My readers have been asking me for a long time that why I write so extensively about a Chinese economy. Well the true answer is yet to be found within my minds all I can say that I have fallen love with their economic investments policies. China pulled out the Asian economy and BRIC economy from the recession of 2008 through its extensive monetary policies.
China has been extensively investing across the world in various economic projects for its growth of its foreign reserves as well as a strategy to diversify the foreign reserves. Chinese polices have always been a win-win proposal for the every economy, where it went for extensive deals.
According to the Statistics I find that Chinese investment in Africa reached $40 billion by the end of 2010, of which $13 billion came as direct investment. Apart from this the contracts of China with Africa has been around $218.9 billion, with a turnover of $132.5 billion. The investment in Africa has lead to employment creation for the economy which has lead to increase in revenue of the African economy. According to statistics, the ratio of African employees to their Chinese counterparts in Chinese companies' projects in Africa has hit 13:1.
Further the trade deals have also increased between the two nations. In 2012, exports from South Africa to China amounted to R89bn ($9.6bn) – predominantly raw materials – while imports from China into South Africa totalled R112bn. Annual trade between Africa and China has doubled since 2007 to more than $200 billion (R1.85 trillion) and Chinese investment stands at $20bn, according to Standard Bank.
China has become an opportunist since Europe is giving less focus on investments to other nations. Another factor which helps china is the huge forex reserves which it holds compared to any other nation on this earth. This has given a milestone advantage for Chinese investments.
But above all these rationales behind investment the real growth of investments turns out to be economic investment without political engagement. This has been biggest boon for every investments of china into African economy. Well readers of India can easily envisage the investment scenario hurdles in India. I am sure that everyone will say that if we in India get any investment opportunity without any political interface then Indian economy would surpass the growth of china over the next 5 years. Well this will remain a distant dream.
China has decided in 2012 that pledge to provide $20 billion in loans over three years for African infrastructure development, agriculture and businesses. The investments are being directed towards making major inroads into Africa, where there is a complete lack of rail networks, highways, airports, factories, power plants and oil refineries has slowed the continent's economic development.
Many of my friends would be claiming that in between all these investments china is planning or rather building the way for its own mineral resources supply form the lands of Africa.
Well this would be an excruciating remark on china. In India we are asking FDI and Private investments to build our roads and infrastructure in same way china is doing aggressive investments in Africa. Today we are discussing about Africa, did we ever thought about this economy in the last several decades.
Well there is no free lunch anywhere on this earth. Today the African society and young generation is trying hard to shrug off the painful miseries of their lives and at that moment we are raising our voices that china is exploiting Africa. Even if china exploits Africa still at the cost of exploitation African economy and its infrastructure will grow.
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