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ChinAfrica: How can the Sino-African cooperation be beneficial for Africa ?

Marchiori Luca

No 2007014, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: In this paper, different scenarios of increased cooperation between China and African countries are simulated. Recent intensification of political and economic ties between China and Sub-Saharan Afreican countries may give hope that an economic improvement in Sub-Saharan Africa (SSA) is possible. Three channels may lead to a catching-up for Africa with China : a reduction in Africa’s investment risk, an increase in its total factor productivity (TFP) and an improvement of its worker skills. A computable general equilibrium model of the world economy is used, that shares the world in 10 regions, among which Sub-Saharan Africa and China. Three scenarios are considered in which, by 2100, Africa will have reduced simultaneously its gaps in investment risk, TFP and eduction to China by either 20% (scenario 1), 40% (scenario2) or 60% (scenario3). The effects on the Sub-Saharan African economy are very promising. The results show that, already in 2050, Africa will have increased its per capita Gross Domestic Product (GDP) by 50% with scenario1, 80% with scenario 2 and by 125% with scenario 3.

Keywords: OLG-CGE Model; Catching-up; sSmulations; Africa; China (search for similar items in EconPapers)
JEL-codes: E27 J11 O47 O55 O57 (search for similar items in EconPapers)
Pages: 34
Date: 2007-04-01
New Economics Papers: this item is included in nep-afr, nep-cmp, nep-cna, nep-dev and nep-mac
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