The China shock comes to Africa

The China shock has arrived in Africa, and America’s economic relationship with the world’s fastest-growing continent is at stake.

America’s own China shock is well documented. Beijing’s entry into the World Trade Organization in 2001 lowered economic barriers. This unleashed a wave of cheap manufactured exports that hollowed out American factory towns and led multiple administrations to impose escalating tariffs on Chinese goods.

The aftershock is now spreading. The same dumping dynamic — Chinese goods exported at below production costs — that shook America’s industrial Midwest, is hitting home in Europe, Latin America, Southeast Asia, and above all, Africa. Chinese import penetration there is rising faster than anywhere else on earth. Across the continent’s major markets — Egypt, Kenya, Nigeria, South Africa — Chinese goods are capturing market share in textiles, steel, autos, machinery, and electronics, and the effect is evident. Manufacturing’s share of GDP across much of Sub-Saharan Africa has stagnated at under 13 percent as Chinese import shares climb.

In contrast to what happened in the United States, where Chinese goods caused labor market shocks in specific geographies, subsidized Chinese exports are killing African manufacturing in the crib. Local industries are being denied the opportunity to scale up and provide the middle-class job opportunities the population needs, and the timing could hardly be worse. By 2040, Africa’s working-age population is projected to exceed that of India and China combined, and finding opportunities for those workers will be Africa’s primary........

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