Taking a Look at the China-Africa Relation

1563 Words Feb 25th, 2018 6 Pages
From these conflicting views emerge theories on the effect of aid, investment and trade on economic growth––which, in current literature, suggests an ambiguous result.
On the issue of aid, Pronk (2001) pointed out that aid can be seen as a catalyst rather than a primer mover, in the sense that aid is not a cause of development but a push or support to development. In the China-Africa relation, the role of aid has been to allow recipient countries to level their investment above domestic savings. Accordingly, Cheney and MacEwan (1966) assess that the function of aid is to enable the economy to expand through its ability to invest. In other words, aid serves as a catalyst. Griffin (1970) cautioned aid ability to act as a catalyst, contending that due to its negative effect, it retards economic growth instead of driving it. For Griffin (1970), aid is an impediment, not a catalyst. Furthermore, Boyce (2002) argued that, to describe aid as a catalyst for development, a sound analysis is essential to measure its negative and positive effect on the economy.
In case of Africa, China’s aid mostly targets infrastructure investment in transportation, agricultural, health and education, with positive externalities. For instance, an investment in transportation infrastructure reduces transportation costs, which results in economic efficiency, reducing trade cost. Aid received by African…

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