The impact of China, the EU and the US on Africa’s economic growth through trade linkages.
Abstract: China, the EU and the US are the top 3 destinations for exports from Africa. The implication for this relationship is that economic growth in these economic giants will have an effect on the aggregate demand of African economies through trade. Additionally, the emergence of China as an economic power has enabled it to increase its influence on the global stage on various fronts. African countries appear to be among the major beneficiaries of the industrialisation and growth of the Chinese economy as trade between China and Africa has increased significantly during the past years. This has enabled Africa to decrease its dependence on the EU and the US as its traditional markets for its exports a factor which could have enabled the impressive economic during the great recession while many other countries were paying a high price. To investigate how Africa’s key trade partners affect its growth, an autoregressive model is estimated using fixed effects annul panel data for the period 2000-2012 based on 35 Sub-Saharan Africa countries. The model is estimated by Generalized Methods of Moments. The estimated results reveal that the EU has the biggest impact on Africa’s economic growth in absolute terms followed by the US and China respectively. The data also fails to support the hypothesis that Africa impressive economic performance during the recent crisis is credited to improved trade ties with China over the years.
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