China Almost Single Handedly Pulls Africa Out Of Poverty

Posted: 6/30/2017

Trigger

Just read this recommendable report by the McKinsey Institute: The closest look yet at Chinese economic engagement in Africa. This report focuses on eight major countries of sub-saharan Africa.

I have read over the years a number of reports how China was active and engaging in various countries in Africa, but this McKinsey report finally made me aware of the tremendous scope and scale of China’s economic efforts in Africa.

Phenomenal Scale And Scope

China’s efforts are as awesome as or comparable to the U.S. has been pulling China out of poverty with the beginning of Deng Xiaoping reforms starting in the late 1970s or the famous Marshall Plan that helped Western Europe to overcome the economic devastation of World War II.

Shame, in particular, on the European Union (perhaps except the UK and France) who engage more in the business of strangulating the African economies with their socialism, central planning, and foremost their excessive environmentalism.

A Summary

Based on the above report by McKinsey may I try to summarize as follows (emphasis added):

1. In the last two decades China became Africa’s most important economic partner
2. “Across trade, investment, infrastructure financing, and aid, no other country has such depth and breadth of engagement in Africa. Chinese “dragons”  - firms of all sizes and sectors - are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent.”
3. “Foreign direct investment has grown even faster over the past decade, with a breakneck annual growth rate of 40 percent.”
4. There are more than 10,000 privately owned Chinese companies operating in Africa
5. “Chinese firms operate across many sectors of the African economy.”
6. “In manufacturing, we estimate that 12 percent of Africa’s industrial production - valued at some $500 billion a year in total—is already handled by Chinese firms. In infrastructure, Chinese firms’ dominance is even more pronounced, and they claim nearly 50 percent of Africa’s internationally contracted construction market.”
7. “At the Chinese companies we talked to, 89 percent of employees were African, adding up to nearly 300,000 jobs for African workers.”
8. “In the first, the revenues of Chinese firms in Africa grow at a healthy clip to reach around $250 billion in 2025, from $180 billion today. ”