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ChinAfrica : How can the Sino-African cooperation be beneficial for Africa ?

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  • Luca, MARCHIORI

Abstract

In this paper, different scenarios of increased cooperation between China and African countries are simulated. Recent intensification of political and economic ties between China and Sub-Saharan Afreican countries may give hope that an economic improvement in Sub-Saharan Africa (SSA) is possible. Three channels may lead to a catching-up for Africa with China : a reduction in Africa’s investment risk, an increase in its total factor productivity (TFP) and an improvement of its worker skills. A computable general equilibrium model of the world economy is used, that shares the world in 10 regions, among which Sub-Saharan Africa and China. Three scenarios are considered in which, by 2100, Africa will have reduced simultaneously its gaps in investment risk, TFP and eduction to China by either 20% (scenario 1), 40% (scenario2) or 60% (scenario3). The effects on the Sub-Saharan African economy are very promising. The results show that, already in 2050, Africa will have increased its per capita Gross Domestic Product (GDP) by 50% with scenario1, 80% with scenario 2 and by 125% with scenario 3.

Suggested Citation

  • Luca, MARCHIORI, 2007. "ChinAfrica : How can the Sino-African cooperation be beneficial for Africa ?," Discussion Papers (ECON - Département des Sciences Economiques) 2007014, Université catholique de Louvain, Département des Sciences Economiques.
  • Handle: RePEc:ctl:louvec:2007014
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2007-14.pdf
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    More about this item

    Keywords

    OLG-CGE Model; Catching-up; sSmulations; Africa; China;

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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