Mozambique is the African country that can gain most from restructuring of the Chinese economy

18 July 2016

The increase of domestic consumption in China’s economic structure could provide greater economic growth for sub-Saharan African countries that export what they produce, says a new study sponsored by the World Bank.

The study “China’s Slowdown and Rebalancing: potential growth and poverty impacts on Sub-Saharan Africa,” by economists Csilla Lakatos, Maryla Maliszewska, Osorio-Rodarte Israel and Delfi Go, said that Mozambique is very well positioned to benefit from this structural change in China’s economy.

The three economists also say that “rebalancing in China” with domestic consumption gaining weight in relation to investment, “should have more significant impacts on the rest of the world than the anticipated slowdown” in the short term.

“If global supply responds positively to the shifts in relative prices and the new sources of consumer demand from China, a substantial rebalancing in China could have an overall favorable impact on the global economy,” they added, in the study to which Macauhub had access.

In the case of Mozambique, the annual growth forecasts for per capita GDP between 2011 and 2030 fall back from 6.48% to 6.46% due to the slowdown in China, but rise to 6.58% in a rebalancing scenario.

This is the best forecast for the region from economists, ahead of Ivory Coast (6.35%) and Botswana (5.62%), although Angola and other Portuguese-speaking countries were not included in the analysis.

According to data presented by the economists, 99.5% of Mozambican exports to China between 2004 and 2014 were intermediate goods, and only 0.2% were end products, a reality similar to that of most countries in the region.

In a seminar on Anhui – Mozambique Production Capacity Cooperation Promotion held at the end of June in Maputo, Chinese Ambassador Su Jian said China is available to help increase the productive capacity of the country, particularly in the construction and improvement of infrastructure as well as technology transfer and training of technicians and Mozambican workers.

In the study sponsored by the World Bank, economists point out that “Policies that encourage diversification while at the same time supporting countries in their comparative advantages could be beneficial in tackling the negative impacts of China’s slowdown.” (macauhub/CN/MZ)