India Chian Africa Internation Relation

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International Relation of Arica with India and China
2012

Mentor:

TERM PAPER
International Business (SML 822)

Introduction
China and India are often described as the next engines of world economic growth. The amplified presence of the two countries on the African continent is now widely noticed, and although India’s presence might have been less popularly exposed than China’s, it is nonetheless of substantial and increasing importance. Popular and academic accounts of this phenomenon range from viewing it as a new scramble for Africa to seeing it as a relationship that is beneficial to all parties.. Chinese and Indian presence on the African continent constitutes a response to the current general fluidity in the international political landscape, and offers less support for the view of a new scramble for Africa. In the context of the current features of the global economy, what Africa needs is African agency. The Chinese and Indian stakeholders are, in contrast to the notion of “scrambling”, playing according to the rules of the global economy. We will therefore argue that African stakeholders at all levels need to embrace the situation and advance Africa’s governance and international relations’ interests. If only to bear in mind that in global politics and economics there are no permanent friends, only permanent interests. Africa’s Traditional Trade Partners

Over the last decade, Africa's trade volume with traditional partners doubled in nominal value, as shown in Figure 6.4. Africa’s overall trade volume has more than doubled however which explains why the share of traditional partners decreased. Africa’s trade with traditional partners remains crucial, however, at close to 62% according to Figure 6.4. The European Union still represents more than 40% of Africa’s trade – the equivalent of USD 256 billion – and almost three times that of China. As African countries strive to make the most of growing relations with the new economic forces, they need to be aware that their older partners remain a very solid and growing base.  The downward trend of curves in Figure 6.4 in the year 2009 should not be misunderstood. Africa’s trade is not structurally declining – on the contrary: the dip in 2009 reflects the onslaught of the financial crisis. Preliminary data for 2010 suggest that Africa’s trade has picked up for the old and new economic forces. Trade for the traditional partners is only decreasing in importance in relative terms and because of Africa’s very fast growth of trade with emerging partners. In terms of foreign direct investment (FDI), the continued dominance of traditional partners is striking. OECD countries – including traditional partners – still account for about 80% of FDI flows to Africa. However, the share of non-OECD countries – including Brazil, India and China – has risen from an average of 18% in 1995-99 to 21% for 2000-08. Europe and the United States still dominate FDI to African countries. African Trade with India and China

The relationship between China and India is complex. Throughout history it has encompassed collaboration and extensive trade as well as hostility and border disputes. Their economic growth and current strength were built on different industrial strands: the state-engineered Chinese development process focused on manufacturing and on foreign trade while India’s economic reform was driven largely by the private sector The two emerging powers have recently turned to engage with Africa, and the volume of trade between the two countries and Africa has witnessed an exponential increase over the last decade, with the value of trade between China and Africa increasing by an average 24 per cent between 1995 and 2007. Total trade now stands at approximately US$ 160 billion in 2011 Bilateral trade between India and Africa rose from $967 million to $9.14 billion between 1991 and 2005 and over the period 1997-2005, exports from Africa to India doubled. Total trade...
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