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Standard Bank sees Africa gains in China-US rivalry

Standard Bank sees Africa gains in China-US rivalry
By Gift Chanda
Wed 16 Mar. 2011, 04:00 CAT

AFRICA stands to benefit from increasing rivalry between China and US to become the continent’s leading trading partner, according to Standard Bank.

In its latest economic strategy report titled “China and the US in Africa: Measuring Washington’s response to Beijing’s Commercial Advance”, the bank stated that competition between the two economic giants presents Africa with better strategic choices.

The report however cautions African governments against using “out-dated models that place ideology ahead of commerce” when engaging the world’s two economic giants, and suggests that Africa strives for balance rather than choosing between the two.

The authors of the research - Simon Freemantle and Jeremy Stevens - note that the tussle between the world’s two largest economies had elevated Africa to a new position of influence and as much-sought-after market.

The duo argues that while China’s rise might have overtaken the US in Africa, there are merits in engaging with both countries, and that Africa should rather capitalise on the frictions between the two countries.

“Africa must ensure reciprocity,” read the report. “The relative (and varied) merits of engaging with both must be measured and capitalised on.”

They note that China’s rise as a new global pole of influence should be seen as supplementing rather than replacing the role of the continent’s traditional trading partners, such as the US.

“African states must engineer a new foreign policy based on this understanding, balancing rather than selecting between the US and China,” they stated.

The researchers note that while China’s rise has been sufficiently swift to eclipse the US in Africa, “African states must remain acutely aware of the separate benefits to be gained from seeking deeper alliances with the world’s most powerful economy”.

“It is an oddity of economic commentary that the importance and size of the US economy is downplayed. The US economy is nearly three times the size of China’s…It should be no surprise that the world’s largest consumer is also Africa’s largest export destination,” stated the report.

Labels: CHINA, STANDARD BANK LONDON

posted by MrK @ 4:18 PM