China investment in africa (1)

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Chinese Investment in Africa: Opportunities and Challenges William So July, 2011 [email_address]

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This paper grapples with this question and concludes that war between the two can break out even tonight if certain conditions are met. However, for now, with China’s military not advanced enough, any war would have to be started by the US. And it so happens that the US actually has enough motives to engage China before it fully modernizes but cannot just do so from the blue. The US is thus trying to force China to give it the reason to justify a war to its increasingly war skeptical allies and domestic publics. The reasons why the two cannot fight for now range from interdependence, the fact that Taiwan has not declared independence yet and the fact that Sino-Japan relations do not boil beyond the Yasukuni rhetoric. It is also due to the fact that China is powerless and relies on the US for many things such as access to lucrative markets and technology. The characters and personalities of the leaders of the two countries are also partly the reason there is not enough bad-blood to sound the war cry yet.

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Regional Economic Integration (REI) refers to the commercial policy of discriminatively reducing or eliminating trade barriers only between the states joining together. Regional economic groups eliminate or reduce trade tariffs (and other trade barriers) among the Partner States while maintaining tariffs or barriers for the rest of the world (non-member countries). Geographical proximity, cultural, historical, and ideological similarities, competitive or complementary economic linkages, and a common language among the Partner States are importantly required for effective economic integration. Regional economic integration in Africa traces back to 1910 with the formation of Southern African Customs Union (SACU) by the countries of Botswana, Lesotho, Namibia, Swaziland and South Africa. Other main economic arrangements include East African Community (EAC), Southern African Development Community (SADC), the Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), the Common Market for Eastern and Southern Africa (COMESA), Arab Maghreb Union (AMU) etc. Also there is the planned African Economic Community, whose treaty was signed in 1991 (the Abuja Treaty) and it is expected by 2025. All these efforts are aimed at unifying Africa, but, there has been limited success due to the various problems which the region is facing including the internal civil wars. Regional economic integration in Africa has not been so effective and it faces some challenges including overlapping memberships due to the multiplicity of its economic communities. The similarity and smallness of the African countries together with the competition between each other in the global market for the same products are some of the reasons responsible for the past lack of success in the economic integration in the continent. Several attempts of regional economic integration in Africa have been put into place over time, however they have been ineffective in promoting trade and attracting Foreign Direct Investment (FDI) in the continent. Relatively high external trade barriers and low resource complementarity between Partner States limit internal and external regional trade. Small market size, poor transport facilities and high trading costs make it difficult for African countries to reap the potential benefits of economic integration.

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