IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

China’s Ambiguous Impacts on Commodity-Dependent Countries: the Example of Sub-Saharan Africa (with a Focus on Zambia)

  • Lee Robinson
  • Alice Nicole Sindzingre

The spectacular growth of China has induced major changes for developing countries, in particular low-income Sub-Saharan African economies. Most of these economies heavily depend on primary commodities for their exports, and China’s demand for these commodities, especially oil and metals, has contributed to a long cycle of increase in commodity prices (the ‘supercycle’ of the 2000s), but also to increased price volatility. China has also become a significant trade partner of Sub-Saharan African economies, and invested significantly in Sub-Saharan Africa. A theoretical question is therefore whether these changes may generate structural transformation and trigger sustained growth paths in Sub-Saharan countries. The paper shows that the transmission channels of China’s impact on growth prospects in Sub-Saharan African economies are multiple, both direct and indirect, and underscores the ambivalence of these impacts: i) high commodity prices have the potential to improve fiscal space, creating opportunities to catalyse diversification and structural transformation. Moreover, Chinese investments occur not only in the commodity sectors but also in industrial sectors and infrastructure; ii) however, higher and more volatile commodity prices, driven by China, can result in negative effects (e.g., Dutch disease). Furthermore, China’s demand may lock African economies into their century-old pattern of dependence on primary commodities. Large Chinese investments (especially in infrastructures) may also have lock-in effects, as they are organised by original contracts that exchange investments for commodities; iii) it is particular commodity and industry factors that affect an individual country’s ability to harness opportunities created by high commodity prices, which is demonstrated via the case study of Zambia.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2012-39.

in new window

Date of creation: 2012
Date of revision:
Handle: RePEc:drm:wpaper:2012-39
Contact details of provider: Postal:
200 Avenue de la République, Bât. G - 92001 Nanterre Cedex

Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Kareem Ismail, 2010. "The Structural Manifestation of the ‘Dutch Disease’; The Case of Oil Exporting Countries," IMF Working Papers 10/103, International Monetary Fund.
  2. Patrick A. Imam & Eleonara Granziera & Norbert Funke, 2008. "Terms of Trade Shocks and Economic Recovery," IMF Working Papers 08/36, International Monetary Fund.
  3. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2005. "What You Export Matters," NBER Working Papers 11905, National Bureau of Economic Research, Inc.
  4. Baffes, John, 2007. "Oil spills on other commodities," Policy Research Working Paper Series 4333, The World Bank.
  5. Keiko Kubota, 2005. "Fiscal Constraints, Collection Costs, And Trade Policies," Economics and Politics, Wiley Blackwell, vol. 17, pages 129-150, 03.
  6. Krugman, Paul & Venables, Anthony J, 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
  7. Miklós Koren & Silvana Tenreyro, 2007. "Volatility and Development," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 243-287.
  8. William F. Maloney & Daniel Lederman, 2008. "In search of the Missing Resource Curse," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2008), pages 1-57, August.
  9. Ricardo Hausmann & Michael Gavin, 1996. "Securing Stability and Growth in a Shock Prone Region: The Policy Challenge for Latin America," Research Department Publications 4020, Inter-American Development Bank, Research Department.
  10. Ben S. Bernanke, 1983. "Irreversibility, Uncertainty, and Cyclical Investment," The Quarterly Journal of Economics, Oxford University Press, vol. 98(1), pages 85-106.
  11. Peter Kragelund, 2009. "Part of the Disease Or Part of the Cure? Chinese Investments in the Zambian Mining and Construction Sectors," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(4), pages 644-661, September.
  12. Blattman, Christopher & Hwang, Jason & Williamson, Jeffrey G., 2007. "Winners and losers in the commodity lottery: The impact of terms of trade growth and volatility in the Periphery 1870-1939," Journal of Development Economics, Elsevier, vol. 82(1), pages 156-179, January.
  13. Milan Brahmbhatt & Otaviano Canuto, 2010. "Natural Resources and Development Strategy after the Crisis," World Bank Other Operational Studies 10212, The World Bank.
  14. David I. Harvey & Neil M. Kellard & Jakob B. Madsen & Mark E. Wohar, 2010. "The Prebisch-Singer Hypothesis: Four Centuries of Evidence," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 367-377, May.
  15. Jeffrey A. Frankel, 2010. "The Natural Resource Curse: A Survey," NBER Working Papers 15836, National Bureau of Economic Research, Inc.
  16. Philippe Aghion & Philippe Bacchetta & Romain Ranciere & Kenneth Rogoff, 2006. "Exchange Rate Volatility and Productivity Growth: The Role of Financial Development," Working Papers 06.02, Swiss National Bank, Study Center Gerzensee.
  17. Alberto Alesina & Guido Tabellini, 2005. "Why is fiscal policy often procyclical?," Levine's Bibliography 784828000000000465, UCLA Department of Economics.
  18. Cuddington, John, 1988. "Fiscal policy in commodity-exporting LDCs," Policy Research Working Paper Series 33, The World Bank.
  19. Mauricio Cárdenas & Santiago Ramírez & Didem Tuzemen, 2011. "Commodity dependence and fiscal capacity," Research Working Paper RWP 11-08, Federal Reserve Bank of Kansas City.
  20. Enrique G. Mendoza & P. Marcelo Oviedo, 2006. "Fiscal Policy and Macroeconomic Uncertainty in Developing Countries: The Tale of the Tormented Insurer," NBER Working Papers 12586, National Bureau of Economic Research, Inc.
  21. John Dunning, 2001. "The Eclectic (OLI) Paradigm of International Production: Past, Present and Future," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(2), pages 173-190.
  22. William Easterly, 2007. "Was Development Assistance a Mistake?," American Economic Review, American Economic Association, vol. 97(2), pages 328-332, May.
  23. Norman V. Loayza & Romain Rancière & Luis Servén & Jaume Ventura, 2007. "Macroeconomic Volatility and Welfare in Developing Countries: An Introduction," World Bank Economic Review, World Bank Group, vol. 21(3), pages 343-357, October.
  24. Serkan Arslanalp & Fabian Bornhorst & Sanjeev Gupta & Elsa Sze, 2010. "Public Capital and Growth," IMF Working Papers 10/175, International Monetary Fund.
  25. Michael Gavin & Ricardo Hausmann & Leonardo Leiderman, 1995. "Macroeconomics of Capital Flows to Latin America: Experience and Policy Issues," Research Department Publications 4012, Inter-American Development Bank, Research Department.
  26. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Vegh, 2004. "When it Rains, it Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Working Papers 10780, National Bureau of Economic Research, Inc.
  27. Thomas Baunsgaard, 2001. "A Primeron Mineral Taxation," IMF Working Papers 01/139, International Monetary Fund.
  28. Michael Gavin & Ricardo Hausmann & Leonardo Leiderman, 1995. "The Macroeconomics of Capital Flows to Latin America: Experience and Policy Issues," IDB Publications (Working Papers) 5821, Inter-American Development Bank.
  29. J. R. Hicks, 1953. "An Inaugural Lecture," Oxford Economic Papers, Oxford University Press, vol. 5(2), pages 117-135.
  30. Milan Brahmbhatt & Otaviano Canuto & Ekaterina Vostroknutova, 2010. "Dealing with Dutch Disease," World Bank Other Operational Studies 10174, The World Bank.
  31. Barry Eichengreen & Donghyun Park & Kwanho Shin, 2011. "When Fast Growing Economies Slow Down: International Evidence and Implications for China," NBER Working Papers 16919, National Bureau of Economic Research, Inc.
  32. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
  33. repec:hhs:iuiwop:430 is not listed on IDEAS
  34. Raphael Kaplinsky & Mike Morris, 2009. "Chinese FDI in Sub-Saharan Africa: Engaging with Large Dragons," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(4), pages 551-569, September.
  35. John T Cuddington & Daniel Jerrett, 2008. "Super Cycles in Real Metals Prices?," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 541-565, December.
  36. Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
  37. Bailey Klinger, 2009. "Is South–South Trade A Testing Ground For Structural Transformation?," UNCTAD Blue Series Papers 40, United Nations Conference on Trade and Development.
  38. Paul Krugman, 1986. "Strategic Trade Policy and the New International Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610450, December.
  39. Daron Acemoglu, 2002. "Why Not a Political Coase Theorem? Social Conflict, Commitment and Politics," NBER Working Papers 9377, National Bureau of Economic Research, Inc.
  40. Angus Deaton, 1999. "Commodity Prices and Growth in Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 23-40, Summer.
  41. Arbache, Jorge Saba & Page, John, 2007. "Patterns of long term growth in Sub-Saharan Africa," Policy Research Working Paper Series 4398, The World Bank.
  42. Kaplinsky, Raphael & Morris, Mike, 2008. "Do the Asian Drivers Undermine Export-oriented Industrialization in SSA," World Development, Elsevier, vol. 36(2), pages 254-273, February.
  43. Breisinger, Clemens & Thurlow, James, 2008. "Asian-driven resource booms in Africa: Rethinking the impacts on development," IFPRI discussion papers 747, International Food Policy Research Institute (IFPRI).
  44. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090,
  45. David Hummels & Georg Schaur, 2012. "Time as a Trade Barrier," NBER Working Papers 17758, National Bureau of Economic Research, Inc.
  46. Montfort Mlachila & Misa Takebe, 2011. "FDI from BRICs to LICs; Emerging Growth Driver?," IMF Working Papers 11/178, International Monetary Fund.
  47. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
  48. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 499-518, July.
  49. Justin Lin & Ha-Joon Chang, 2009. "Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate Between Justin Lin and Ha-Joon Chang," Development Policy Review, Overseas Development Institute, vol. 27(5), pages 483-502, 09.
  50. repec:idb:wpaper:310 is not listed on IDEAS
  51. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
  52. Paulo A Medas & Daria V Zakharova, 2009. "A Primeron Fiscal Analysis in Oil-Producing Countries," IMF Working Papers 09/56, International Monetary Fund.
  53. Cavalcanti, V. & Mohaddes, K. & Raissi, M., 2011. "Commodity Price Volatility and the Sources of Growth," Cambridge Working Papers in Economics 1112, Faculty of Economics, University of Cambridge.
  54. Maizels, Alfred, 1984. "A conceptual framework for analysis of primary commodity markets," World Development, Elsevier, vol. 12(1), pages 25-41, January.
  55. Bleaney, Michael & Greenaway, David, 2001. "The impact of terms of trade and real exchange rate volatility on investment and growth in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 65(2), pages 491-500, August.
  56. Jean-Louis COMBES & Patrick GUILLAUMONT, 2000. "Commodity Price Volatility, Vulnerability and Development," Working Papers 200015, CERDI.
  57. Maizels, Alfred, 1994. "The continuing commodity crisis of developing countries," World Development, Elsevier, vol. 22(11), pages 1685-1695, November.
  58. Paivi Lujala, 2010. "The spoils of nature: Armed civil conflict and rebel access to natural resources," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(1), pages 15-28, January.
  59. Michael Gavin & Roberto Perotti, 1997. "Fiscal Policy in Latin America," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 11-72 National Bureau of Economic Research, Inc.
  60. César Calderón & Luis Servén, 2010. "Infrastructure and Economic Development in Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(suppl_1), pages 13-87.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2012-39. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valérie Mignon)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.