Dr Keyu Jin; China role in Africa and the World Economy.
China’s growth has been driven by increases in productivity, not by investment nor by cheap labor. There is still plenty of room for growth in China, and strong growth potential but there are many challenges in realizing the potential. Is China’s Growth over? What is China impact on Africa as China is Africa’s largest trading partner.
The Mauritius Institute of Directors (MIoD) gathered its members for the Annual Members Meeting where the event also caters for an international speaker Dr Keyu Jin, professor in London School of Economics who livened a conference on “China role in Africa and the World Economy”.
Dr Keyu main message was that China’s growth has been driven by increases in productivity, not by investment nor by cheap labour. There is still plenty of room for growth in China, and strong growth potential but there are many challenges in realising the potential.
Between 1978-2007, 8.12% GDP per capita growth, from which – 77% derived from productivity growth – 0.51% from capital deepening – 15% from human capital – 7% from labor participation
The sources of productivity growth after 1978 were mainly, policy and institutional reforms and structural transformations – from agriculture to manufacturing and services – from state sector to non-state sector.
In 1978, China’s productivity was only 3% level of U.S. After three decades of rapid growth, productivity still only at 13%. Even with the same relative growth for another 2 decades, productivity will be at 40% of U.S. level– Comparing to: Japan’s TFP was at 83% of U.S. level by 1975, Korea 63% by 1990, Taiwan 80% by 1990.
There is room for catching which will come from, removing distortions and inefficiencies in its production, adopting and learning best practices and frontier technologies from developed economies, reduce state monopoly in key industries and services, reduce barriers to labour mobility.
But is economic reform possible without political reform or the establishment of the rule of law? Many challenges still ahead to reduce political resistance to economic reform and to reduce favoritism to key interest groups.
Moreover the speaker also highlighted China’s Impact on Africa. China is Africa’s largest trading partner, but 6 countries account for 60% of exports – South Africa (21%), Egypt (12%), Nigeria (10%), Algeria (7%), and Benin (5%) and in terms of imports 70% comes from Angola (34%), South Africa (20%), Sudan (11%) and Congo DRC (8%).
Finally, why China needs Africa; China needs resources (crude oil), natural resources oils gas, aluminum copper and iron ore for expanding industrial base. Moreover China needs Africa for the potential market of its Chinese products.
During the event the MIoD presented its Annual Integrated Report 2015, which is in line with the guidelines of the GRI G4 (the most recent version of Global Reporting Initiative).
GRI, created in the United States in 1997, is recognized as an international standard to allow companies to measure better and so to manage their impact regarding sustainable development.
For 3 years the MIoD followed the directives of the GRI under the version of GRI 3.1, and passing from now on to the version GRI G4.
“The MIoD makes a commitment to show transparency by presenting an analysis of its strategy, performance and activities to its members and other stakeholders. By using the directives of the GRI G4, we are capable of making a clear and transparent summary on the social, economic and environmental impact of our activities. We do not only wish to be a model of good governance, but also a leader in the promotion of sustainability in a company and in the adoption of the GRI reporting in Mauritius, ” explains Jane Valls, CEO of the Mauritius Institute of Directors.