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Trade of China and India with Africa after the 2008 Financial Crisis

The paper analyses the trade competition between China and India in Africa over the period from 2008 to 2017. After the 2008 financial crisis, China increased its advantage over India in exports of goods to rich African countries and in imports of goods from resource-abundant Africa’s least developed countries. China-Africa and India-Africa trade relations are win-win relations. However, African countries are becoming more and more dependent on the condition of the Chinese economy. Compared to Chinese exports, Indian ones destroy fewer African markets.

Trade of China and India with Africa after the 2008
 

Since the beginning of the 21st century, China and India have been intensively developing their trade relations with African countries. Both China-Africa and India-Africa trade relations are win-win relations. However, Sino-Africa trade relations have recently become win-lose relations in favor of China. For China, Africa has steadily become more of an export than an import market. Besides, the expansion of Chinese goods causes the displacement of African products from local markets. Moreover, China has substantially increased its importance as a source of imports for African countries. Several countries in Africa are dependent to China on trade. In contrast to China, India recorded a negative trade balance in merchandise trade with Africa in the years 2008-2017. Compared to Chinese exports, Indian ones destroy fewer African markets. India exports to Africa not only final goods but also components of production. China always dominated over India in merchandise trade with Africa. However, after the 2008 financial crisis, it managed to increase its advantage over India in exports of goods to rich African countries and in imports of goods from resource-abundant Africa’s least developed countries. The aim of the paper is to show the trade competition between China and India in Africa over the period from 2008 to 2017. The analysis is based on the data retrieved from the UN Comtrade Database.

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