Xi Jinping, attending a meeting in South Africa in 2015, committed to a 60-billion-dollar fund that will deepen China’s relationship with Africa over the next three years.

Africa’s industrialization is among the 10 major programs announced by China to boost the cooperation.

The new Chinese plants opened, including a car assembly plant established in Ethiopia, also represent a new change in China-Africa win-win cooperation, which features an upgrade from general commodity trade to capacity cooperation and processing trade, according to Wang.

Despite a gloomy world economy and sluggish growth of global trade, China-Africa capacity cooperation and the alignment of their industrial policies are growing robust, Wang said.

This news analysis was compiled by Ronald Ssekandi, Yuan Qing

 

Source: Xinhua | Jan 12

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