If you listen long and hard to western media especially the talking heads on BBC, you would think the global economic system is on the verge of imploding under the burden of China’s current economic problems. But don’t listen to these pundits. The Chinese stock market is going through normal market contractions and volatility.
The turbulent Chinese stock market has dealt Chinese citizens a bad hand. Indeed, many have seen their life-savings go up in flames. Confidence in the Chinese economy is at all-time low and speculations are rife that bad times are still ahead for the world’s second largest economy. But these fears are largely misplaced. The Chinese government is known for its pragmatism and would therefore not sit idly by as the national economy takes a tumble.
Remember in 2008 when other huge economies were crumbling after the collapse of the housing market in the United States? The Chinese government poured billions of dollars into the economy which went on to perform remarkably with a growth rate of 7 percent. Enviable if you ask me.
These days, Africa is closely identified with China for one obvious reason; trade. It therefore goes without saying that Africa feels the pain when the Chinese economy performs poorly. Look, our national economies are tied to China’s economy. We are in fact interdependent. China needs our raw materials and we need China’s investments and money.
So as it goes, China has become our largest trading partner eclipsing our traditional partners, Western Europe and the USA. As recently as 2013, China’s trade with Africa was a staggering 200 billion dollars compared to Europe’s 137 billion and America’s 87 billion. Africa’s recent prosperity, its annual growth rate of 5per cent and its expanding middle class are the direct results of its trading relations with the Asian giant. It may be that China’s economy was long due for a reality check.