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							“China’s Growth: Implications for
  Poverty Reduction in SADC”




        Presentation to SARPN

        Dr Martyn J. Davies
        Director, Centre for Chinese Studies,
        CEO, Emerging Market Focus,
        Senior Lecturer, Gordon Institute of Business Science

        29th March 2006
Some questions to ponder this afternoon:

 How will China’s growth impact us?
 What are China’s motivations in Africa?
 Can Africa compete commercially?
 What drives development?
 Is Africa’s approach to development flawed?
 What is China’s economic destination?
 What if China ran Africa?




                         Centre for Chinese Studies
“I see growing on the horizon the
  greater peril than Germany or Japan
  ever were…our terrible enemy,
  America”
         Enoch Powell (1912-1998),
         British MP




              Centre for Chinese Studies
China’s Impact on the Global Economy

• Shift of manufacturing
• Consumer market
• Commodity “super cycle”
• Emerging multinationals
• China and the global value chain
• Intense competition
• Marginalization of SEMs
                  Centre for Chinese Studies
“Is Africa a continent that shuns
  rather than embraces foreign
  competition?




             Centre for Chinese Studies
China’s Emerging Multinationals




            Centre for Chinese Studies
But Chinese SOE firms are largely
  non-collaborative in nature. Why?


A. Politically determined business models
B. Do they seek profit?
C. A mercantilist approach to business




               Centre for Chinese Studies
China’s Growth Trajectory




                               Source: www.gs.com


        Centre for Chinese Studies
Questioning the WBM….
  A new model for development


Q. What if the Chinese ran Malawi?
Q. The role of the state as a driver of
   development?
Q. Reaganism vs Dengism



                Centre for Chinese Studies
                     China’s “Marketized” Economy
        Free Market                                                                           Government controlled
         Open to foreign investment                                                          • Closed to foreign investment
         Full competition                                                                    • Limited/no competition
         Limited state involvement                                                           • High state involvement

                                 Consumer electronics
              Light industrial
              manufacturing                                                              Finance, insurance       Government
                                               Electronics, telecom                                               agencies
                                               equipment
       Real estate                                                                     Radio, film, TV
                                                                          Automotive




                                                        Wholesale/retail trade,                    Postal, telecom services
                       Apparel, textiles
                                                        catering services




  Size of circle indicates
sector’s contribution to GDP


                                 3%
                                                 5%
                                                                        15%
Africa’s knowledge bridge to China